Amazon.Com Case Analysis

1233 words - 5 pages

About Amazon.com In July 1995, the time when the Internet usage was growing at 2300 percent a year, Jeffery Bezos launched his venture, Amazon.com, on the Internet. By the end of 1996, his firm was one of the most successful Web retailers, with revenues reaching $15.6 million. As revenues surged quarter after quarter, Bezos decided to take his company public. To date, his attempts to transform the traditional book-retailing format through technology that taps the interactive nature of the Internet has been very successful. Now Amazon.com is growing to become the center of e-commerce. However, Amazon.com continues to face many formidable challenges such as big competition in the industry, building up the unique core competencies to compete with the competing businesses and keeping up with the new developing technologies.External Environments: Opportunities and Threats The competition in the Internet business is very high because there are almost no barriers to entry due to the flexible and non- regulated environment. The suppliers, which in this case are the publishers, can exert power over firms because they are a credible threat to integrate forward into the book-selling industry, by dealing directly with customers. There is also the potential for publishers to be ¡°disintermediated,¡± because computer literate writers can now publish and distribute their own works online and eliminate the existence of the physical books. This increases the substitute products and the bargain power of the customers because instead of getting a book, customers can search the Internet and read what those computer literate writers had published, at no cost. Also, the competition in this industry is very vigorous. For example, Amazon.com is expanding their selection to become the center of e-commerce, and Barnes and Noble reacted to Amazon.com action by concentrating in gaining a larger share of the retail book market. These conditions of the external environment factors are forcing Amazon.com to become more focused on the needs of their customers in order to retain a more direct relationship with their customers and possibly to reduce the bargain power.Opportunities are plentiful in the world of e-commerce. Since amazon.com is an Internet retailer, web advertising gives it a unique opportunity to track the success of an ad by the number of click-troughs to the store¡¯s Web site and the number of Internet surfers who actually purchase something. Also, today the Internet is a powerful media for shopping where no physical store is necessary. The users on the Internet are growing each day and the rapid growth of the on-line businesses is spreading to book publishing and retailing.On the other hand, some external environment factors become as threats to the company. On of the threats that Amazon.com is facing is that he company needs to be constantly in touch with the latest technology to help them provide the best service possible....

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