Amazon Kindle Fire: Case Analysis
Danielle M. Torres
Ivy Tech Community College
Author Note
Case Analysis Paper composed for
BUSN 204—Case Problems in Business
Instructed by Amanda J. Doxtater
April 3, 2018
Amazon Kindle Fire: Case Analysis
As the market demand for physical books continue to diminish, tablets with the capability of e-books are taking over the market. Amazon leveraged on the market and developed the Kindle Fire. In nearly three months, the sales captured half of the non-Apple market share (Sawhney, Owens, & Goodman, 2014, p. C13-C29). Since the introduction of the Kindle Fire in 2012, worldwide the sales of e-books grew from less than one percent to fifteen percent of all books sold (Sawhney, Owens, & Goodman, 2014, p. C13-C29). Through a case study analysis, the Amazon Kindle Fire is presented along with the company’s strategic profile and case analysis purpose; presenting a situation analysis; SWOT analysis; strategy formulation; and finally recommending a strategic alternative implementation plan for the continued success of Amazon Kindle Fire.
Strategic Profile and Case Analysis Purpose
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Sellers can also use FBA by stowing their inventory in Amazon fulfilment centers. In this case, Amazon assumes full responsibility for logistics, customer service, and product returns. Not only do they service North America, International strategies are also at the forefront. Taking the e-reader into consideration having this platform available for their customers and dividing up the Kindle into the sales of hardware and sales of software is where the value is. The operations to the distribution is focused on their customers of Amazon prime. The marketing of the Kindle series was set so that the unit was purchased at below cost and the sales on the software would compensate the loss (Sawhney & Owens,
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
Jeff Bezo’s began Amazon in his garage in July 1995 with three Sun workstations setting on wooden doors for tables and extension cords running from everywhere (Academy of Achievement, 2010). Right from the beginning he was a visionary leaving his well paying job as a senior vice president with D. E. Shaw to begin Amazon.com (Academy of Achievement, 2010). Being the visionary that he is he saw an opportunity prompted by the huge growth rate of internet use in a single year and ran with it never looking back. Jeff realized that the internet had “no real commerce to speak of” so he began researching possible businesses (Academy of Achievement, 2010). “After reviewing 20 mail order businesses and deciding which could be conducted more efficiently over the internet than by traditional means he decided on books” (Academy of Achievement, 2010). He thought books were perfect because attempting to send huge catalogs for all the available books would be expensive and cumbersome, but an online resource database that was easy to navigate would provide customers with easy access and a single point from which to shop. “In 30 days, with no press, Amazon had sold books in all 50 states and 45 foreign countries, obviously by the success of Amazon he was right (Academy of Achievement, 2010). In a case study written by Javad Kargar called “Amazon.com in 2003” he stated that “Amazon's online store was a big hit, with about $5 million in the first year of operations” (2004). This huge success so quickly would have confirmed for Jeff that his idea was viable and drove him to continue to strive for more. Jeff Bezo’s charismatic-visionary leadership is the key to his and Amazon’s success.
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.
When founder and CEO Jeff Bezos studied retailing opportunities on the Internet, he decided on books because there was a broad field of book publishers but too many titles to be carried by a single store. Everyone reads books but has different preferences about what s/he wants to read. Although Jeff Bezos had no previous experience in the book trade, he saw a business opportunity in selling books solely on the Web. He started the company out of his garage in a Seattle suburb, wrapping orders and then delivering them to the post office in the family car. The characteristics of the books retailing industry make it amenable to electronic commerce: a great variety of products and consumer tastes, and tastes which hanker after a lot of information about the products. Moreover, there is room for bringing down margins, i.e. offering customers deep discounts.
From the consumer side, Amazon provides services like Amazon Prime, which delivers free two-day shipping on retail purchases, on-demand video streaming and a free access to the Kindle library, everything for an annual
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).
