The Marketing Strategy Of Amazon.com, Inc. Essay

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.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

Beyond Amazon’s core markets of electronics and media, Amazon is making a big impact in the retail market. Analyst John Blackledge believes, “Amazon will become the largest retailer of apparel and accessories in the U.S. market next year, passing Macy 's as the leader” (Deagon, 2016, para. 2). Amazon announced that they will be launching their own private label dress shirts for men and expand into dress pants, sports clothing, and sweaters. In addition to that, Amazon has plans to open small retail stores at malls to showcase their electronic devices and hardware devices (Deagon, 2016).

However, Amazon.com made this chain or supply useless. At amazon.com, unlike traditional bookstores, there are no bookshelves to browse. All contact with the costomer is either through its web site or by email. At the firm’s web site, customers can search for a specific book, topic and etc. Customers can browse, fill up a virtual shopping basket, and then complete the sale by

Neil Irwin of The New York Times writes of Amazon: “The online retailer is on a collision course with Walmart to try to be the predominant seller of pretty much everything you buy. Each one is trying to become more like the other — Walmart by investing heavily in technology, Amazon by opening physical bookstores and now buying physical supermarkets.” Something similar, says Irwin, is happening in “nearly every major industry,” benefiting “the biggest and best-run organizations, to the detriment of upstarts and second-fiddle players.”

After visiting the websites of Amazon and Barnes and Noble, it is clear that both companies have done an exceptional job at designing sites that effectively communicate their brand along with specific products they want to sell. Amazon achieves 29 billion in revenue per year generating a profit of 1 billion and producing a whopping ROE of 24%. In contrast to this, Barnes and Noble achieves 6 billion in revenue per year generating a loss of 40 million (last year’s results) and produces an ROE of -4.5%. It is important to note that Amazon sells exclusively from a web-based environment, while Barnes and Noble

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.

Barnes & Noble was the only retailer able to provide a wide selection of books. With the opening of the e-commerce, and the start-up of Amazon.com in 1994-95, Amazon’s revenue and net income from has seen a continuous increase, whereas Barnes & Noble’s revenue and net income over the past 10 years has steadily decreased. The success of Amazon.com and deterioration of Barnes & Noble came from Amazon’s

Amazon.com, Inc. or www.amazon.com has a mission statement to be the most customer-centric or customer-oriented retailer on this planet, where people can browse and buy anything they want to buy online with prices as low as possible on the market. (About Amazon) They are one of the world’s most important online retailers and providers of web service. (Amazon.com Inc.) They offer a large-scale of products such as clothing, merchandises for car and industrial uses, beauty and health products, books, games, electronic devices, grocery, food, jewelry, merchandises for kids and babies, movies, music, toys, sports goods, and etc. (Amazon.com Inc.) They also offer

Amazon managed to go from online bookseller to the largest retailer in the United States. Today, there's almost nothing Amazon doesn't sell. Today, online commerce saves customers money, and precious time, Bezos knows that by personalization it would create real value for its customers and, by doing so; I feel each of the efforts he selected were successful because his hopes to build an enduring franchise worked, even in established and large markets. Bezos has inspired a willingness to continually learn and adjust, which has helped Amazon rise to the top. There were risk factors identified in the report and suggested a long-term strategic solution to help mitigate it. Success doesn't happen overnight. Bezos original 1997 letter to shareholders provides a glimpse into the extraordinary focus the famous founder has maintained through the years, along with some excellent lessons for all who reads it He stresses those to keep moving forward look to the future and look for the long term. He believes that a fundamental measure of success will be the shareholder value we create over the long-term (Quittner, J. 2008). He understands the stronger the market leadership is; the more powerful our economic model

The company I have chosen for the purpose of this case study is Amazon. The reason for this is because Amazon has seemingly taken the retail market by storm since its establishment in 1994. The company originally started off as an online bookstore, but quickly diversified into selling multiple forms of electronic products. Amazon is different than the traditional retail store that rely heavily on their brick and mortar stores. It has developed a business model that relies heavily on internet based marketing and sales. Amazon`s market power has allowed them to be very competitive with its pricing strategy. This has helped increased their market shares to point that has surpassed brick and mortar stores like Wal-Mart. Amazon continues to change the market by offer customers two-day shipping, streaming service, discounted products and a multitude of other products and services. As the market continues to grow the stock price have steadily increased and the current market shares for Amazon stock is over six hundred dollars. Economics plays a key part in Amazons business practices and the products they offer their customers. The purpose of economics activities is so defined because of the peculiar characteristics of human wants, which are unlimited and the resources to satisfy the wants, which are limited (Bhat & Rau, 2008).

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

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

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