Amazon's Five Forces Analysis Of The Business Model Of Amazon

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Company description
Amazon is a multinational corporation that started up as an online bookstore. Within a short time, it expanded and diversified its business which made Amazon become the leader of Internet based market. Amazon has both Business-to-Business (B2B) and Business-to-Customers (B2C) business models. Focusing on B2C model of Amazon, which is the online retailing platform, it is undoubtedly that Amazon is one of the most successful companies in the market. Amazon has a giant online retailing platform selling various types of goods including e-books, software, personal-care products, industrial supplies and etc.

Five Forces Analysis
Threat of New Entrants
It is believed that the threat of new entrants is low in the online retailing
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From the consumer perspective, they could change their buying habit whenever they want if they find that the origin platforms could no longer satisfy their needs since there are many other similar choices. In Amazon’s case, Amazon.com provide a more convenient and user-friendly online shopping platforms comparing to its competitors. Moreover, due to the help of economics-of-scale, Amazon is able to offer products at a lower cost. Thanks to it, high bargaining power of buyers could be avoided and maintained at a middle level unless Amazon’s service quality decreased or the price of products increased which make customers feel that there is no advantage using Amazon.com comparing to other …show more content…
The only and the most vital difference is that Amazon offers variety of products including Books, Digital Music, Toys, Clothing, Electronics and etc. Whatever customers want to purchase, Amazon offers them by allowing almost every party to joining and selling almost everything in the Amazon’s platform. Customers could purchase goods made by well-known brands or choose goods from small companies. Moreover, used goods are also available. Allowing every party to become sellers in Amazon.com increases the variety of goods and creates values for Amazon. Amazon.com will thus first appear in customers’ mind when they are considering online shopping. This help Amazon create competitive advantage over its

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