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Amazon case study analysis
Amazon case study analysis
Amazon case study analysis
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Introduction Historical Perspective Jeffrey Bezos, the founder and current CEO of Amazon.com, initially started the company as an online bookstore in 1994. Within several months, Amazon spread its operation to all 50 states and abroad. Presently, customers from over 45 countries buy at Amazon. Over a short period of time, the company expanded sales to electronics, video games, software, CDs, DVDs, MP3 downloads, food, furniture, apparel, jewelry, and toys. Today, the company even produces its own products such as the Kindle series. Also, Amazon.com is one of the major providers of cloud computing services. Currently, the company is the largest global online retailer responsible for 20% of online retail market share. Key Success Factors and Strategies The key strategies and distinctive competencies that have led the company to success and its present position of a world leader in the Internet sales can be identified as follows. Firstly, Amazon.com employed the cost leadership strategy by offering products and services at lower costs than competitors. The key to making this strategy successful were the economies of scale that allowed the company to offer the largest range of products to its customers. Secondly, Amazon.com expanded internationally, pursued strategic acquisition and bought new firms to bring new services, assets, capabilities, services, and skills. Thirdly, the company is committed to delivering superior quality of products and services. It earned a reputation of a convenient and reliable brand that offers the lowest prices, one of the fastest and lowest shipping, widest selection of goods, and many additional features with its services. The fourth key factor was efficient logistics and distribution that allowed sprea... ... middle of paper ... ...viding convenience, innovations, and low prices. References Amazon.com. (n.d.). About Amazon. Retrieved from http://www.amazon.com/Careers-Homepage/b?ie=UTF8&node=239364011 Chaffey, D. (2012). Amazon.com case study. Smart Insights. Retrieved from http://www.smartinsights.com/digital-marketing-strategy/online-business-revenue-models/amazon-case-study/ Eule, A. (2013). It’s time for Amazon to open its black box. Barron’s, 93(42), 37. Forsyth, W.R. (2013). Citizen Bezos? Barron’s, 93(32), 7-8. Mirov, M. (2005). Seminar paper on strategies to achieve market leadership: The example of Amazon [PDF file]. (Unpublished paper). Technical University, Berlin. Retrieved from http://preibusch.de/documents/PreibuschS_FleckensteinM_Amazon.pdf Tsuruoka, D. (2014, January 9). Amazon’s third-party retailers sold over 1 billion items in 2013. Investor’s Business Daily.
History”, n.d.). But the unbelievable pace at which Amazon added new products and new customers proved to be a formidable barrier for any competitors. Within the first 10 years Amazon accomplished an unbelievable feat; it had 49 million customers and 6.9 billion dollars in revenue, and it had done so by selling some products at a loss to build market share (Rivlin, 2005). At times it was difficult leveraging so much capital to grow market share, but Jeff Bezos’ focus on the customer and long term growth of the company proved to be the real reason Amazon didn’t fall prey to the .com bust like so many other internet
Starting out as solely an online bookstore, Amazon has become the largest online retailer in the world.
Treanor, T.. (2010). Amazon: Love Them? Hate Them? Let's Follow the Money. Publishing Research Quarterly, 26(2), 119-128. Retrieved February 24, 2012, from ABI/INFORM Trade & Industry. (Document ID: 2377177581).
This strategy can benefit the company and its employees by direct and strict policies, in which it will relay to the employees to work harder and keep improving. In addition, this hard work and constant progress can result to the employees deeply appreciating their work and become more confident about themselves. If both the employee and managers are pleased about the performance and outcome, then the customers too will appreciate the service and product they receive. Also, a customer who becomes satisfied with their service will most likely become a loyal customer. In turn, the company will gain growth in profits and recognition from other customers. A successful business model or strategy like Amazon’s should be adapted by other companies to ensure the success and development in both the company and its employees. Just like what David Rockefeller said, “Success in business requires training and discipline and hard work. But if you’re not frightened by these things, the opportunities are just as great today as they ever
Amazon is the biggest online store in the world; since its creation in 1995, Amazon has adopted improvements throughout its processes changing considerately. This reports describes the changes adopted by Amazon. In addition, this report generates a diagnosis of each step and makes a deep analysis of the decision makings by amazon based on three specific topic; 1) when Amazon managed inventory internally; 2) when Amazon decided to outsource inventory management and lastly when amazon decided to sell products of competing retailers on its site.