Also, Amazon sells many products from many different brands and companies. The customers are most important to Amazon and Amazon knows that the delivery service is one thing that customers want the most. The way that Amazon fulfills the customer’s satisfaction of its delivery service is by having 55 fulfillment centers located in North America. Because fulfillment centers are not retail stores, Amazon products aren’t required to charge sale taxes. Along with the 53 fulfillment centers that Amazon has in North America, Amazon also has 53 distribution centers in Europe, Japan, Asia and India. Since Amazon has a lot of warehouses in many different locations, it can reach to its customers more conveniently. Amazon has been growing throughout the years has allowed its company to be able to reduce its costs. Besides being one of the top online shopping sites, Amazon has also developed the Kindle, which is now one of the most popular e-reader tablets out
One of the greatest opportunities for Amazon is an Online Payment System. The online system allows the company to reduce transaction fees and increase ease of use for their customers. Internet sales are increasing at a fast pace. This is a product of increased fuel prices, which make driving to a store less likely, and foreign purchases. This development allows foreign purchases to buy clothing as it becomes more popular abroad. Amazon’s biggest competitors can include retail stores that online stores such as Target, Best Buy, and Walmart among others, these can be considered the most dangerous for them since they have strong market share and can be a direct competitor since they attack the same market. Amazon wish to compete in prices, offering
Amazon Kindle is one of Amazon’s recent remarkable products. Kindle is a portable device which allows user to read, download, and store e-books due to its wireless connection and internal memory (Amazon, 2009). The first version was originally launched in US market in 2007 and achieved success as sold out in five and a half hours (Patel, 2007). Later, Kindle has been through several upgraded versions; Kindle original, Kindle 2, Kindle DX, Kindle DX Graphite, and the most recent version Kindle 3 with improvements mostly on the shape, contrast, memory capacity, and operating system. Earlier versions of Kindle had been criticized for its aesthetic and user interface issues. Reviews from customers and gadget experts motivated Amazon to further improve the product.
Moon, B. (n.d.). Sony and Apple Spat Over App Store E-Books May Hit Kindle. Welcome to Portable Electronics at About.com. Retrieved November 7, 2011, from http://portables.about.com/od/ebookreasers/a/Sony-App-Rejection.htm
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’s customer philosophy can be traced from a letter extracted to the 1997 Annual Report that stated their focal points by offering customers products that they think is worth buying. Amazon tries to set apart their operations by suggesting extraordinary way in doing transaction and start by offering online books whereby they can get access to it anytime they want. Other value-added offers include 1-ClickSM shopping, customer’s gift certificates and immensely reviews, browsing options, content and suggested features. Amazon strategy focuses on reducing the price. Thus, increase the customer value. Amazon became the market online bookselling leader by encouraging customers repeating purchases through the advertising strategy that is proven effective which was word of mouth approach.
.... Amazon uses the internet to allow customers to make content searches, for instance inside books. In addition it has used e-commerce to enable customers to buy online access to certain books through its upgrade program (Webanalyticsbook.com, 2007).
Legal Factors: Amazon is following legislative constraints and changes, such as health and safety legislation. Using a range of tools and techniques helps companies make fast decisions and remain competitive in the market. Here, we will examine some of the tools used by our chosen company: SWOT analysis, PESTLE analysis, and Porter's Five Forces analysis. As we can see, the SWOT analysis is an analysis of the micro-environment of the company, while PESTLE and Porter's Five analyses are from the macro-environment of our company. These analyses help the company be aware of the market, competition, and threats to the business.
...y discardable, but has an advantage of changing font size and page brightness. With this exception, print books are going to survive. To quote British actor and writer Stephen Fry, "Kindles are no more likely to replace books than escalators are going to replace stairs“ (9). Works cited: Fry, Stephen. The Fry Chronicles: An Autobiography. New York: Overlook Press, 2012. Print. Polanka, Sue, ed. No Shelf Required 2: Use and Management of Electronic Books. Chicago: American Library Association, 2012 Pratchett, Terry and Stephen Baxter. The Long War. London: Haper Voyager, 2013. Print.