amazon business model essay

Amazon’s Business Model Essay

• To find inspiration for your paper and overcome writer’s block
• As a source of information (ensure proper referencing)
• As a template for you assignment

Introduction

Amazon.com encompasses a Fortune 500 multinational electronic commerce company situated in Seattle. It is identified as the world’s largest online retailer, established in 1994 and launched in 1995 by Jeff Bezos, under his regret minimization framework.

Its business is not only limited to America, but also spans United Kingdom, India, Germany, Canada, Spain, France, China and Japan (Amazon.com Inc 1). Though it is engaged in selling various products according to its diverse departments, it also ships the products that have been purchased from it to certain specified countries.

Initially, it was launched as an online bookstore, but later diversified into the sale of MP3 downloads, DVDs, CDs, video games, software, apparel, toys, furniture, food and electronics. Amazon’s issued its public offering of stock in 1997 at an $18.00 per share price under AMZN stock exchange symbol of NASDAQ.

In terms of its annual reports and Proxy Statements in 2011, it had a revenue of $ 48 billion, operation income of $862 million, net income of $631 million, total assets of $25.2 billion, total equity of $7.75 billion and 56,200 employees.

Benefits and limitations of the Amazon’s online Retail Model

As the most effective online retail model, Amazon.com utilizes the Affiliate Business Model. This model is utilized alongside the market mix of pricing, promotion, product and people, to enhance the company’s marketing capability.

The Affiliate Business model provides people customers with various purchasing prospects, regardless of the place they are surfing from. The Affiliate Business Model proffers many affiliated partner sites with various incentives.

These sites provide with the necessary points that link to the merchants while purchasing, with the aim of generating sales. Owing to the fact that it is a pay-for performance model, the non-generation of sales by the affiliates does not translate into costs for the merchant.

This online retail model is highly suited for the World Wide Web; hence, explaining its popularity. This popularity aids Amazon to generate a high volume of sales.

In terms of easy access, the website provides the customer with various categories of the products available that help the customer to easily search the product he or she needs from the department under which the product is listed.

The various departments of products displayed on the Amazon website ascertain that a variety of products are available to satisfy the diverse customer needs.

It reduces overhead expenses and ensures that the products are accessible to a larger demographic group. In terms of security and efficiency, payment is conducted in a discreet manner to ensure security and the products are delivered efficiently and within the deadline provided.

Limitations

In terms of shipping cost and shipping time, shipping the products does not only pose additional and expensive costs for the customer especially if the merchant is far from the customer, but it also inconveniences the customer because he or she cannot receive the product earlier than five days after the purchase.

Essentially, communication between the buyer and the merchant is difficult, as there are no communication options provided on the website. Inherently, due to the fact that the customer cannot physically view the product, a product of less quality can be delivered to him or her, culminating into mistrust and low customer satisfaction.

The manner in which Amazon.com changes the market for books

Initially, the company sold and shipped books to customers (Sampson 54). This was later advanced to the sale of digital e-books that could be downloaded or printed. This did not generate the required sales volumes culminating into the current introduction of Kindle, a portable e-book reader (The New York Times 1).

Kindle utilizes wireless connectivity to enhance downloading, shopping, browsing, and reading of magazines, newspapers, e-books, blogs and other types of digital media in various chosen countries.

Bezos asserted that in 2009. Electronic reader sales made up to 35% of the physical book sales. The popularity of this application has aided the company to change the market for books from sale and shipping of books, to e-reading and downloading of full books or pages from certain books at a fee.

How the Design of Amazon’s website facilitates user efforts to locate a particular product

A search button is situated at the top of the website to allow customers to either search a product from all the Amazon departments provided, or from a specific department. Essentially, on the left hand corner of the website, the departments and sub-departments are displayed to help the customer narrow down his or her search of the specific product they would like to purchase (Amazon.com Inc 1).

Additionally, each customer is accorded with a cart that can help in selecting the different number of products he or she is willing to purchase. The website’s middle part contains the Amazon’s most sold products to enable the customer have an idea of the products mostly preferred and purchased by other customers.