Another part of Amazon’s retail strategy is to serve as the channel for other retailers to sell their products and take a percentage of cut of every purchase. Amazon does not have to maintain inventory on slower-selling products. This strategy has made Amazon a ‘long tail’ leading retailer, expanding its available selection without a corresponding increase in overhead costs.
Jeff Bezos started with an idea to sell books on-line by being able to hold more books than any other brick-and-mortar store. The first mover advantage that Amazon gained has not let up since. Amazon has created customer loyalty through the use of 360 degree customer profiles and product recommendation system. Furthermore, Amazon has allowed access to big data for a monthly fee and created a web store for businesses saving on huge investments in development for a commission on sales. Big data is constantly evolving and Amazon is ahead of the curve with the application and analytics of big
Launched by Jeff Bezos, the Amazon.com website started in 1995 and is today considered as one of the most prominent retail website on the internet with a record turnover of US$ 14.87 billion in 2007. Jeff Bezos’s intention was to create an internet based company with the most dedicated product portfolio on the internet where customers could find anything they might want. Amazon’s success is based on technology, services and products (Jens et al., 2003).
Amazon has been able to maintain sustainable competitive advantage based on three operational strategies. These are low cost-leadership, customer differentiation and focus strategies. Low cost-leadership is pursued by Amazon by differentiating itself primarily on the basis of price. By offering low prices to customers Amazon ensures its future success. Partially modifying the costs of lowering prices over time through achieving higher sales volumes, negotiating better terms with suppliers, and achieving better operating efficiencies. Amazon makes sure that it offers the same quality products as other companies at a considerably cheaper price. Another strategy that Amazon has is its fast delivery service and there are many delivery services that one can choose from. With Amazon Prime, there are certain, but many products that have free two-day shipping. Also, with Amazon Prime, there are many offers specifically for people that have Amazon Prime. For example,
When Amazon.com first began in 1995, as strictly a book retailer, Bezos knew he had discovered an excellent company. After all, a physical bookstore cannot stock anywhere close to the number of books Amazon can offer online. Within a year, the company had a customer base of approximately 340,000 consumers and daily site visits were huge as well. But Bezos wanted to expand the company to offer music and DVDs, because he realized there was little or no barrier of entry. In the next years Amazon would emerge as a marketplace, expanding the company globally offering products from toys to kitchenware. Because of the relatively cheap prices Amazon was offering and also the growing number of online shoppers, the company was doing tremendous amounts of sales and creating profits.
Diversification-moving away from core competence- At the beginning, Amazon’s focus was selling books online and they have now moved onto difference ventures. While branching out helps the company to grow, they may be doing too much and losing their strategic advantage. If they don’t focus in on what made them successful, they could get lost in the shuffle and open themselves up to
Amazon.com was a venture into an emerging market of internet and had to face hidden and unexpected hurdles in order to survive and excel in the market. Therefore, Amazon.com kept modifying its strategies with their focus on enhancing customer experience of online shopping and to delivery exceptional services with complete convenience to their customers. One of the major strategic decisions was to compromise on cost saving stragegy when Amazon.com started to maintain its own warehouses in different countries in order to ensure timely and accurate delivery to their customers
Amazon is best known for their kindle, fast shipping, and selling various products (Smith). With Amazon being such a large corporation, professionalism, academics, character, and engagement are crucial parts of the success of the company. Professionalism: Amazon has grown to become the largest internet-based retailer in the world by total sales. It began as primarily an online bookstore and soon began to sell more and more electronics and then over time began to sell pretty much anything. In 1998, Amazon earned about $0.6 billion, which held steady growth from 1998-2006 (“Amazon.com”).
In conclusion, Amazon has embraced innovation. The company has not had worries with the use of innovation. They use innovations as measurements and end up with flourishing business ideas. They experiment, learn through outcomes and try new ways of doing things. They have put the customer as their first priority. Everything that the company does gears towards attracting customers through quality of services, availability of products, assurance of delivery and addressing customer feedbacks. These factors have helped the company become a multinational and a multimillion company where customers flock everyday.
Amazon is the world’s largest retailer online. Founded in 1994 it has started as an online bookstore but soon expends its catalog with software, video games, electronics, furniture, food, toys etc.