The Marketing Strategy Of Amazon Essay

The Marketing Strategy Of Amazon Essay

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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.

Amazon.com is one of the largest e-commerce companies in the world. Although the primary product line was books at first, the company rapidly diversified into a host of other product categories. The current focus is on building video content, primarily for Prime subscribers because the growth prospects in that market are considerable. Product selection, a superior user experience, bargains and customer feedback have helped the company build a strong position for itself in the fast-growing ecommerce market. The growth of the e-commerce industry, with consumers increasingly buying things online is a dynamic going in favor of the company. While the big brands may build their own online stores over time, a platform like Amazon allows discovery my new buyers. Smaller players are far more dependent on Amazon as they don’t have the resources that Amazon has to invest in technology and fulfilment to generate the kind of reach that Amazon can deliver. Moreover, the market is in the early growth phase (considering opportunities in intern...


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... growth phase and protect against the cannibalization of its traditional media business. Moreover, these investments have increased automation in the fulfillment centers and led to huge volumes of quality content, which along with the strong growth in third party units are positive for gross margins. The increased investment on the AWS side, while initially a drag on profits, has paid off big time.
Amazon has a strong balance sheet, with cash and short-term investments of $15.86 billion. The company added some debt in 2014 at attractive rates that will help it to generate cash for expansion. This led to insufficient interest coverage in 2014 that was completely reversed in 2015 as the AWS business took off. Cash and short term investments are around 26% of total assets and the debt cap ratio (including long-term liabilities) was 55.2% at the end of the last quarter

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