Looking at Bezos’s business model from an entrepreneurial standpoint is very interesting. He decided to take a very unique approach to business and in doing so he took some big risks to get where he is today. For a company like Amazon that is constantly pushing the boundaries and moving into new territory one could do a SWAT analysis for nearly every year they have been in business and it would look drastically different. For now I want to retrospectively focus on the initial plan that Bezos laid out and strengths, weaknesses, opportunities, and threats that came with it.
There were many strong points in Bezos’s business plan. He carefully planned every detail of this business. One of the key strengths that Bezos relied upon was his unique understanding of both computer science and marketplace economics. His degree in computer science combined with his years working on Wall Street gave him a broad perspective on the e-commerce market. He understood what the technology would look like in order to make his ideas reality. He also had a firm grasp on the economics of the market. He knew that branding would be the essential differentiating factor between him and his competitors. He also knew that the best way to establish a strong brand was by putting your customers needs and wants first and letting the investors take care of themselves. He did not care for the idea that good customer service was just a way to drive profits. Instead he took the approach that good customer service is a way to drive growth, which in turn would drive better customer service.
The main weakness in Bezos’s business plan was that it called for fast growth with low profit margins. As a startup company this is not something that investors generally want to see. Bezos was relying heavily on his vision for how this company could grow. He intended to break the rules of finance in the name of progress. He was swimming against the current. Investor’s would have trouble initially sharing his vision without the numbers to back it up.
The opportunities in this venture were enormous. The “wake-up call” that invited Bezos to enter the online retail market was when he came across a report projecting annual web growth at 2,300 percent. To Bezos that report was the essence of the term “business opportunity”. In a 1998 article in Success magazine, just one year after going public, Bezos declared:
I projected myself into my 80s and asked what regrets I had about my life. And I realized that, at 80, I probably wouldn’t even remember all the things that seemed so important right then, like forgoing the end-of-year Wall Street bonus. But I would definitely remember that I’d ignored the emergence of the Internet just as it was happening and tell myself I’d been a fool.
He was at a crucial time where investors were beginning to take notice of online retailers, and consumers were warming up to the idea of buying products online. Bezos drew up a list of 20 items that he could...