Fall 2014 BA301 Business Research and Analysis Amazon.com, too Cheap to Survive? E-commerce is among the top ways people are buying and selling goods these days. And when a person goes to shop online for the best deal, it is almost without a doubt they will peruse the hundreds of thousands of bottom shelf priced items on Amazon.com. Amazon.com is known for their wide assortment of products and brands as well as fast shipping. But what else is really keeping amazon.com alive? I believe a solution may be to create a physical presence in addition to their online presence, perhaps creating another brand that is openly owned and operated by Amazon.com or offering more services along with product sales to keep customers coming back. In …show more content…
People know that for the most part they can rely on Amazon.com for fast delivery and a wide selection of goods and somewhat affordable prices. Amazon.com has an efficient and advanced supply chain model, which is why they are able to guarantee quick product delivery to customers. They have strong customer loyalty due to their string customer service and unique business model. Customers freely and openly rate products and services which allows for greater customer satisfaction because customers are able to perform better product research in order to find the best fit for their needs. There are many benefits to be a strictly online business, for example having less overhead expenses compared to normal department stores with multiple locations and employees. and more money to give back to shareholders (Free SWOT). Customers can shop anywhere, anytime, and in any condition they choose. And depending on where the customer may live, they will always get their desired product within a week unless notified otherwise. It is easy to understand why Amazon.com has become a giant in the E-shopping …show more content…
There are hundreds of sites on the internet claiming to offer the best, lowest prices, and superior product or service. In just the blink if an eye it seems they yet another online department store has sprung up, Amazon.com has too stay on the ball in order to even stay in the game at all. There are many gateways for online hackers to enter and steal private customer information on the internet. Amazon.com has to stay updated with the latest and most advances anti spyware equipment (Free SWOT). Anybody can go on and order anything on Amazon which has gotten them in trouble in the past. Just this year the FTC filed a lawsuit against Amazon.com for allegedly charging parents millions if not billions in charges that children unintentionally incurred while using their parents phone or computer (Forbes). Amazon.com also must be careful and have and an extensive and detailed qualification process for vendors. Every vendor that sells product through Amazon.com represents Amazon.com as a brand with the delivery service, quality, and cost of the product there are
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.
The biggest success has been that Amazon.com has become a platform that other businesses can benefit from. Making Amazon.com a general platform for e-commerce operation has been made possible through their advanced technology investments and it has become a major success. Making Amazon.com available through a Web services interface to any developer in the world free of charge has also been a major success because it has driven so much innovation that...
Amazon.com operates in the Online Retail Industry. The sector is one of the fastest growing globally and is outperforming the ordinary retail marketplace. It was created after 1995 and it was only the Internet that made it possible for such an industry not only to be established but to become one of the most flourishing sectors in the business environment. What is interesting is that Amazon.com, together with eBay is the pioneer in the field. Both companies were launched in 1995 and are still extremely successful. The creation of e-mail in 1996 had a huge impact on the development of online retail by introducing a fast and easy way to communicate with customers. For this two-year period Internet usage doubled annually, thus, allowing for the expansion of the industry. Google is launched a year later, in 1998, only to become the most used search engine in the world and an essential partner for the online retailers by helping them tailor their websites to customer’s personal preferences and by advertising. After that, more and more people see the opportunity in the growing industry and enter it. By 2001 there are more than 513 million Internet users globally, which calls for action in terms of creating regulations and laws to protect the users and personal property. In 2003, Apple launches iTunes, and provides a platform for low-cost digital downloads. Another major change is the appearance of social media from 2004, which is one of the biggest influencer on the state of the industry. With the launch of iPhone in 2007, this trend strengthens as people get to enjoy the Internet anywhere they want to. From then on, technological advancements have made it extremely easy and fun to shop online, making it ...
Amazon’s macro-environment is made up of six external factors: political, economic, environmental, technological, social, and legal conditions. These factors are important because they shape how the company operates and you must know each piece to be able to compete within the retail and eCommerce industry. An evolving political factor are the efforts the government has made toward punishing offenders of cyber-crime. This kind of thief wasn’t walking into your store, but hacking into your computer. This type of crime wasn’t possible before the internet. The government has started to take these crimes more serious as technology evolves. Technology is a factor that Amazon.com must invest heavily in. They are reliant on having top of the line technology to survive against cyber-crime and to stay relevant in the tech world. ECommerce is everywhere now and competition is very high. This brings in legal conditions; Amazon must know what laws exist in which countries because they are a
Amazon is one of the largest online retailers in the world. The company reported better-than-expected second quarter results surpassing our estimates on revenues and earnings. Amazon is driving value across all its businesses and especially the retail business remains very hard to beat on price, choice and convenience. The company has a solid loyalty system in Prime and its FBA strategy, and content addition continues to add selection to Prime memberships. The AWS generates much higher margins than retail, so it has a very positive impact on Amazon’s profitability. Devices and IoT is also a potential growth area. However, Prime saturation in the U.S. market and competition in online retail remains concern.
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.
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,
In 1999 Bezos invested huge amounts of money to help Amazon become a more efficient company. He built warehouses in the United States to store inventory, in order to prevent under stocking during the holidays and also offer a greater selection of products that the companies distributors could not. Along with inventory, the company invested in logistics, such as controlling the supply chain through the same technology they used to create their unique website. Also they began to customize their website to individual customers. They stored information about the customers, which in turn made it easier for them to purchase goods on their website, which then reduced threat of the customer going to Amazon's competitors instead. Amazon wants the easiest and most enjoyable experience for customers when they visit the site. Bezos realized, that consumers need to have a good sense of security when purchasing products online, so the company invested in infrastructure and created an integrated system of customer service operations and payment processes.
Amazon.com creates value for its customers by offering customers broad array of products to select from through their website and ensuring timely delivery of products to exhibit high level of commitment towards their business and customers
Amazon model initially offered customers access to massive selection without the needs to incur cost, time and stress of opening warehouses and stores and the needs for inventory handling. Amazon realized to ensure customers get a pleasant experience and Amazon acquire its inventory at reasonable prices, they need to be in control of the transaction process from beginning to the end through operating the business from their own warehouses.
Amazon has recorded a magnificent success in its business throughout the years that it has been in operation. It has attracted almost all people to use it when necessary. Amazon has built its success in business methodically and slowly. Amazon has made much success because of its ability to read market trends and diversify its operations. It started as an online book selling company. However, it changed its operations and started selling other products. Currently, many large retail shops use Amazon to host and power their websites, for instance, sears and virgin megastores. Amazon now attracts over fifty million visitors in a period of one month. Amazon has tried to make their services fit each individual user. It has based its services on the end user. It has shipping discounts, customer product reviews and a credit card with bonuses. It also has prime membership, product forums and 1-click ordering system among other services. The company has tried to make a remarkable experience for customers and visitors (Thomas, 2006).
Comparing with the competition the products of Amazon are with high quality and lower price.
Eule, A. (2013). It’s time for Amazon to open its black box. Barron’s, 93(42), 37.