The Success Of Amazon.Com Essay

1138 words - 5 pages

The Success of Amazon.comAlthough most dot.coms experienced the repercussions of falling technology and Internet markets in the late 1990s and ultimately failed, Amazon.com, a company that operates on the "audacious combination of ambition and idealism" (Hansell 2002), has managed to stay alive by implementing innovative strategies that have fairly ignored the Company's fluctuating and often unstable financials while hedging its success on meeting the demands of consumers by diversifying the product line that it sells on its web sites.Amazon.com entered the e-commerce market place in 1997 with the primary goal of becoming the leading online book retailer. The Company made this move with the full understanding that it would mean putting its success up against a large number of established and successful brick and mortar book retailers like Barnes and Noble and Waldens books stores. The risk paid off, despite the fact that its brick and mortar competitors soon followed Amazon's example by creating their own online stores. Amazon's founder Jeffrey Bezos was undaunted by the new online competition, rolling out a strategic but risky plan to become the leading source of not only books, but also a variety of products that online consumers were demanding.Amazon's early success is credited to its supply of books, music and videos, products that were fairly the most in demand products at the time that the Company launched its official e-commerce web site. Because the Internet lends itself to the proliferation of thousands of commercial e-commerce web sites, Amazon.com soon found itself subject to the competitive strategies of other online retailers selling similar products. The Company would respond by focusing on selling products at discount prices, a strategy that quickly worked to increase its customer base but also threatened its profitability and its longevity. At the same time, the Company's low-price strategy differentiated it from other online retailers, an indirect advantage that would distinguish Amazon.com from its competitors (Hansell 2002).The Company's founder Jeffrey Bezos is uniquely aware of the challenges that face a solely online retail business like Amazon.com. Not only is it vulnerable to the challenge of a global market place receptive and even encouraging to numerous competitors offering similar products, the Company must also deal with the challenge of maintaining its brick and mortar operations, which includes striving for cost efficiency in product storage and shipping. What is unique about Amazon.com is that it has focused on cost efficiency as a means to pass on lower prices to its customers (Hansell 2002).Among the strategies that Amazon.com has subsequently employed to keep itself afloat is to create alliances with other product distributors. For example, Amaon.com recently clinched a deal with the consumer electronics giant Circuit City to sell its products online. Although Circuit City has more than 600 retail stores...

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