Competitive Strategies Case Study

Amazon in 2006

Abstract:

Amazon.com Inc. (Amazon), a fortune 500 company and a leading on-line retailer, posted revenues of $ 8.4 billion in 2005. Amazon sustained its existence, despite the fact, that it was not making profits for almost a decade since its inception. It recorded profits for the first time in history of its existence in 2003.

since inception, it focused on building an online retail experience for the customers, which included greater selection, competitive pricing, convenience and sophisticated information search. It offered wide range of products covering 31 categories including apparel, toys and games, electronics, videos, kitchenware, sporting goods, jewelry and online auctions. It had become a platform offering a place to businesses and individuals to trade their products.

By 2006, it faced competition from an array of online retailers. The online commerce industry had unique players like Yahoo, Google and E-bay offering range of products overlapping each other. With increasing growth of e-commerce and competition in the on-line retail industry, would Amazon, be able to sustain its original thrust on research and development and technological innovations? Would it be able to sustain its no.1 position as an online retailer and also remain profitable?

Pedagogical Objectives:

• To understand the nature and structure of the online retail and commerce industry
• To discuss the unique business model adopted by Amazon
• To discuss the competitive growth strategies followed by Amazon
• To discuss the issues and challenges faced by Amazon
• To debate whether Amazon can sustain its leadership position in the industry.

Keywords : Innovation; Peripheral Vision; Growth Strategies; Competitive Advantage; Competitive Strategies Case Study; On-line retail industry; Business Model; Amazon; E-commerce; Diversification

Contents : 
Background Note
Growth Strategy
Business Model
Sourcing and Distribution
Turning Profitable
The E-commerce Ace
Competitive Landscape
Amazon Inc. Financials