Amazon.com

Amazon.com

Executive Summary

Amazon.com is the world's first online bookstore and is currently also the largest. Its success came from innovation in the way it carries out its business. Its innovation can be view from the fact that it was the first company that realized the potential of having an online presence and selling everything online. This method of business not only reduced costs but also increases the number of customers that can be reached. Apart from its innovative strategy, amazon.com also focused of delivering customers value for the money they pay. This is one of the main reasons for its success.

Executive Summaryii

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Introduction1

Advantages of Online Bookstores2

Strategy2

Innovation2

Customer Focused3

Expansion4

Low Investment5

Branding and Advertising5

Competition6

Global Dispersion7

Non-Market Issues of Amazon9

Conclusion9

References11

Introduction

Amazon.com was incorporated in 1994 and since then has become the world's leading online books retailer (Masable, n.d.). It opened its door in 1995 claiming itself to be the “Earth's biggest bookstore” and is widely known and is also the most common cited commercial website (Lewis, 2012).

During its initial years of operation, it witnessed a huge increase in sales as revenues increased from $147 million in 1997 to $610 million in 1998. This was a major success for the company as the number of its customers increased to around 8.4 million worldwide. Due to the quality of its services, customers continuously return; this is evident from the fact that 60% of its sales come from repeat customers. However, despite the growth, the company has had problems with its profitability (Li, 1999).

One reason for its success is that it offers its customers the best products available at competitive prices thus ensuring customer compelling value for them hence increasing sales. The use of the internet and technology took them to new heights as it enabled them to offer a few million titles that could be easily searched by customers and ordered while sitting at home and the product is then mailed to the customer. After becoming the world's leading book seller, it diversified into selling video's, CD's and other products. Apart from this, it also offers electronic greeting cards, and online actions. Right now it offers several million products ranging from books to digital cameras through an efficient and effective website interface.

Just as Wal-Mart brought a change to the retailing world, Amazon.com brought a change to the way things are sold on the internet because of which it is commonly known as the Wal-Mart of the internet. This paper looks into the factors that helped it grow international and the competition and other nonmarket issues that affect the company and industry.

Advantages of Online Bookstores

There are several advantages of online bookstores. These stores have a large database with books from different publishers. This helps customers to browse their book online and order the one they wish. Although this limits the customer's interaction with the physical book before the purchase, the recommendations and preview of the books are readily available which helps customers get a preview about it. It uses the existing concept of mail-order to save costs and provide the same ...