This might convince the customer to try such products. The website also utilizes collaborative filtering that recommends to the customer the other products that he or she would prefer given his or her choice of a certain product. All Amazon products have prices that enable customers to compare with such prices with the others offered in the market to facilitate high volumes of sales.

Collaborative filtering and how Amazon uses this technique to encourage sales

Collaborative filtering encompasses a common Web Technique utilized in generating personalized recommendation. This is done through filtering or making automatic predictions on a user’s interests through collaborating or the collection of tastes and preference information of other users (Ekstrand et al 4).

The main assumption utilized in the case of collaborative filtering is such that id a person B posses the same opinion as person C about an Issue X, then there is a high likelihood that Person B will take up Person C’s opinion on another issues Y as compared to him taking the Opinion Y of another random person.

The data collected on customer behaviors is utilized by Amazon to conduct collaborative filtering. In this way Amazon generates a list of personalized items a certain customer might be interested in depending on the purchases and interests of other customers that hold the same customer behaviors as his or hers. This encourages a higher volume of sales.

Selling used books alongside new versions as a reasonable business practice that does not undermine the market for new books.

Selling used books alongside new versions encompasses a reasonable business practice that does not undermine the market for new books, because it allows the economically weak customers to purchase needed books (Sampson 125).

Some people keep used books in places where they keep things that they will never use because they are not in need of them anymore. Allowing them to sell such books offers others with the opportunity to access needed books at a lower price.

Essentially, the money acquired from such sales can aid customers to purchase newer versions of the other books they needed, but could not afford. Additionally, some customers might be in need of various books, but they cannot afford to purchase all books due to the quoted prices of the newer versions.

According them with lower priced versions will enable them to purchase the newer versions of the books they are in dire need of and the used versions of the books they least need.

Works Cited

Amazon.com Inc. Amazon.com .1995. Web.

Ekstrand, Michael D, John Riedl, and Joseph Konstan. Collaborative Filtering Recommender Systems . Hanover, Mass: now Publishers, 2011. Print.

Sampson, Brent. Sell Your Book on Amazon: Top-secret Tips Guaranteed to Increase Sales for Print-on-Demand and Self-Publishing Writers . Denver: Outskirts Press, 2007. Print.

The New York Times. “Amazon.com Inc”. The New York Times 31 January 2012 late ed.: Al. Print.

• Amazon.com Inc.'s Transnational Strategy
• Amazon.com's Innovations for Competitive Advantage
• Amazon.com Inc.'s Mobile Technologies
• Strategic Report for Spotify
• Netflix Company's Strategies
• The 2020 Summer Olympics in Madrid
• Kodak Company's Management Strategies
• Circa Company's Marketing Strategy
• Chicago (A-D)
• Chicago (N-B)

IvyPanda. (2019, April 2). Amazon's Business Model. https://ivypanda.com/essays/amazons-business-model/

"Amazon's Business Model." IvyPanda , 2 Apr. 2019, ivypanda.com/essays/amazons-business-model/.

IvyPanda . (2019) 'Amazon's Business Model'. 2 April.

IvyPanda . 2019. "Amazon's Business Model." April 2, 2019. https://ivypanda.com/essays/amazons-business-model/.

1. IvyPanda . "Amazon's Business Model." April 2, 2019. https://ivypanda.com/essays/amazons-business-model/.

Bibliography

IvyPanda . "Amazon's Business Model." April 2, 2019. https://ivypanda.com/essays/amazons-business-model/.

Amazon: Business Model Analysis

Amazon is one of the world’s most extensive and expensive companies. In 2020, Forbes ranked it 4th in the list of the most valuable brands after Apple, Google, and Microsoft, with a valuation of $135.4 billion (Swant, n.d.). In one year, the company was able to double its performance. In 2021, Kantar Group placed Amazon first in the top 100 ratings, valuing the company at $254.2 billion (Barker, 2021). All this testifies to the excellent approach of top managers to their work.

Vision and Mission

Amazon views vision as the guide for the company’s development and cultivation of specific ideas. Its vision has two parts:

• The central ideology, which reflects the purpose and values of the company;
• An envisioned future that includes goals and objectives (Amazon, n.d.).

