Internal and External strategy of retailer Amazon

Amazon. com is one of the largest online retail superstores on earth. From its humble beginnings in a car port to a global business employing thousands of people, the company has enjoyed huge expansion and success. The question that is asked is how do Amazon turn into a role model in the online retail industry?

History, Development, & Growth

It all started in 1994 when Jeffrey Bezos noticed a chance in the web industry. Bezos made a decision the bookselling market offered the best chance for his startup business. At that time Jeff Bezos's vision was an online bookstore that can offer millions more literature to large numbers more customers when compared to a typical bricks-and-mortar bookstore. Bezos chose the best location and expertise for this kind of business would maintain Seattle, Washington alongside Starbucks and Microsoft. The perspective that Jeff Bezos experienced for his new company was to build a web based bookstore that would be customer-friendly, easy to navigate, provide buying advice, and provide the broadest possible collection of literature at lower prices. Overall, Bezos's original mission was to make an online search to offer literature "that would educate, advise and inspire". (Hill, Jones, pg C115)

Jeff Bezos's Internet bookselling business all started out with a small number of employees in his car port in Bellevue, Washington. Bezos launched his company in 1995 with seven million dollars in borrowed capital and because Amazon was main major Internet or dot-com retailers, it received a huge amount of free national promotion, and Amazon quickly fascinated more and more book clients. Within weeks, Bezos experienced no choice due to success to relocate to a more substantial premise and hire more employees. Once more, six months later Bezos was moving to a larger facility and hiring more folks. Finally, after using project capitalists' money he made a decision to take Amazon public and issue stock. ON, MAY 1997, Amazon. com's stock started trading on the NASDAQ.

Therefore, in 1998 Amazon's market capitalization was 6. 8 billion dollars, almost double that of its two major opponents, Barnes & Noble and Borders. In 1999, your competition increased as Barnes & Noble and Edges began a price warfare with Amazon that led to falling reserve prices. An example of this occurred in the spring of 1999, Amazon along with Barnes & Noble and Edges announced a fifty percent discount off the price tag on new best-selling literature to guard their market stocks. This challenge would give the consumers a view which company would dominate the bookselling industry in the upcoming millennium.

During this time around, Bezos recognized that his backbone to his website and company could be utilized to market other sorts of products. At the same time, a lot of Amazon. com's stockholders were complaining about the company not being on track to becoming profitable fast enough. Jeff Bezos could observe that another online business that was growing was music CDs. He realized that catalogs and CDs were a good fit with one another, so in 1999 he declared his company's intent to become the "earth's biggest reserve and music store. " (Hill, Jones, pg. C118)

Next, Bezos made the decision that he previously to create more than only a bookstore if he wanted people to come back as customers. He added the option for buyers to write their own booklet reviews, that your customers enjoyed and could check out prior to placing your order the e book. People began to look at Amazon as an online community instead of a retailer.

At the end of 1999, Amazon possessed raked in over the billion us dollars in sales. Amazon began to explore other types of online retail endeavors as well to attempt to diversify itself. Nevertheless, starting in 2000, Amazon's stock plummeted because many people thought that Amazon. com grew too big too quick. Bezos was also acquiring a lot of static about not utilizing Amazon's brand name and core skills to sell other products online. Bezos taken care of immediately the critics that he had to make certain his company's business model would work successfully before he could commit his company to a common growth into new retail projects. No real matter what he wished to do or if he wished to wait just a little longer Amazon's stock price continuing to fall season and Amazon began broadening its storefronts and retailing more products. Amazon also got good thing about companies who found that operating a virtual site was very costly to operate. Several companies like Concentrate on, Toys R Us, and Old Navy jumped onto the bandwagon of working with Amazon. These company's would redirect their customers through Amazon where they could purchase the product and also have it delivered to them via shipment or the buyer could go to the closest store to choose it up.

Overall, by the beginning of 2003 Amazon experienced developed twenty-three different storefronts. By 2006, the company had produced to aiding thirty-five storefronts and retailing a multitude of products. It had been this point in the world of shopping that consumers were heading to the brick-and-mortar stores to see the product and they would go online and purchase the merchandise for much less.

Internal Talents & Weaknesses

Amazon. com has advantages that have sustained to help them out throughout the hard times throughout the market and in the industry. Among the talents that are apparent is the fact that they are the first mover on the market and has generated many do it again customers. Bezos has stayed ahead of the competition so far by utilizing the existing technology and by constantly observing the industries tendencies. Bezos appears to understand that by staying innovative and collaborating with others will ensure his company's success. Global expansion has contributed to keeping Amazon. com before its challengers. Another big part of Amazon's success is its customer-friendly website. Amazon. com also has a strong infrastructure with effective automated syndication centers.

Although Amazon. com has talents that gain them, there a wide range of weaknesses that they have as well. Sometimes I get the sensation that Amazon. com is trying to diversify itself a great deal that they do not have a well-paved path. We understand from the quest assertion, "We seek to be Earth's most customer-centric company for three main customer collections: consumer customers, retailer customers and creator customers. " that the business's concentration is on three primary customers. However, it generally does not recognize what business or industry these are concentrated. Amazon. com offers free transport on a lot of their products where during this slow economy it might jeopardize their position and financial result. Lack of diversity on Amazon. com's website includes not having different language editions of the website.

