Amazon Business Strategy 1

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

It can be served as a competitive advantage, which attracts more customers shifting from Amazon’s online retailer competitors into buying their products, thus increasing the market share.

Also, Amazon has emphasized on building “several distribution centers around the world to hasten deliveries”(Hof and Himelstein, 1999). Coupled with its software it provides a “laser-like focus on the buying experience”(IT Business Edge, 2012). Such a system and service is what draws customers towards Amazon and subsequently retains them.

This report has been designed to identify Amazon's strategy between 2007-2010 and also to pinpoint the company's strategic capabilities. Internal and External analysis reveals Amazon's position against its competitors as well as sources of value creation and cost reduction in its value chain.

The story of Amazon.com is a marvelous successful one. A company ́s biography which since the foundation in 19941 (followed by webpage launch one year later in 19952) became the world’s market leader in e-tailing by fully focusing on customer satisfaction and consequently aligning all organization activities, such as for example corporate strategy as well as technological portfolio, towards the consumer needs.

 The purpose of this report is to evaluate E-commerce structure and strategy of Barnes & Noble and Amazon. As e-commerce market is highly competitive, it is important for the company to develop an effective strategy in order to gain customer’s loyalty, remain profitable and maintain the company’s image

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.com is one of the biggest companies worldwide due to its strengths (See Appendix A for the SWOT Analysis). First, as an e-commerce retailer, it has a low-cost structure. It lacks the infrastructure and labor costs associated with maintaining and opening new physical stores. Second, Amazon has high brand equity due to its variety of products and low prices. Third, Amazon has a rapid revenue growth rate. To illustrate, Wal-Mart has increased its revenues by 77% for the past ten years, whereas Amazon.com has jumped by more than 1,000% for the same duration (Shaw, 2014). Fourth, two competitive advantages of Amazon.com are its information technology (IT) and supply chain management systems that work together in both determining what customers

Amazon, Inc. is considered to be the leading online retailer in the world today with a platform of sale for over 40 different goods categories ranging from machine/motor auto parts, books, groceries and electronics. Apart from this, the large organization also has a platform for internet technology and ecommerce, a platform for internet advertising, a platform for logistics and fulfilment, an internet incubator for startups, and a search technology. The company was started in Seattle, America back in the year 1994 in July by Jeff Bezos, who was a former New York investment banker. Before Amazon achieved its great success, it was the original idea of Jeff to start a bookstore to sell books online. The company has tremendously advanced from an online bookstore to a globally known online Wal-Mart where many products are sold such as Hardware and Tools, games and toys, Cookware and Music CDs. Amazon gross sales over the years have shown the company’s incredible growth with revenues back in 1997 being $150 million growing over $100 billion today (Kargar, 2004; Mellahi & Johnson, 2000).

1. Management – Amazon has many corporate controls in place to ensure the integrity of the organization (“Company,” 2011). First, they have a code of business conduct and ethics that lays out the ethical rules that must be complied with (“Company,” 2011). They have a system of internal auditing and controls in place to make sure that the company is not altering financial statements or committing any illegal activity in the financial reporting process (“Company,” 2011). Amazon has an audit committee that is responsible for these types of activities as well as reviewing complaints from within the organization (“Company,” 2011). Organization members are encouraged to anonymously submit instances in which employees are engaging in questionable accounting or auditing matters (“Company,” 2011). The audit committee also helps the board of directors in verifying the accuracy of all financial statements and its compliance with all legal requirements (“Company,” 2011).

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

The business to consumer, or B2C, model of electronic business sells products directly to retail consumers online. Amazon is an example of B2C model.

Introduction: Amazon.com has become the largest customer friendly online retailer and provides one click purchase facility to its wide range of products including books, music, toys, gifts, electronics etc. For 2011 Amazon’s net sales documented the value of $48077 million to earn net income of $631 million (Annual Report, 2011). Currently, Amazon is serving more than 137 million of its customers with its 56200 employees all over the world. Moreover, International traffic also ranks Amazon at 16th

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.

Electronic commerce industries that make “e-commerce” possible are growing at breakneck speed, altering not only how Americans, but also the global marketplace produces, markets, and acquires goods and services. In the e-commerce industry, it is generally agreed that Amazon.com provides one of the best business model “benchmarks” today.