Identify Amazon’s Primary Business and Business Strategy

Case Writing Assignment

Identify Amazon’s Primary Business and Business Strategy

Over the years, Amazon’s has expanded its primary business from “an online bookseller to a virtual retail supercenter selling products as diverse as books, toys, food, and electronics for which it is best known today.” People who use Amazon can find virtually anything at low prices. The primary business of Amazon derives directly from its mission statement “to be Earth’s most customer-centric company, where customers can find and discover anything they might want to buy online, and endeavors to offer its customers the lowest possible prices.” When Amazon was founded originally as an online bookstore, Bezos still had the same idea – to build a customer friendly, easy to navigate, large and diverse, low priced website. One can visit Amazon today and still feel those same business concepts.

Not only has Amazon expanded its business through to a multitude of products, but it has also expanded its business in other ways. Amazon has formed very successful alliances with companies like Toys R Us, Office Depot, Target, and many more. Amazon also generates a large amount of income by associates who pay to establish storefronts and a fee when sold through Amazon. Amazon SOA software services are a major source of its income as well, and this profit is rapidly growing. The Kindle has become one of Amazon’s best-selling products. Lastly, Amazon plans to continue to grow through their Cloud Drive, Cloud Player for Android, and Amazon Cloud Player for the Web.

It is clear that Amazon uses a Cost-Leadership strategy to achieve a competitive advantage. An example is when Amazon entered the DVD market in 1998. Amazon lowered DVD prices across the board by 30 – 80%. Founder Jeff Besos was believes “There are two kinds of companies: Those that work to try to charge more and those that work to charge less. We will be the second,” (Nielson, 2013).

Identify Amazon’s international strategy

Since Amazon is an online store, it is not specific to the United States. Amazon actually found significant revenue and profit increases by expanding its global presence. In this specific case, they list that Amazon chose to also locate themselves in the United Kingdom, Australia, New Zealand, India, and Germany. Since then, Amazon has also made a presence in Italy and the Spanish market. The biggest factor that limited Amazon in the first place, was the amount of books online offered in English – remember, Amazon started as a bookstore. Since it decided to widen its product range by expand globally, it has become one of the faster growing retailers.

Even oversees, Amazon’s strategy is to offer products at the lowest prices. One can see this with the grocery service they offer in Germany that aims to compete with retailers in every channel. Amazon also expanded its SOA software product and service development centers in England, Scotland, India, Germany, and France. This too increased the range of products and services Amazon sells.

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