Key Problems/Issue of the Case
Jeffrey Bezos started Amazon in 1994, in Seattle, Washington, and launched Amazon.com in July 1995. Bezos chose Seattle as Amazon’s headquarters because of the lack of sales tax, technology cluster, and its proximity to the largest book wholesaler, Ingram. Amazon started out by selling books but later developed into an online retail department store, offering a large range of products. The company also served as a third-party marketplace where other individuals and businesses could sell their items. Amazon quickly expanded as the concept caught on, and people could compare prices and buy a variety of product offerings from a single website. Although this website was a success, Amazon faced several problems.
In …show more content…
As an online super power, Amazon has only generated $458.6 million in net income, which is only three percent of the entire gross profit. Amazon appears to be spreading itself too thin across too many different industries, which gives other companies the chance to take over potential market share that Amazon is unable to capitalize on. By constantly expanding its segments and purchasing other businesses, Amazon is sacrificing short-term profits for the potential of greater profits in the future that have yet to be realized.
Business-Level Strategy Amazon started as an online retailer that sold goods over the Internet. In 1994, the company started to sell books online and later expanded into many different industries, providing both products and services, developing Amazon as a multinational e-commerce company. In general, Amazon focuses on a long-term, sustainable development strategy. The company concentrates on diversifying products and services. Amazon’s business goal, to create value for customers by using technology and to establish a marketplace that offers the lowest costs, has been achieved through the company’s many acquisitions. These acquisitions have had significant roles in helping Amazon compete in rival market segments. The product strategy also supports the company’s positioning. Amazon aggressively entered many categories in the retail segment, including books, music, movies, toys, electronics, …show more content…
However, Amazon has expanded into so many different categories as a way to capture market share that none of the product offerings seem to be related. Although Amazon wanted to develop a long-term strategy, the company didn’t seem to have a clear focus on which categories where successful and which were losers. In early 2001, Amazon finally decided to drop unprofitable products as part of the “Get the Crap Out” strategy. In addition to cutting specific products, Amazon started focusing on how to make product lines
Jeffrey Bezos started Amazon in 1994, in Seattle, Washington, and launched Amazon.com in July 1995. Bezos chose Seattle as Amazon’s headquarters because of the lack of sales tax, technology cluster, and its proximity to the largest book wholesaler, Ingram. Amazon started out by selling books but later developed into an online retail department store, offering a large range of products. The company also served as a third-party marketplace where other individuals and businesses could sell their items. Amazon quickly expanded as the concept caught on, and people could compare prices and buy a variety of product offerings from a single website. Although this website was a success, Amazon faced several problems.
In …show more content…
As an online super power, Amazon has only generated $458.6 million in net income, which is only three percent of the entire gross profit. Amazon appears to be spreading itself too thin across too many different industries, which gives other companies the chance to take over potential market share that Amazon is unable to capitalize on. By constantly expanding its segments and purchasing other businesses, Amazon is sacrificing short-term profits for the potential of greater profits in the future that have yet to be realized.
Business-Level Strategy Amazon started as an online retailer that sold goods over the Internet. In 1994, the company started to sell books online and later expanded into many different industries, providing both products and services, developing Amazon as a multinational e-commerce company. In general, Amazon focuses on a long-term, sustainable development strategy. The company concentrates on diversifying products and services. Amazon’s business goal, to create value for customers by using technology and to establish a marketplace that offers the lowest costs, has been achieved through the company’s many acquisitions. These acquisitions have had significant roles in helping Amazon compete in rival market segments. The product strategy also supports the company’s positioning. Amazon aggressively entered many categories in the retail segment, including books, music, movies, toys, electronics, …show more content…
However, Amazon has expanded into so many different categories as a way to capture market share that none of the product offerings seem to be related. Although Amazon wanted to develop a long-term strategy, the company didn’t seem to have a clear focus on which categories where successful and which were losers. In early 2001, Amazon finally decided to drop unprofitable products as part of the “Get the Crap Out” strategy. In addition to cutting specific products, Amazon started focusing on how to make product lines