Amazon’s vision is “customer obsession rather than competitor focus, passion for invention, commitment to operational excellence, and long-term thinking” (Amazon, n.d., para. 1). This vision was written during the company’s founding and has guided Amazon to this day. Its mission statement emphasizes the lowest prices, best selection, and experience (Cuofano, 2022). The company wants to provide its customers with the maximum benefit in terms of price and variety of goods.

The reduced prices can be attained by a low operational cost. For this reason, the entire logistics process is essential to attain this goal. Second, Amazon offers a broad choice for all its clients (Cuofano, 2022). It is achieved by the company offering a wide range of products on its website. As a result, users want to use the company’s website when they shop online. Third, Amazon’s mission emphasizes that transactions and operations performed by the user must be convenient (Amazon, n.d.). Thus, comfort becomes an integral element of all services offered by the corporation. Amazon’s mission emphasizes three essential elements: low prices, the best selection, and maximum comfort.

It can be said that the mission and vision of the company are too idealized and challenging to implement in practice. They are formulated more from a marketing point of view than for actual implementation. In fact, low prices, high quality, and convenience might be hard to combine and require much effort (Sharma, 2021). Nevertheless, Amazon is still trying to offer the best prices, which allows it to have no branches and well-established supply chains.

SWOT Analysis

Amazon is growing faster than the rest of the U.S. e-commerce firms. The company manages to earn high profits from online sales. The success lies in the strategy of low prices, merchandising solid, and third-party sellers on the platform. Amazon has perfected its delivery network with the launch of Amazon Air (bulk carrier), Prime Now, and Amazon Logistics. Amazon uses about 200,000 Kiva robots to search, collect and distribute orders (Edwards, 2020). Robots significantly simplify work in difficult conditions and save time.

Amazon’s key competitors, Walmart, Barnes & Noble, eBay, Ne, and Oyster, challenge Amazon by copying the e-commerce business model. For example, in 2020, Walmart created a Walmart Plus subscription following Amazon Prime (which also offers users free shipping), while eBay is implementing a low-price strategy. Therefore, customers can easily choose another marketplace where prices are even lower. Despite the advantages, the company has the lowest margins in the e-commerce segment (Sharma, 2021). This is due to the high advertising costs, promotional products, and logistics. In the second quarter of 2021, Amazon announced online sales revenue of $53.2 billion, which is below the market forecast of $57 billion (Sharma, 2021). The fact that the company did not make a decent profit points to room for improvement.

Opportunities

Considering the company’s capabilities, it is worth saying that Amazon has a good chance of becoming a global monopolist. Almost twenty countries worldwide have their own Amazon marketplace, and the company provides delivery services in over 100 countries. A promising industry is a food, which is the second largest category in American retail. The numbers could rise due to lockdowns during the pandemic, and Amazon will have a great chance to capture a niche and increase its profits through online sales of food products and delivery.

Among the threats, the most significant is that third-party sellers are selling fake products on Amazon. The company is under pressure from the government, which demands responsibility for the damage caused by counterfeit goods (Bright et al., 2019). In 2020, a U.S. court ruled that Amazon was liable for personal injury and property damage from an explosion caused by a counterfeit battery purchased from the marketplace (Greene, 2020). In such a way, the deterioration of the company’s image might become one of the significant threats to the company in the future.

Warehouse workers often go on strike demanding health protection and higher pay for hazardous work. For example, in 2019, employees at an Amazon warehouse in the U.S. said they were fired in retaliation for protesting inadequate protection against COVID-19 (Business & Human Rights Resource Centre, 2020). In 2021, African-American Charlotte Newman, who worked at Amazon as a manager, filed a lawsuit against the company for sexual harassment by the director (Collins, 2021). All these facts indicate that Amazon should consider the best conditions for its employees.

5 Step Planning Process

The planning process consists of several phases critical for the desired outcome. The first stage is to set the foundation for the whole work. Since Amazon is already an established corporation, its development path is also provided. It can be recommended to improve recruitment strategy to enhance working conditions and avoid the threats described in SWOT.

The second stage should contribute to the development of the goals and objectives of the company. It is recommended to base these goals and objectives on SWOT analysis. For example, it is possible to eradicate low-quality products in the marketplace without increasing prices.

