Amazon Case Study Analysis

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Amazon case study analysis

---- Jiachuang Sun

1. Review of Amazon’s strategy between 2007 and 2009

Strategic analysis

Profiling the business:

➢ Mission: Amazon’s mission is to be Earth’s most customer-centric company, where customers can find and discover anything they might want to buy online, and endeavors to offer its customers the lowest possible price[1].

➢ Product/service analysis: Since the establishment of Amazon, new products has been kept adding into the original book category and Amazon has moved further to provide service. There are three product categories in Amazon, media category, electronic and general merchandise category and other category like
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• Cons:

Sometimes it might too costly to satisfy all the customers’ needs.

➢ Cost leadership strategy

• Pros:

It can be served as a competitive advantage, which attracts more customers shifting from Amazon’s online retailer competitors into buying their products, thus increasing the market share.

The low cost product can also change customers buying behavior. Some customer who prefer to buy goods in the physical stores might decide to buy Amazon’s online product if they see it is in so low a price.

Through selling more in a lower price, Amazon can achieve economies of scale, which in return can increase their bargaining power over its suppliers and partners.

• Cons:

1. If the price is set low and Amazon can not meet the break-even point, then Amazon will undertake the great financial burden and might even lead to bankruptcy.

2. The low cost strategy might mean limited money on overheads. Take the employee wages for example, Amazon’s employee’s basic wages is lower that many of the other companies[3].

➢ Diversification strategy

• Pros:

1. This strategy can provide customer with more choices and attract new customers to Amazon’s online retailing, through which Amazon’s customer base is spreading. Amazon originally only sold books, but now it also sells Kindle, MP3 and so on.

2. Amazon can spread the relative
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