Amazon Case

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Amazon Case

Introduction

Amazon has grown over time to become a large online bookstore and e-commerce retailer in the global market. The company serves millions of customers in about 150 countries. The growth and survival of the company relates to its competitive advantage and ability to adapt to changing market trends. The improvements in communication, technology, and transportation have enabled the rapid growth of Amazon’s businesses and commercial transactions. Globalization has allowed the company’s international diversification and innovation. The internet enabled international connectivity allows expansion of business into overseas countries allowing an increase in market size and sale.

The Evolution of Amazon

Evolution of through geographical/market diversification

Amazon.com was founded in 1994 by Jeff Bezos in Washington (Hoffman, 2). Originally, the company began operations as an online bookstore but later expanded to be the largest online retailer in the world. It offers its products and services through agreements, partnerships and specified acquisitions. The main objective of Amazon was to achieve profitability and sustainable growth in long term. This was achieved by maintaining a lean culture which aimed at increasing income while managing the expenditures and the working capital.

By 2008, amazon.com had greatly diversified to be a global brand with their websites in approximately 150 countries all over the world. Further, its main operations which were mainly handled in America spread to Italy and Spain by 2012. Statistics by Alexa showed that in 2013, the percentage of visitors of the company from different countries were 66%, 2.6%, 2.2%, 2.1% and 1.4% from USA, India, United Kingdom, Canada and Japan respectively (Hoffman, 13). Evidently, the company has a wide geographical reach. From a single employee since its inception, the company has over 50,000 employees globally who work in their different offices. These employees handle software development, customer service and finally order fulfillment to clients all over the world. Evolution through product diversification

Amazon has been known as a retail giant (Hoffman, 3). However, the company has greatly diversified its products, and now considered as a tech giant. Initially, the company only offered books for sale but later diversified to other products and services. The core business of Amazon when it was formed was online book selling.to ride on the competitive advantage; the company diversified its product offering to retail product. The website began selling various items such as movies, music, electronics, and pharmaceuticals among other products. The company realized the concept by third party vending strategy to increase product offerings and earned commissions. In 2007, the company launched an e-book reader which enabled their customers to read a large number of books and newspapers online. Later, Amazon launched a mobile e-reader and a cheap android tablet. The Amazon’s android-based products have led to direct competition with the Apple Company’s iPad. The diversification was fueled by developments from its team and competition from other companies. By 2010, the company offered a variety of products and services such as books, music, magazine subscriptions and video games to their customers. They also offered a credited card which benefited the company, customer and the bank. The product diversification that today focuses more on tech products has led to more shipments. According to Hoffman (13) statistical records of frustration free packaging, excluding Amazon branded products, are 250,000, 1.3 million and 4 million for 2008, 2009 and 2010 respectively.

Evolution through e-supply chain management improvements

The evolution of Amazon has been fueled by the growth of internet. The evolution of Amazon’s diversification can be attributed to globalization and growth of internet. According to Hoffman (2), “as people became more comfortable shopping online, Amazon developed its website to take advantage of increased internet traffic and to serve the customers more effectively”. The achievement of Amazon’s multiproduct strategy has been realized through its evolving website. Whereas the software solutions play a significant role in the integration and in enhancing the supply chain efficiency, it is mistaken to believe that an integrated e-supply chain management is as simple as installing a software tool (Chen, 10). The experiences of Amazon demonstrate that implementing an effective supply chain requires a heavy resource allocation, management and technical the amazon.com has undergone a lot of changes since its establishment with improvements being made regularly.

Multiproduct strategy

The Amazon Company pursues related diversification strategy. This strategy takes place where related businesses rely on the similar core competences for success and competitive. Amazon adopts this strategy to move beyond its current product offerings and existing markets, but within its industry. Specifically, Amazon adopts the related diversification multiproduct strategy. The related constrained multiproduct strategy suits the company’s businesses since the products and systems are related to each other.

To realize the related constrained multiproduct strategies, Amazon business and corporate behavior show certain characteristics. The company’s operations are largely carried out in one platform. The main resource owned by the company is the e-commerce website, the Amazon.com. The constrained multiproduct strategies are characterized by use of one major resource for business. The company’s website is the main resources used for competitive advantage. For an effective constrained multiproduct strategy to be achieved for economies of scale there must be successful sharing of primary tangible resource. The resources may entail plant and equipment or unique product delivery system. The website allows for operational relatedness. The website has ordering system, e-payment platform, and order tracking process.

The amazon e-commerce platform has helped achieve the constrained multiproduct strategy through shared information and resources as well as risks that are likely to face the company. To manage its inventory more efficiently, Amazon has a robust inventory delivery process. The company is able to regulate the inventory process in a manner that reflects the changes in market demand. Conversely, inventory management is always improved by gathering sufficient information relating to inventory such as logistics and production capacity.

The constrained multiproduct strategy is realized through closely managed resources and integration of services to cut on costs and realize savings. The focus of Amazon is to focus on its core competencies into the different businesses. Amazon Company’s corporate structure is characterized by centralization of strategic planning, human resource management, and marketing. The aim of the approach is to foster cooperation among the departments. The amazon company’s website is used for ecommerce, payment and billing and computing and web traffic databases. These websites provided technological infrastructure required by the company and the clients. This created reliability, for instance, ecommerce enabled the merchants to direct inventory when goods were purchased in the company’s fulfillment centers. By 2012, Amazon was a leading player in the ecommerce business all over the world. Further, the company has greatly invested in technological infrastructure to respond to this huge growth.

Works Cited

Chen, Te. Implementing new business models in for-profit and non-profit organizations:

technologies and applications. Shanghai: Idea Group Inc. 2010. Print.

Hoffman, Alan N. Amazon.com, Inc.: Retailing Giant to High Tech Player? Rotterdam School

of Management. 2013. Print.