The third stage includes forming strategies to achieve the goals set earlier. To provide Amazon with only safe products, sellers must undergo specific product verification and testing by Amazon personnel. It can be recommended to work only with verified and trusted partners.

The fourth stage is the implementation of the strategy in the company. This phase is driven by strategic management and may require establishing a new business structure. The recommendation implies aligning the new strategy with the current issues to resolve them.

The fifth stage is to observe the work of the new strategy and correct unwanted deviations. It can be recommended to record changes as a way to control all alterations.

In conclusion, implementing a strategy to eliminate harmful products is possible. To do this, first of all, creating a unique body within the company will be necessary. Its responsibilities should include screening all new sellers who want to list an item on Amazon. This procedure will help to strengthen the image of the company significantly.

Amazon. (n.d.). Who we are . Web.

Barker, M. (2021). Amazon retains crown as world’s most valuable brand . MarketingWeek. Web.

Bright, D. Cortes, A. Hartmann. E. Parboteeah, K. Pierce, J. Reece, M. Shah, A. Terjesen, S. Weiss, J. White, M. Gardner, D. Lambert, J. Leduc, L. Leopold, J. Muldoon, J. and O’Rourke, J. (2019). Principles of management . Rice University.

Business & Human Rights Resource Centre. (2020). Amazon may have violated labor laws by firing worker involved in protest, New York attorney general says; incl. company response.   Web.

Collins, T. (2021). Black Amazon manager sues the tech giant, execs alleging discrimination and harassment. USA Today.  Web.

Cuofano, G. (2022). Amazon mission statement and vision statement in a nutshell. FourWeekMBA. Web.

Edwards, D. (2020). Amazon now has 200,000 robots working in its warehouses. Robotics and Automation. Web.

Greene, J. (2020). Burning laptops and flooded homes: Courts hold Amazon liable for faulty products. The Washington Post.  Web.

Swant, M. (n.d.). The world’s most valuable brands. Forbes.  Web.

Sharma, A. (2021). Amazon net profit doubles on strong online shopping . The National . Web.

Cite this paper

• Chicago (N-B)
• Chicago (A-D)

StudyCorgi. (2023, July 21). Amazon: Business Model Analysis. https://studycorgi.com/amazon-business-model-analysis/

"Amazon: Business Model Analysis." StudyCorgi , 21 July 2023, studycorgi.com/amazon-business-model-analysis/.

StudyCorgi . (2023) 'Amazon: Business Model Analysis'. 21 July.

1. StudyCorgi . "Amazon: Business Model Analysis." July 21, 2023. https://studycorgi.com/amazon-business-model-analysis/.

Bibliography

StudyCorgi . "Amazon: Business Model Analysis." July 21, 2023. https://studycorgi.com/amazon-business-model-analysis/.

StudyCorgi . 2023. "Amazon: Business Model Analysis." July 21, 2023. https://studycorgi.com/amazon-business-model-analysis/.

This paper, “Amazon: Business Model Analysis”, was written and voluntary submitted to our free essay database by a straight-A student. Please ensure you properly reference the paper if you're using it to write your assignment.

Before publication, the StudyCorgi editorial team proofread and checked the paper to make sure it meets the highest standards in terms of grammar, punctuation, style, fact accuracy, copyright issues, and inclusive language. Last updated: July 21, 2023 .

If you are the author of this paper and no longer wish to have it published on StudyCorgi, request the removal . Please use the “ Donate your paper ” form to submit an essay.

Amazon Business Model Analysis

Business model: Amazon is a company which is running subscription business that is why its key partners vary in this case Amazon key partners are logistic partners, self published and affiliates. In business which deals in subscription they target mass market for creating long relationship in the case of Amazon its create value for global consumer market, companies that need fulfillment and developers or companies. In which almost 1.3 million are active consumers, developer consumers use Amazon web service Amazon reach to its segment through websites and apps like Amazon .com, affiliates sites, application interface, built in data link . A key activity includes maintenance and software development, customer service , merchandising …show more content…