External Environment

Amazon. com has many opportunities to touch and has many threats that they encounter on a daily basis. Fortunately, for Amazon. com the market they are really in still young and not yet as popular as what it can and you will be. I am certain there may be some segment or industry that Amazon is not in that they could jump into and be successful. One place the company can look at to earn more income is their partnerships. They have lost several over the years to add some large players and they have not did the trick very difficult in increasing more lovers since. It appears as though anything they touch as it pertains to consumers, retailers, or developers is successful. A chance that they may be able to get into is the likelihood of collaborating with a huge manufacture of the good and become the only place online the consumer can buy the nice. It is visible by the percentages that Amazon. com still makes more income off their mass media. Another opportunity is the opportunity of creating a site and branching into Mexico, and South America.

Next for the threats Amazon. com still has many competition who on a regular basis still make an effort to steal as much of the marketplace from them as you possibly can. There are competition like Overstock. com, Buy. com, Wal-Mart, and EBay who is able to steal some of Amazon. com's market share. The largest external factor that is out of the control of Amazon. com is the possibility of individuals reverting to shopping at brick-and-mortar stores rather than online. Definitely, Amazon. com being an online store only can prevent their success if there is an incident that occurs across the web that makes the consumers feel threatened or feel there information is not safe while buying products online.


Overall, Amazon. com has a lot more strength's and an endless likelihood of opportunities due to the market and the industry changing daily. Amazon. com needs to focus on their competition and determine how they can get over their weaknesses. Amazon. com can further their e-commerce by widening to every country across the world. They can also expand and additional improve their robotic circulation centers to increase their efficiency and customer satisfaction. For Amazon's weaknesses, they can create a Spanish version of Amazon. com and review the marketplace demographics to ensure they understand and prevent any entry into a category that can fail. Next in order to improve Amazon's opportunities they need to make their brand more appealing and internationally known on the web. Amazon. com must focus on drumming up more partnerships in utilizing their software. They have to run special offers to compete with the brick-and-mortar stores as well as their competition. Finally, for Amazon's risks they ought to work to drive down the cost of the products and perhaps affect some partnerships with UPS or FedEx on the shipment to make all products free delivery for a certain month each year or something compared to that effect.

Corporate-Level Strategy

The corporate-level strategy of Amazon. com is explained eloquently by their mission statement, "We seek to be Earth's most customer-centric company for three main customer pieces: consumer customers, vendor customers and programmer customers. " Overall Amazon. com needs to do anything and be exactly what the consumers, retailers, and coders want. Amazon. com brings all three underneath one umbrella and spits out the same end result, they all leave from Amazon. com with the true e-commerce experience.

Business-Level Strategy

Amazon. com has four categories they focus on in their business plus they include their e-commerce offerings by category, third party advertising, infrastructure technology (cloud computing software) business, and their own gadgets business (Kindle). This is a mirror image of their quest statement as stated above. Bezos and his managers think that Amazon is a technology company first and foremost, and its objective is to use and develop its scientific expertise to sell increasingly more goods and services with techniques that gratify customers and keep its profits growing.

Structure & Control Systems - Do they match the strategy

Amazon. com made their business debut and their success off being truly a third party web store that sold hardcopy catalogs. Rather than spending almost all their time trying to safeguard that business, they may have a product that could one day revolutionize the entire business and industry. Amazon. com has recognized that they have to pursue other strategies or they'll be eaten up by your competition. They been employed by hard to make innovative technologies so they can provide a differentiated e-commerce customer experience plus they have been market leaders to make that technology available to others since it can be done that 1 day cloud computing will be the next big thing as soon as again Amazon would be the leader.

Does Amazon's structure and control system match their overall strategy? I think that it does they can be constantly looking at ways to improve their product of being an authorized vendor to a large number of companies. These are ground breaking by looking at various ways consumers, developers, and retailers want their products treated. They have purchased many small companies in several industries to improve the e-commerce experience they offer.

Something I find unique about Amazon that is driven specifically by Bezos is the fact that he empowers all employees to recruit and coach new employees so they quickly get up to rate in their new jobs. To encourage the employees to do this Bezos decided to give all employees stock in the business. The employees of Amazon own over 10 % of the company. Bezos also executed an insurance plan of decentralizing significant decision-making expert to employees and empowered them to find ways of get together customers' needs quickly.

Finally, the previous part about the composition of Amazon and its capacity to foster creative imagination and technology. Bezos thinks and does not allow teams within the company to be more than five to seven participants. This is what Amazon telephone calls " Pizza Groups" meaning no team should need more than two pizzas to nourish the entire team.


What recommendations could help Amazon. com any more than what they are really doing today. Amazon needs to continue to be innovative and continue steadily to drive the industry in to the cloud-computing era. In order for Amazon to continue to drive earnings up, they need to focus on more deals with large shops to make use of Amazon's software because of their websites. Amazon also needs to continue to make an effort to gain more retail manufacturers or stores to utilize them for their product sales. The next target audience or market Amazon should focus on should be our neighbors south, Mexico. This will help gain more of market share with the Hispanic demographic. Last but not least, Amazon needs to continue steadily to improve its Kindle and its network so people on the road can take their books with them everywhere they go and can download books at any time. Along with this Amazon should turn out with a Kindle that also performs music and films to compete keenly against Apple and the IPad. Amazon should never lose sight of these goals, enthusiasm, and competition. The competition is brutal and given the chance will take the market away from Amazon.

Overall, I believe that Amazon is doing an excellent job at leveraging their primary competencies in whatever ways they can find. With the eye-sight and command of Jeff Bezos, I assume that Amazon will be around for a long period. These were one of few that survived the internet bubble in the late '90's and the first 2000's and I really believe they can continue steadily to change lives and lead the industry of e-commerce. All the best and God Accelerate Amazon!

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