Competition- Amazon has many competitors they are up against. They have the retail market competitors like Wal-Mart and Target, the online competitors like Ebay, and then various other businesses depending on the product category. For Jeff Bezos, he wants the business to focus on the customer (Bishop, 2013). While other businesses are distracted with trying to get ahead of Amazon, Amazon is focused on the customer and not the competition.
is a global company that offers internet retail shopping services. Amazon was an online book retailer established 21 years ago during the 1994s, and has grown exponentially in sales and size as the years have gone by. Jeffrey P. Bezos started it in July 1994 and has led to its success. It was possible because of the strategies Amazon used. Emerging of online banking on the internet gave rise to the idea of online shopping. To become a competitive firm strong strategies are to be made. Amazon positions itself as a low-cost retailer and offers a wide range of products and services via online which is unique in the internet retail business. Amazon competes healthily and preserves its competitive advantages as it constantly upgrades itself in the dynamic market. It also shows that Amazon can continue to grow and achieve it mission and vision of being "earth's most customer centric
Although Amazon has been active trying to find the perfect strategy to make profits, the numbers in its financial statements had not shown the most optimal results. We have discuss that even though its strategies have been right according to supply chain and logistics methodologies and theory, something had been missing to represent this successful strategies into financial results. It is seen that Amazon had spent too long time finding the right strategy which the last might be the one because in the financial statements profits started to come up. Amazon still have a long way to go to mature its strategy and represents it into profits for its shareholders.
Amazon has a few downsides, but the company's relentless focus on the customer has built a strong moat around its business. Amazon doesn't make much in profits, but the durable competitive advantages of its business lines are enormous and growing rapidly. Amazon has a very favorable image in the minds of millions of consumers, which paints a very pretty picture for the company's fortunes in the long term. (Faruk, 2013)
With very humble roots, Amazon.com grew itself from a tiny garage start up in 1994 into a multibillion dollar corporation in just twenty one years. Jeff Bezos, the founder of Amazon transformed a modest book selling website into the largest online retailer of all products which survived a giant collapse in the economy and the dot com bubble, helping Amazon start its own agenda. Amazon was vastly different than many other dot com startups due to its realistic, long term, and growth focused agenda, which greatly differed from the unrealistic, quick online startups whom mostly disappeared during the decade. Amazon has been one of the frontrunners in the new digital world, by displaying a progressive business model that builds for growth, and creating a positive future for
From 1997 to 2000, Amazon experienced positive growth in net sales, making this upward trend likely to continue on into 2001. While operating expenses in fulfillment, marketing and technology also increased, these expenses were necessary to solidify Amazon’s opportunity for future growth and profitability. In 1998 and 1999, Amazon “spent over $429M to build a state-of-the-art digital business infrastructure and operations that linked nine distribution centers and six customer service centers located across the United States, Europe, and Asia” (Applegate, 2009, para. 1). This strategic expense in technology and restructuring suggests that future operating costs would likely level-off and the company would eventually cross over to begin making a profit.
The company accomplishes this by operating six global internet sites: www.amazon.com, www.amazon.ca, www.amazon.de, www.amazon.jp, www.amazon.co.fr and www.amazon.co.uk. Through their zShops, auctions, affiliate program, Merchants@ and Amazon Marketplace programs, Amazon, and their sellers and partners, offer new and used collectibles and products in categories such as apparel and accessories, DVDs, electronics, computers, books, music, videos, cell phones, tools and hardware, the list is almost endless. In order to maintain quality, the company packages and ships all of its merchandise. They also continue to negotiate volume deals with suppliers to meet their goal of lowering prices.
Growth is core to Amazon.com's business strategy, and that has had a significant impact on the way they use technology: growth through more categories, a larger selection, more services, more buying customers, more sellers, more merchants, and more developers, increasing the different access methods, and expanding delivery mechanisms. The impact has been on many areas: larger data sets, faster update rates, more requests, more services, tighter SLAs (service-level agreements), more failures, more latency challenges, more service interdependencies, more developers, more documentation, more programs, more servers, more networks, more data centers. A large part of Amazon.com's technology evolution has been driven to enable this continuing growth, to be ultra-scalable while maintaining availability and performance.
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,
Amazon is a growing and trending brand, giving consumers the unique shopping experience they have always wanted. The company that was started by 1999 man of the year, Jeff Bezos, has taken 44 percent market share in online sales and purchases. (http://bloomreach.com/2015/10/survey-amazon-is-burying-the-competiton-in-search/) That makes consumers more inclined to search for products through Amazon, before the well-known search engine powerhouse, Google. The Seattle, Washington based company was started in 1995. During the well-anticipated start-up, the company’s focus was on book sales online. Over time, Amazon has set many trends in Consumer Behavior, expanding products across every product pool imaginable. "Amazon.com puts the customer
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.
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
Technology has played a huge role in how companies today conduct business with their consumers. Over the past few decades there has been a shift in business models and strategies because of the emerging innovation in technology. One of these innovation are e-commerce, businesses that use e-commerce can now see a major difference in sales and revenue. Amazon has taken the idea of e-commerce and turned it into a successful and profitable business. Amazon Company developed a brilliant strategy for emerging into an already competitive market. This entails the revision of an existing concept. Unlike major companies like Apple, Microsoft that invented new products and services, Amazon did not need to create a whole new product but to create a better business model system that can be used in the future. This helped their rise to fame by taking over an existing idea but improving it to match consumer needs and wants. Overall companies will need to develop better business strategies to be able to evolve into e-commerce industry moving forward.
Amazon is an industry leader in terms of innovation, ability to scale its business and in breadth of products offered. Because of
Competition – The biggest competitor of Amazon is EBay and all the internet retailers and suppliers as Priceline.com; Buy.com; BN.com and many more.