This includes sales margin, fees for fulfillment and value computing fees. This includes relationship each segment expects this includes customized profits and suggestions, self service application program interface and e-readers. REVENUE MODELS Purchasers can purchase goods or merchandise directly through third party by using Amazon .com for this it charges a commission rate .transaction fees and closing fees other than that it also generates revenue through affiliate revenue model in which website owners picks the product from Amazon and earn referral fees on the merchandize the fees is about 4 percent to 10 percent of the product price. The revenue model with respect to America is as follows: MARKET SEGMENTATION Amazon is the company which uses the demographic, psychographics information for predicting the future purchase intention of customers .it target its individual personally in order to built long term relationship with that of customers .other than that it target middle and upper class people who do not have time and prefer convenient sources of shopping Psychographics information includes: • Interest • Lifestyle • Socio economic …show more content…

Other than that company is offering a wide range of products at competitive price it is completely online base which reduces operation cost, allow their customers to compare the price in the precious time even they provide smart tools, free shipping opportunities to its customers. After wards it is handling its operations in this manner that it handles its customer relationship via websites different companies can sell its product through using Amazon and even it is offering different kinds of services including web design, solutions related to e-commerce

Amazon Big Data Case Study

They are the prominent general retail stores with a physical presence. Both of these retailers have emerged as e-commerce centric due to the early adoption of e-commerce strategies. However, even those retail chains proved to be of no use to generate a tight competition with Amazon. In the long run, the growth of the e-commerce versions of these supply chains can pose a threat to Amazon. (Wahba, Phil) Advantages for an Amazon Customer Amazon adds value for money for the customer.

Globalization Case Study: Amazon

Today, many people prefer to order products from Amazon instead of going to stores or malls. c. DESCRIPTION OF MY SUBJECT (AMAZON.COM): Amazon (Amazon.com) is the world’s largest online retailer and a prominent cloud services provider. The company was initially a book seller, then later it expanded to sell a wide variety of consumer goods and digital media as well as its own electronic devices, such as the Kindle e-book reader, Kindle Fire tablet and Fire TV, a streaming media adapter (Rouse, 2018).

Amazon Internal Environment Analysis

Many states within the United States have passed online shopping sales tax laws which have been designed to compel Amazon and other e-commerce retailers to collect both state and local sales taxes from their customers. In 2011, it was noted that Amazon only collected sales tax from five states, however in April of 2017, it was said that the company must collect sales tax from consumers in all states that currently have sales taxes. ANALYSIS OF STRATEGIC FACTORS In a December 2011 article written by Forbes contributor, Venkatesh Rao, he states that “the company [Amazon] is nothing if not deliberate and systematic in everything it does.” Rao goes on to say, unlike the other big companies that symbolize our times – Google, Apple, Facebook and Microsoft, Amazon did not rise to power by inventing a new product or service.

Diversification Strategy Of Amazon

Amazon has achieved many milestones from starting in the founder’s garage in 1994 to the growth in revenue to US$147.8 million in 1997 and then to the revenue growth of US$177.866 billion in 2017 (Amazon, 2018a, Amazon, 2018b and Jurevicius, 2018). These milestones were achieved through tenacious focused strategies of meeting their customers’ needs and wants. These strategies have maintained and expanded their customer base locally and internationally and have increased its market shares and profit over the last two decades. In addition, projection for the company’s growth and expansion for the next three to five years looks positive as it predicted to grow at the same rate with its expansion internationally and continued focused in satisfying consumers’ wants (Amazon, 2018a). Although, some factors such as governmental policies, legal issues and natural disasters could pose a threat to Amazon’s growth plans, the management team led by the founder and Chief Executive Officer (CEO) are working on mitigating the risk (Amazon, 2018a).

What Is Amazon Using The Competitive Forces And Value Chain Model

Analyze Amazon.com using the competitive forces and value chain models. How has it responded to pressures from its competitive environment? How does it provide value to its customers? a) Competitive forces analysis i) Entry of competitors It is easy for competitors to enter the market by establishing an e-shop and Amazon laid the groundwork for competitors (Flat World Business, n.d).

Case Study: Patrick Staehler Business Model

1. Introduction 1.1 Skinnydip London Background Started in 2010 by Lewis Blitz and the Gold brothers James and Richard, Skinnydip was there to challenge the dull and boring black, white and grey accessories that were the booming in the market. The trio wanted to brighten up the streets of London with their wide range of fashion forward headphones as well as iPhone, eBook and iPad cases. Skinnydip was a home run business for the first 6 month of it’s existance, thereafter the Skinnydip studio was set up in order to bring brightness to the streets and to begin on the road to satifsying the trio’s vision of merging fashion trends and technology accessories.

