• The impact of progressive technology advance and globalization to the firm’/industry’s market share in the United States and global market.
Data, efficiency, and customer service—these are Amazon.com's competitive differentiators. As progressive technology advance, it enhances Amazon market and allows Amazon to be lauded for its recommendations engine, and subsequently, contextual purchasing capabilities, and of course the shopping experiences. All these factors are crucial to keep their customers coming back for more. A new research from Forrester indicates shows that 30 percent of consumers now begin their buying process researching on Amazon as opposed to Google, indicating Amazon's authority as an all-in-one solution is only
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The company also records data on customer buyer behavior, which enables them to offer or recommend to an individual specific item, or bundles of items based upon preferences demonstrated through purchases or items visited.
Another growth area for Amazon.com brought by technology was the success of its "Associate' program. Established in July 1996, the program allowed individuals with their own web sites to choose books of interest and place ads for them on their own sites, allowing visitors to purchase those books. The customer was linked to Amazon.com, which took care of all the orders. Associates were sent reports on their sales and made a 3 to 8 percent commission from books sold on their sites. The Associates program really began to take off in mid-1997, when Amazon.com formed partnerships with Yahoo, Inc. and America Online, Inc. Both companies agreed to give Amazon.com broad promotional capabilities on their sites, two of the most visited sites on the Web. As the success continued, Amazon also struck deals with many other popular sites, including Netscape, GeoCities, Excite, and AltaVista.
Besides, Amazon, not surprisingly, is keen to sharpen its competitive edge, to use every means at its disposal to confound, stymie and overpower its rivals. It is well positioned to do so: the introduction of the Amazon Kindle in 2007 led to a startling surge in e-book sales, which until then had been insignificant. With the
Amazon.com was founded as an online bookstore in July, 1995 and went public in May 1997. In June, 1998 Amazon.com launched its music store. Since then Amazon.com has become the most prominent Internet retailer. Over time Amazon.com has added several products including electronics, health and beauty products, house wares, kitchenware’s, music, tools, toys, videos, and several services such as auctions, 1-Click ordering, and zShops. Amazon.com has expanded nationally and internationally and now operates several customer service and distribution centers in the United States and international web sites that
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.
Three building blocks complement this: Amazon’s feedback system, recommendation system and its buy/sell system. Its recommendation system accounts for 35% of Amazon’s sales as customers are more inclined to buy a product based on the strength of the reviews of other customers. It also brought repeated purchasers that account for 66% of sales. (Salehnejad, 2012)
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).
Amazon focuses on global reach, putting customer first,, and extensive selection of products through its vision which is “To be Earth’s most customer-centric company, where customers can find and discover anything they might want to buy online” (Gregory 2016).
Many consumers go for what appears to be cheapest and most convenient. The reality is, Amazon’s increasing dominance comes with high costs. “These consequences have gone largely unnoticed thanks to Amazon’s remarkable invisibility and the way its tentacles have quietly extended their reach” (LaVecchia, 2016). It is vital that consumers are aware of this superpower that is taking over.
adding to its monopoly. Many authors are discouraged by this due to the fact that
Amazon stated its marketing approach in its 2011 annual report as “we direct customers to our websites primarily through a number of targeted online marketing channels, such as our associated program, sponsored search, portal advertising, email marketing campaigns, and other initiatives.”(Petro, 2017). Being the leader of the ecommerce industry, Amazon maintains that
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
The company has many strengths. First, Amazon is the world’s leading online retailer. According to the 2016 Annual Report, Amazon had total net sales of US $135, 987 million in 2016. These total net sales include three segments which are North America, International, and AWS. Second, in comparison to many companies, Amazon has a superior logistics and distribution system, which allows the company to actualize improved customer fulfillment. Third, with its prolonged strategic drive on low-cost, differentiation, and focus, Amazon offers a wide range of product at low prices to customers. Fourth, Amazon enjoys global recognition from its customers. As stated earlier, Amazon built a strong brand in very little time. Finally, the
Amazon is a company that sells many open product categories online by allowing customers to take the time to search and shop through the product offerings. Many product categories that are offered on Amazon may include device accessories, kindle devices, beauty, books, electronics, health & personal care, etc. The foremost product category that can offer the greatest advantage compared with a retail store chain is most definitely the books category. Reason to this is that the company has expanded the customer’s online shopping experience by offering such a wide range of physical and electronic books, depending on the preference of the customers. They are able to search for the top-rated selling
Amazon is a relatively small player in the bookstore industry, and its main competitors are Barnes & Noble and Borders. Despite the difference in scale, the company shows great promise, because its business model overcomes many of the competitors’ drawbacks.
Amazon has grown rapidly since their inception. The company experienced a surge is sales of 313% until 1998, supported by 8.4 million customer accounts in over 150 countries, of
Amazon.com is a Fortune 500 company that has revolutionized the retail industry. In recent years, Amazon has faced increased competition in the highly competitive online retail space as competitors invested heavily in their online storefronts and infrastructure. Positioned in a highly fragmented industry, Amazon must find solutions that can sustain its long term profitability and maintain its market share. To that end, Amazon should grow the Amazon Prime membership base and expand on its media and mobile offerings.