Amazon.Com Business Model

Amazon.com operates in the Online Retail Industry. The sector is one of the fastest growing globally and is outperforming the ordinary retail marketplace. It was created after 1995 and it was only the Internet that made it possible for such an industry not only to be established but to become one of the most flourishing sectors in the business environment. What is interesting is that Amazon.com, together with eBay is the pioneer in the field. Both companies were launched in 1995 and are still extremely successful. The creation of e-mail in 1996 had a huge impact on the development of online retail by introducing a fast and easy way to communicate with customers. For this two-year period Internet usage

Amazon understood firsthand that the competitive advantage of a company originates immediately from how distinctive the organization's resources and competencies are. Amazon is able to both engage in production at a lower cost and generate a superior product at a standard cost. This is accomplished mostly via Amazon's strategy of having a wide variety of goods and competitive pricing. Customers know they can find basic products at slashed prices or high quality goods at standard prices and this is all achieved via the enormous range of products and product brands and types available on their massive marketplace. For example, the depiction displayed in the case study which shows how growth was related directly to: lower cost structure- lower prices customer experience traffic sellers -selection and convenience. While this is a grave oversimplification of the Amazon business model, it demonstrates how many aspects of the strategy reinforced one another.

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.

Amazon and Ebay are two well-known brands of online shopping sites. They have evolved and grown from small firms to the giants of e-commerce today. In this essay, a comparison would be made between the two firms.

As of January 2010, Amazon.com has three times the Internet sales revenue of the runner up, Staples. By offering a large amount of varied categories through its website and other international ones (Amazon.co.uk, Amazon.co.fr, and so on), it has managed to grow to a customer based company with over 30 million people. In addition, the online retail format enables the company to reduce costs of managing inventory (Amazon.com; online bookstore, 2008).

Both Amazon and Walmart are seeking to accomplish the same goal, to become the world’s largest retailer by providing customers with a seamless shopping experience. Both companies have their own strengths, with Amazon being the leader in the online retail space, while Walmart is the clear leader in the brick-and-mortar arena. As more online and brick-and-mortar retailers are eating into the market, both Amazon and Walmart must content with other companies as well as each other. Amazon and Walmart were both created and detonated extraordinary growth due to an innovative push unlike any other in their own respective arenas. “If either Amazon or Walmart is destined to come out on top, it must come from a massive innovation push, a willingness to

Amazon’s fulfillment centers are valuable, rare, costly to imitate, and organized to captured value. Thus, they attribute to Amazon’s competitive advantage. Amazon Prime and 1-Click are also valuable to the organization. However, they can be replicated. Walmart launched a membership program to compete with Amazon’s Prime Service. With Walmart’s membership program customers receive free two-day shipping when they spend $35 or more on orders. Amazon Web Services is valuable, rare, costly to imitate and the organization has capture the value of it. Therefore, AWS has contributed to Amazon’s sustainable advantage. Amazon’s brand name and reputation have also given the company sustainable advantage. Amazon acquired enormous brand valuation in a short period of time. It is

Amazon.com Inc. was initiated by Jeff Bezos in 1994 after realizing the rapid rate at which the internet and websites were growing in popularity among business organizations and individuals. In 1995, the company started operating its website for selling books, videos, compact discs, computer software and computer hardware before being incorporated in1996 as an e-commerce company (Reuters, 2015). Apparently, the company offers may products and services for sale; these products include merchandise for resale products offered by third parties. In this regard the

One of the companies that exploits opportunities and business ventures to create growth and sustainability is Amazon, Inc. Amazon was founded in 1994 and since then it has opted to take its business online and thus develop a global strategy that has paid off and turned the company into a technological business hub that serves consumers by offering an assortment of products and services in a noteworthy customer service. These strategies have made Amazon one of the leading online retailers with a revenue of US$ 88.988 billion as of 2014. This paper thus seeks to describe Amazon’s grand strategies of product development, market development, and concentration as part of its long-term growth strategy.

Amazon is the world’s largest online retailer that was launched in 1995 (Rouse, 2014). Amazon was mainly a book selling company that has enlarged its’ business by selling a variety of goods. The company sells all types of technology devices such as cell phones, games, televisions, movies, cameras, computers,

This sort of global expansion adds great complexity to the functionality of Amazon’s management, personnel, operation systems, technical performance, financial resources, and internal financial control and reporting functions. With the perplexity of current situations, Amazon may not be able to sustain growth effectively, which ultimately could bring damage to their reputation and limit their operating growth as well. .

Amazon’s core competencies are in its ability to effectively use and develop technology to drive site traffic and enhance the customer experience. Their distinctive use of website real estate coupled with their ability to leverage their brand and effectively use that leverage to deliver low prices and high quality products, makes them a leader in online retailing. Their partner brands and their ability to adapt and recognize deficiencies enable them to effectively cut out the middle man, or at the very least, partner with them.

Retailers have adapted to the online marketplace out of necessity and opportunity. The great recession placed many retail companies in financial hardship and while some failed, others innovated and became some of the largest companies in America such as Amazon. A recent trend is consumers are buying more products online than ever before. As a consumer, I enjoy shopping in the convenience of my home and having the items delivered to my doorstep in 48 hours or less. Global internet access continues to increase, with mobile devices and affordable internet for the home, consumers will continue to shift and buy products online rather than in retail brick and mortar locations. Online sales in the United States have increased over 250% in the last ten years, accomplishing $250.0 billion in 2012 (Tehrani, 2014). Therefore, Amazon is in a solid market position to capitalize on the future trends and booming ecommerce

In 2000, Amazon and Toys-R-Us entered into a symbiotic agreement that would benefit both corporate entities. Both companies had recently had unimpressive fiscal years due to differing issues. Toys “R” Us struggled with poor order fulfillment. Although they were equipped with enough merchandise, other issues kept them from being able to get orders to customers in a timely manner; especially during the busy holiday season. Conversely, Amazon was forced to write off $34 million because of a miscalculation in inventory and had orders that could not be honored (Ouchi, 2004). Following these debacles, both organizations felt that joining

The reaction to Amazon’s marketplace initiative in the financial markets had been generally positive. Indeed, Amazon’s stock was up 52% for the year (as of mid-September 2002) versus a 35% drop in the NASDAQ index. Still, doubts clearly remained in some observers’ minds. For example, Holly Becker, an equity analyst at Lehman Brothers, had reservations about Amazon’s model. In a report issued in February 2002 she said, in part: The used business appears to be an excellent complement to Amazon’s core retail offering. The used business allows Amazon to participate in a growing market that leverages all of the inherent benefits of the Internet . . . a truly virtual model, used eliminates a large portion of fulfillment costs and inventory risk, and therefore provides higher margins . . . but . . . we believe used is detrimental to Amazon’s franchise in the long term. The company’s point of difference, market share, and service capabilities are far greater in new products than used . . . we believe cannibalization is likely in the longer term.1 While the company had made dramatic strides in expanding the range of products it offered, there were still many categories in which it participated little or not at all. Thus, a key element of enhancing selection was to constantly expand the range of