Amazon Cost Leadership Strategy Analysis

This situation in turn created a service differentiation for the company compared to its other competitors. First, the Amazon.com website has an attractive and customer-friendly interface. Fast and reliable delivery which allow the customers to receive their order within the same day in specific area has also been an incredible feature of the company. A no-nonsense returns policy is being implemented, too. To assist the customers in choosing their order, purchase suggestions based on their previous purchases and webpage viewing are given.

Risk Management Case Study: Amazon. Com

5 – Main risks going forward for Amazon.com are to loose its competitive advantage because of opportunities that Internet offered to its competitor : low prices, deliver, costumer’s service, etc. Moreover, if the business develops, it may encounter logistical problems and limits : geographical and logistical constraints (energy, delivery and connection and some contries) and legislative constraints (censorship, taxes and state agreement : Corea, Sri Lanka, Indonesia, etc). Founded in 1994, Amazon started as an online bookstore and quickly became popular as it received high marks on several Internet rankings. Today, Amazon.com, Inc. is the world's largest online retailing company headquartered in Seattle, WA

Amazon Customer Analysis

3.3 Customers and Competitors Customers Amazon customers consist of upper & middle class social groups who have inclination towards using E-commerce portals and are comfortable with online shopping. Majority of the customers are professionals or businessmen who are busy with their business/Job & find it convenient to purchase anything online rather than visiting the physical outlet in order to save time & money. Furthermore, the customers might also be the ones who are searching for deals.

Case Study Of Amazon's Competitive Strategy

Amazon’s competitive strategy is cost leadership. Amazon has achieved a lot on a great scale that it gets the best prices from its vendors so they can operate in very flexible and thin margins and sell their items easily at retail prices and make money. They also provide shipping products for a reasonable cheap price. They also have improved their warehouses by giving some space to other sellers who want to sell their items through Amazon. They differentiate and provide better quality than their competitors across the industry.

Value Chain Analysis: Walmart, Amazon, And Ebay

finishing goods, order handling, delivery, dispatch, invoicing; Sales & Marketing for example customer management, order taking, promotion, market research, sales analysis; Servicing for example warranty, maintenance, education and training. Support activities of Amazon include administrative and finance infrastructure; human resources management; product & technology development and procurement. This leads to less cost and more profit margins. The Walmart value chain is also almost the same except there are physical stores involved in between while Amazon has everything through online platform.

Environmental Influences An Organization Face

Amazon is a domination force that all other retailers have to compete with and they will only get better. When they began to dominate the market, some retailers followed suit and increase their online presence like Walmart and EBay. They even began to lower their prices to compete with Amazon. This resulted in several other retailers, who did not

Pizza Hut Supply Chain Analysis

Pizza Hut was established by Dan and Frank Carney in Wichita, Kansas, USA in the year 1958. Pizza Hut Inc. is one of the prevalent pizza companies worldwide. It was a subsidiary of Pepsi Co Inc. from the year 1977 – 1997. It is a wholly owned subsidiary of YUM! Brands since 1997 to present.

Flipkart Value Chain Analysis

• High investments in supply chain management. Currently Flipkart has strong delivery network across 27 cities. • Consumer insights for better demand forecasting. Constantly soliciting suggestions on new products to the customers. • Easy and fast payment system - 24*7 operations.

Case Study Uniqlo

UNIQLO, 66-year-old Fashion and Retail industry was established in 1949 in Japan. It is a wholly owned subsidy which was bought by Fast Retailing Co Ltd since November 2005.With its head quarters in Tokyo it has managed to expand its clothing business in fourteen countries globally. An article from the Business Insider says that this Japanese chain has become the envy of retailers worldwide. It started in 1949 in Hiroshima as “Unique Clothing Warehouse”. The words were later joined to make “UNIQLO”.

More about Amazon Business Model Analysis

Related topics.

