Amazon Ecommerce Model

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Recommended: What are the chief elements of Amazon’s overall competitive strategy? How well do the pieces fit together? Is the strategy evolving

Amazon has been growing steadily but their year-over-year revenue has been decreasing since last five years and not all of their investments are turning a profit like pets.com & livingsocial.com ("Year-over-year revenue growth: Amazon & eBay 2015 | Statistic," 2016). Some of the challenges and opportunities that lie ahead of Amazon are growing competition from other online retailers as well as brick-n-mortar retailers shifting focus towards online shopping experience as discussed above. Brick and mortar stores like Walmart, Target and BestBuy are built upon the concept of convenience for consumers where they can get their hands on the products instantly. Retail cost is high as the locations are picked based on customer segment and density. …show more content…

This end up having an adverse effect on the brand name as their ecommerce model become inverse to their core concept of convinence. This has been the main reason why brick and mortar stores are not able to successfully transform their businesses into ecommerce model. However there’s an opportunity for them to operate their e-commerce model separately under a different entity through merger or acquisition e.g. jet.com for Walmart. Moreover there’s other possibility of some company emulating Amazon’s business model. Management must not get complacent and needs to be prepared for such competitions and should work towards devising pricing strategies to eliminate such …show more content…

Prime Air project is intended for streamlining the operations and logistics between its warehouses, and Amazon has leased many cargo planes to that effect. Given the reputation of Amazon, they have caliber to build a successful shipping and handling company in United States and provide competition to UPS and FedEx. Not to mention, majority of their business is provided by sales from Amazon only.
As the world moves to browsing and shopping on their smartphones, Amazon is left with a void from lack of branded mobile device in its portfolio. To put into perspective, during the Christmas season of 2015, Amazon received 70% of its orders via mobile devices. It would take Amazon few tries before it can strike a perfect balance between hardware and software, but it should make its presence felt in the mobile market share. Had they been in the competition, they would have taken some market share from Samsung as they struggled with recall of their phones due to battery issues.

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