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Case Analysis Of Amazon

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Amazon. com: An E Commerce Retailer I. INTRODUCTION In June of 1995, Amazon.com was officially launched on the World Wide Web. The company was one of initial noteworthy companies to process transactions for products over the internet. It was launched at just an online bookstore originally but has since re-engineered its product lines to incorporate CDs, DVDs, electronics, computer software, video games and toys, and a lot of other products as well. It began in Seattle, Washington, and now is an established competitor globally. 1. In the case study, Amazon.com: An E-Commerce Retailer from Strategic Management and Business Policy, Wheelen, T. L. and Hunger, J. D. 11th ed., Jeff Bezos, Amazon’s CEO is faced with evaluating and possibly formulating new strategies in order to keep Amazon.com on the forefront of what consumers are looking for in online shopping, to remain competitive, and profitable. One alternative is to expand the business into online auctions, such as the company E-Bay. The product offerings would exponentially become much larger but the day to day operations would possibly be too costly for cost-effectiveness. The second alternative is to partner with other retailers to add variety to their product lines and utilize their IT capabilities to create partnerships that mutually benefit the companies. 2. Amazon had a business model that was posed to expand its strategy to include partnerships with established retailers who wanted to streamline their online capabilities. Under this model, Amazon acted as a logistics provider and helped such companies upgrade their online distribution systems. These 3rd party partnerships with large retailers would broaden Amazon’s service offerings and create allies with retailers ... ... middle of paper ... ...’s typically harder to be aware of how to be competitive and what growth demands are on the horizon. An alternative option available to Amazon.com is to provide customers with greater value for their money through utilizing a best cost provider strategy. Amazon has the information available to them. They could use their current status of best cost provider through offering products with superior features at a lesser cost than their competitors because they know all the products and retailers intimately. This strategy offers Amazon with the possibility of combining the low cost provider strategy with the differentiation strategy. The difference between a best cost provider strategy and the low cost provider strategy is that the best cost one is aimed at value conscious customers, whereas a low cost one is directed towards the budget conscious sector of the market.
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