• Electronic commerce
• Online shopping
• Customer service

The Genesis of Amazon: how Jeff Bezos Built an E-Commerce Empire

This essay is about the origins of Amazon and how Jeff Bezos built it into a global e-commerce powerhouse. In 1994, Bezos left his successful career at a Wall Street firm to explore the untapped potential of the internet, which was growing rapidly. He started Amazon from a garage, initially focusing on selling books due to their universal appeal and low inventory costs. Bezos’s customer-centric approach and innovative features, like customer reviews and personalized recommendations, quickly set Amazon apart. The company’s growth was exponential, leading to an IPO in 1997 and further expansion into diverse product lines and services like AWS. Bezos’s vision and relentless drive for innovation transformed Amazon from a small online bookstore into one of the world’s most influential companies.

How it works

In the early ’90s, Jeff Bezos was a successful senior vice president at D.E. Shaw, a prominent Wall Street firm. Despite his lucrative career, Bezos couldn’t ignore the massive potential he saw in the internet, which was growing at a mind-boggling rate of 2,300% per year. This statistic wasn’t just a number to Bezos—it was a call to action. He realized that the internet could fundamentally change how people shopped and consumed information. So, in 1994, Bezos made a bold decision: he left his stable job to dive into the uncharted waters of e-commerce.

Bezos’s leap into the world of online retail wasn’t haphazard. He meticulously created a list of 20 products that he thought could be sold online. After careful consideration, he zeroed in on books. Books had a universal appeal, a vast selection, and relatively low inventory costs, making them the perfect starting point. That July, he incorporated his new company in Washington State under the name “Cadabra.” However, he quickly changed it to “Amazon,” inspired by the vast Amazon River, reflecting his grand vision for the business.

Starting Amazon from a garage in Bellevue, Washington, Bezos and his small team worked tirelessly to bring his vision to life. They focused on creating a user-friendly website and compiling an extensive database of book titles. By July 1995, Amazon.com went live, branding itself as “Earth’s biggest bookstore.” The launch was quiet, but the response was anything but. Within a month, Amazon had sold books in all 50 states and 45 countries, surpassing even Bezos’s wildest expectations.

The early days of Amazon were all about relentless innovation and a deep commitment to customer satisfaction. Bezos was determined to make Amazon not just an online store, but a customer-centric technology company. He introduced features that were revolutionary at the time, such as customer reviews and personalized recommendations. This customer-first approach quickly paid off, and by September 1995, Amazon’s revenue was growing at a staggering rate, reaching $20,000 per week.

Bezos’s vision for Amazon extended far beyond selling books. He saw the company as a tech-driven platform that could offer a superior customer experience. This vision led to continuous reinvestment in Amazon’s infrastructure and technology. Soon, Amazon expanded its product line to include music, electronics, and much more, setting new standards for online retail.

The company’s initial public offering (IPO) in 1997 was a significant milestone. It provided the capital needed for further expansion and innovation. Despite skepticism from some quarters about the long-term viability of an online retailer, Bezos’s unwavering focus on growth and customer satisfaction proved them wrong. Amazon diversified into various sectors, including cloud computing with Amazon Web Services (AWS), which has become a significant revenue driver for the company.

Amazon’s growth story is also about relentless innovation. Bezos’s philosophy of constant improvement and experimentation has kept Amazon at the forefront of technology and retail. From introducing the Kindle e-reader to developing drone delivery systems and pioneering artificial intelligence, Amazon has consistently pushed the boundaries of what’s possible.

Amazon is a major player in the world now, but it all began with Jeff Bezos’s innovative ideas. His vision of the internet’s potential, coupled with an unwavering commitment to innovation and customer satisfaction, set the groundwork for what Amazon is today. Bezos’s transformation from Wall Street executive to the man behind one of the most powerful businesses in the world is proof of the strength of fortitude and vision.

Jeff Bezos’s decision to start Amazon in 1994 was a pivotal moment in the history of e-commerce. It wasn’t just the creation of an online bookstore; it marked the beginning of a technological revolution that has transformed how we shop, read, and interact with the world. Amazon’s success story is a powerful reminder of the impact of visionary leadership and the endless possibilities of the internet age.

