Seattle. Jeffrey Bozos, it funded soused on the e-booksellers activity from 1995 to 1998 and turn his company into a generic online selling website in from 1999. In 2005, the company has 9,000 employees and a turnover of approximately 8. 49 billion dollars. Amazon’s core business Is focused around the sale of books that It carried out through a single means of distribution: the Internet. Its aim Is to compete with bookstores, supermarkets and vendors correspondence.
With Its success and because of a fast development of the company awareness, Amazon broke into the new industries: sale of video games, DVD’s, software, multimedia devices. Amazon has adopted different strategies: first a volume strategy to sell a mass production, the company negotiates good volume in order to reduce the price. Then the differentiation strategy, using a new sales channel and lastly the diversification strategy, which allows Amazon to offer a wide range of product to its actual consumer, while attracting new ones in the same time.
After only 2 years of existence, the company was floated on the NASDAQ In New York. The explosion of Internet use allowed the company to become one of the world market leaders for the sale of cultural products. The SOOT analysis Strengths Weaknesses I Amazon. Com Is ten world leader In e. Laying. “Delta asana model Nine Dustless model of Amazon is a model that could be improved and adapted to reach divers targeted markets.
Amazon skills in “group code recording” are a very important competitive advantage that ensures a better survival in these markets. High level of awareness of Amazon. Com. Market in the “57th in the ranking of brands by U. S. Internet users. “A very important client portfolio + 25 million. A platform very well optimized grouping the main keys to success for Amazon (“group code recording, Brand Management, Computer Networks)Competitive selling price of 1 5 to 50% lower than the prices offered in the traditional distribution.
I Slowdown in the volume of sales (13% in 2001 against 169% in 99)Limitations concerning the e-commerce platform at technical, functional level, and also a complexity in systems and maintenance. Marketing and Logistics expenses still high and difficult to control. I Opportunities Threats I Increased in the diversification and internationalization activities between 2000 and 2001 (33% to 35%) explained that there are still opportunities in other Business Unit untapped by Amazon [as JP Bozos said: “The development of DOT.
COM is now going through diversification “]lancer’s in the real market in the USA Book industry 3% 99 and 5% in 2001 = still shares recover. The new market of online books (Kindle, ‘pad… ) I Large direct competition “Barnes & Noble” which ensures a better distribution and delivery within 24 hours. Risk of customer attrition (elderly person) known to be more resistant to changes often hostile to the internet. Diversification strategy defined so far can generate some management costs of certain Business Unit and induce their disappearance. I The evolution of Amazon Revenues