Amazon is One of the Largest Online Retailers

952 WordsFeb 17, 20184 Pages
Amazon is a multinational electronic commerce enterprise. Company's business originate from online bookstore and soon transferred to diversification retailing..At present, Amazon is one of the world's largest online retailers. Simultaneously it develops and invests in its information systems service and prospective industries like Cloud computing. This part will go to the Introduction. Porter five forces analysis is used as a framework for exploring industry environment and business strategy development. It was formed by Michael E. Porter of Harvard Business School in 1979. Porter’s Five Forces Model is a key technique for making strategic decisions since it allows a business to determine how attractive a specific area is, and therefore maximize allocation and utilization of resources and investments against the opportunities with the greatest potential. It consists of five parts: threat of new entrants to the market, power of suppliers, power of customers, threat of substitutes, and competition in the market. Threat of New Entrants: Due to the high returns, profitable markets will always attract new firms. This results in potential of new entrants, which eventually will decrease profitability for all firms within the industry. Usually, barriers to entry factors consist are shaped by governmental policies, capital requirements, patents, cost disadvantages, independent of size, economies of scale, economies of product differences, product differentiation, switching
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