corporate analysis paper on amazon
Byers, A. (2007). Jeff Bezos: the founder of Amazon.com. New York: Rosen Publishing Group.
Kotler, P. (1988). Marketing Management (6th Edition ed.). Englewood Cliffs, N.J: Prentice Hall.
It is interesting that Amazon was having this debate in about the elements of RFM analysis (described in Chapter 6 of Internet Marketing), 1997, after already having achieved $16 million of revenue in the previous year. Of course, this is a miniscule amount compared with today’s billions of dollar turnover. The important point was that this was the start of a focus on metrics which can be seen through the description of Matt Pounds work later in this case study.
Finally, Amazon has also facilitated formation of partnerships with smaller companies through its affiliates programme. Internet legend records that Jeff Bezos, the creator of Amazon was chatting to someone at a cocktail party who wanted to sell books about divorce via her web site. Subsequently, Amazon.com launched its Associates Program in July 1996 and it is still going strong. Googling http://www.google.com/search?q=www.amazon.com+-site%3Awww.amazon.com for sites that link to the US site, shows over 4 million pages, many of which will be affiliates. Amazon does not use an affiliate network which would take commissions from sale, but thanks to the strength of its brand has developed its own affiliate programme. Amazon has created a tiered performance-based incentives to encourage affiliates to sell more Amazon products.
Amazon.com Inc.’s e-commerce success relies on the effective use of business strengths. In the SWOT Analysis framework, this aspect enumerates the internal strategic factors that the company uses to maintain and improve its operations in the online retail, technology products, and online services markets. The following strengths support the success and continuous growth of Amazon:
There are various opportunities to improve Amazon’s business performance and service quality. In the SWOT Analysis model, this aspect identifies the external factors that the company can use to enhance its business, such as through growth in the international e-commerce market. In this case, Amazon has the following opportunities:
What is the key to such success? According to the AmazonвЂ™s report, the online storeвЂ™s success lies in its low cost structure, the largest merchandise selection and a huge number of third party sellers.
Source: Strategic Management Insight
However, Amazons overall cost leadership with little product differentiation means that its business model has been copied by me-too competitors in a cutthroat price war that has left everyone bruised. Further, its focus on cost reduction at the expense of product differentiation means that its products are available on other portals as well and there is no product line that is exclusive or unique to it.
Further, a worrying factor for the company is that it has not made profits in many of the quarters over the last three years. A possible reason for this can be its excessive focus on cost leadership, which means that in the race to the bottom its bottom line is being impacted.