Amazon.Com Essay

2007 words - 8 pages

Amazon.com is a company that distributes books and most recently music through their website. It was founded by Jeff Bezos and began taking orders in July of 1995. Since then, Amazon has acquired five businesses that range from virtual database technology to videos while expanding to the European market. The business level of Amazon.com is simple: cost leadership. Best selling books are sold at a 30 to 40 percent discount and other books are discounted at 10 percent. At the time of the case, Amazon.com's corporate strategy was single business to dominant business, but has since moved towards unrelated because they are offering more than just books at their website such as kitchen and housewares, toys and games, DVDs, amongst many other goods. Since Amazon.com was relatively new when the case was written, there was little that had been done with acquisitions and restructuring, although they had acquired Bookpages Ltd., Telebook Inc., and Internet Movie Database Ltd. in April 1998. Also, Amazon.com signed agreements to acquire Junglee Corp. and PlanetAll. These acquisitions signify Amazon's intent to expand beyond just book selling and into other online sales. Amazon.com has done nothing but increase in size since it began operations in July 1995, doubling in size every 2.4 months with an 838 percent increase in sales form 1996 to 1997. To keep up with this extraordinary growth, Amazon had 800 employees on its payroll as of August 1998.Amazon.com has plans in the works to capitalize on its increased market share by expansion into European e-commerce with already having 22% of sales from outside the United States. By acquiring previously established global companies, Amazon's expansion into international localities should be smooth. Part of Amazon's cooperative strategy is synergistic strategic alliances through acquiring businesses to expand into new product and market areas. They differentiate themselves while at the same time achieving their strategic mission: convenience, selection, service, and price. This has also been Amazon's CEOJeff Bezos' intent form the initial thought and continued to this day.The general external environment for Amazon.com is large and complex. Major geographical distribution is the United States where Amazon's sales are 78% in 1997, although they are not limited to this with 3 million customers from 160 countries. Age structure and population size are not of major concern with Amazon because their business is solely on the web and anyone with a computer can access their company. The economic segment does have an impact on Amazon because people will spend less money on recreational activities such as reading if there is a recession or inflation rates go up, though many people will continue to purchase books for the passage of time and entertainment. At the time of the case, the political/legal segment had little effect on Amazon.com although Barnes & Noble had sued them for claiming to be the world's largest...

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