Case Study: a Strategic Analysis of Amazon.Com in 1997 Essay

When amazon was founded in 1996, the company began as a small online book retailer but has since transformed into a retailing giant that is able to compete in a highly competitive market. Although amazon competed predominantly with other e-retailers during the information technology boom that took place in the 90s, with an aggressive business and supply chain management strategy, amazon was propelled among the ranks of other industry leaders. Amazon has created a reputation that is characterized by its innovation, supply chain management strategies, and the use of disruptive technologies.

Amazon operates using a web-based platform to sell books.  The web-based model targets a global market, has reduced overhead costs and a shorter operating cycle as compared to brick and mortar businesses such as Barnes & Noble and Borders. Amazon’s online model has a superior inventory

Amazon’s rapidly changing and evolving innovations based to consumer needs and wants has been the base of their success. The company isn’t afraid to try new ideas but also isn’t afraid to drop and dismiss them if they’re not successful. These kind of reversible decisions are what have made Amazon so well-adjusted in the e- and m-commerce marketplace.

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 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,

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

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.

The purpose of this paper is to provide a managerial analysis of Amazon.com, Inc. and to discuss the key reasons behind their low profitability and whether it will improve in the future. Included in the analysis of Amazon.com, Inc., will be a thorough examination of the firms Vison and Mission statements, Amazons current strategic plans and direction, a look inside at their corporate culture and organizational structure, as well as a detailed SWOT Analysis.

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.

Amazon.com (Amazon), founded in 1995 by Jeffrey Bezos, has grown from an online bookseller to a virtual retail supercenter selling products ranging from books, toys, food, and electronics for which it is best known today (Hill & Jones, 2013, p. C272). At its inception, the goal of Amazon was to become an online bookstore that could offer a wider range of books to millions more customers than a typical brick-and-mortar (B&M) bookstore at lower prices (Hill & Jones, 2013, C272). After 2 years of rapid growth, Bezos took the Company public in order to raise more capital (Hill & Jones, 2013, C273). In addition to its lower prices, Amazon had the benefit of its patented 1-Click ordering system which improved the ease of ordering from its site. Some of the Company’s competitors such as Barnes & Noble and Borders, attempted to compete in the online bookselling industry however, none were successful as Amazon had first-mover advantage (Hill & Jones, 2013). As the Company’s growth began to slow down in the late 1990’s, Bezos expanded Amazon’s product offerings into CDs, cameras, DVD players and other electronic and digital products which created another advantage for the Company. Over the 2000s, many of the weaker company’s in competition with Amazon found online retailing too complex and expensive and consequently formed agreements with Amazon (or eBay) to operate their

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.

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.com was founded in 1994 as an online book retailer. Now, the largest retailer of books has also become the largest online retailer with a customer base of over 30 million people. Amazon competes in a vast array of markets including: books, movies, digital readers, computers, consumer electronics, pet needs, groceries, health and beauty aids, toys, clothing, jewelry, shoes, sporting goods, tools, automotive, hardware, building supply, and more. Despite their large product offering, Amazon has maintained its strong brand.

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, Inc. (Amazon.com), incorporated on May 28, 1996, is an American electronic commerce company with headquarters in Seattle, Washington and is the largest Internet-based retailer in the United States (Ungar, 2014). Amazon.com started as an online bookstore, but soon diversified, selling DVDs, Blu-rays, CDs, video downloads/ streaming, MP3 downloads/streaming, software, video games, electronics, apparel, furniture, food, toys and jewelry (Ungar, 2014). The company also produces consumer electronics—notably, Amazon Kindle e-book readers, Fire tablets, Fire TV and Fire Phone — and is a major provider of cloud computing services (Ungar, 2014).