Amazon's Case Study
Essay by Maxi • June 26, 2011 • Essay • 1,017 Words (5 Pages) • 2,436 Views
Case Study 1 - Week 1
Maria Mines
Amazon's competitive market position is online shopping. It is considered the premier online retailer.
Its products have expanded from selling books to CDs, DVDs, and videos. The company reacted to its
threats from eBay and Yahoo by collaborating with the Gap and Eddie Bauer, and they run the other
companies websites which is called powered by Amazon that allows them to be a one-click ordering
company. The founder and CEO, Jeff Bezos, identified that the pressure from the financial markets and
decided to change the short-term profits in order to build long-term growth, increased market share,
and increased shareholder value. Bezos did this through the phases of strategic management of basic
financial planning, forecast-based planning, externally oriented (strategic) planning, and strategic
management. Bezos reviewed Amazon's year budget and realized that they had heavy competition, so
he decided to abandon the short-term profits in order to build long-term growth. With the decision to
build long-term growth, he proposed a five-year plan by gathering information on the competition in
addition, reviewed the current trends of online purchasing. He then processed the strategic planning by
changing its market of expanding its business from just selling books to now selling CDs, DVDs, and
videos. He then gained the commitment from the employees including top managers, lower-level
managers, and key employees at all levels, to achieve Amazon's primary objectives.
The strategic factors facing Amazon are determining its SWOT analysis (strength, weakness, opportunity
and threat). Its strength is being considered the premier online retailer, its weakness is only having
products of books, CDs, DVDs, and videos, its opportunity is to grow to beat its online competitors, and
its threat is the success of eBay and Yahoo.
I do believe that Amazon has core competencies being that it can reinvest in being a one-click ordering
company. It is a great advantage for Amazon because it allows them to have control over the other
company's websites. Amazon has recently announced that it is replacing its Zshops with a new
Storefront format. Its purpose is to display only the seller's marketplace exclusively. Customer service is
very important to Amazon, which is why, they created the Storefront. It will allow the customers to a
better selling experience.
The programs offered through Amazon are share the love, A to Z guarantee, and product
recommendation. The share the love program allows customers to add their family and friends to their
contact list so that they will receive an additional 10% off on the items the customer purchased. It
works by sending friends and family an email explaining the discounts and how to apply them. The A to Z guarantee program is ensuring the purchases are guaranteed when payment is received through the Amazon website or through third party seller websites. It is guaranteed
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