Value Creation of Amazon Essay

1801 Words Oct 2nd, 2012 8 Pages
Value Creation of Amazon

1 Introduction
With the development of technology and economic globalization, the lives of people have been enriched and online shopping is becoming the first choice of the majority. Amazon Company is an online retailer which has the most varieties of goods in the world. This report would introduce the Amazon’s background first, following with the discussion and analysis of Amazon’s strengths and weaknesses as well as its opportunities and threats. At last, this paper would propose and defend one of the most appropriate strategic directions of Amazon Company in different aspects to take over in the next three to five years.

2 Introduction and analysis of Amazon

2.1 Amazon’s background
Amazon is a Fortune
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Firstly, Amazon has an excellent service software system. Approximately 20% employees of Amazon are doing software development, from the book retrieval system, purchase system to the payment system, such as One key shopping, Personalized recommendation, Personal hobby management, E-Card service, Amazon-Wedding, Your Amazon Home and so on. Each part of the function on Amazon website has been well-designed to ensure web services are powerful, reliable and secure (Shepard, 2009). Secondly, Amazon Company has a variety of selectable products. Amazon Company today is developing toward a one-stop online retail website. Customers can find almost all products they may be interested in. Such a wealth of books and other types of goods can greatly satisfy the needs of any consumer. Thirdly, free delivery is the most attractive selling point of Amazon. For many years, the reality of online shopping’ expensive shipping charges cause consumers devoid of their passion for online shopping. The free delivery service launched by Amazon dispelled the concerns of the customers completely (Shanahan, 2007), and it is now a big advantage of Amazon. What is more, Amazon as an online retail store could eliminate a series of costs such as rental expenses, employee salaries, and storage charges (Spector, 2000). The lower operating cost is a guarantee

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