Cite this page

The Genesis of Amazon: How Jeff Bezos Built an E-Commerce Empire. (2024, Jun 01). Retrieved from https://papersowl.com/examples/the-genesis-of-amazon-how-jeff-bezos-built-an-e-commerce-empire/

"The Genesis of Amazon: How Jeff Bezos Built an E-Commerce Empire." PapersOwl.com , 1 Jun 2024, https://papersowl.com/examples/the-genesis-of-amazon-how-jeff-bezos-built-an-e-commerce-empire/

PapersOwl.com. (2024). The Genesis of Amazon: How Jeff Bezos Built an E-Commerce Empire . [Online]. Available at: https://papersowl.com/examples/the-genesis-of-amazon-how-jeff-bezos-built-an-e-commerce-empire/ [Accessed: 2 Jun. 2024]

"The Genesis of Amazon: How Jeff Bezos Built an E-Commerce Empire." PapersOwl.com, Jun 01, 2024. Accessed June 2, 2024. https://papersowl.com/examples/the-genesis-of-amazon-how-jeff-bezos-built-an-e-commerce-empire/

"The Genesis of Amazon: How Jeff Bezos Built an E-Commerce Empire," PapersOwl.com , 01-Jun-2024. [Online]. Available: https://papersowl.com/examples/the-genesis-of-amazon-how-jeff-bezos-built-an-e-commerce-empire/. [Accessed: 2-Jun-2024]

PapersOwl.com. (2024). The Genesis of Amazon: How Jeff Bezos Built an E-Commerce Empire . [Online]. Available at: https://papersowl.com/examples/the-genesis-of-amazon-how-jeff-bezos-built-an-e-commerce-empire/ [Accessed: 2-Jun-2024]

Don't let plagiarism ruin your grade

Hire a writer to get a unique paper crafted to your needs.

Our writers will help you fix any mistakes and get an A+!

Please check your inbox.

You can order an original essay written according to your instructions.

Trusted by over 1 million students worldwide

1. Tell Us Your Requirements

2. Pick your perfect writer

3. Get Your Paper and Pay

Hi! I'm Amy, your personal assistant!

Don't know where to start? Give me your paper requirements and I connect you to an academic expert.

short deadlines

100% Plagiarism-Free

Certified writers

What Is Amazon's Business Model

Show More Amazon is the world 's largest online retailer. The company offers a wide range of products and services through its websites which sell more than 40 categories of goods such as books, electronics, jewelry, and fashion clothes. The products include merchandise and products the company purchases for resale from other manufactures and other third-party sellers. Throughout a variety of categories, Amazon not only sell its own products and other third party products, it also manufactures electronic devices such as televisions, tablets, e-book readers and phones. The company is also an eCommerce and Internet technology platform where people are able to buy and sell their products and take orders by going through the company’s websites and the seller’s …show more content… The first one is online retailing . Amazon has the world’s largest selection of goods for customers to choose from. They sell those products with the lowest price and make the smallest profit (Noren 2013). Their main goal is to satisfy the customer. The company is known to be an online bookstore at the very beginning. As time passes, Amazon started to sell pre-owned products on their websites because of the rising star, eBay. Unlike Amazon, eBay doesn’t have to have their product stocked in their inventory because the business is operated directly from customer to customer which means the seller is responsible for shipping the product to the buyer’s address. eBay is currently the biggest competitor of Amazon. The second business model is Internet service. Unlike other internet services, Amazon’s internet service is directly related to its retail business and the Kindle ecosystem which is the third business model of the company. In order to provide the best service to customers, Amazon has come up with a service called “Amazon Prime” which allows buyers to get the product within one or two business days. The company also has another internet service called Amazon Web Service which shows how the company has grown to be the number one in online retailing …show more content… In order to understand the reason why Amazon has not been profitable since the initial public offering in 1997, it is really important to distinguish it from other unprofitable companies (Anders 2012). Amazon is not a business with no revenue nor small amount of revenue. People can simply go to its websites, find whatever good they wish to purchase and the price is right next to the product. If they wish to purchase the product, they can provide their credit card information and get charged or find another product. As the “Prophet of No Profit”, Bezos said “Amazon isn’t a charity; it’s a business—a business whose strategy is to make its customers as happy as possible” (Yglesias 2014). Even though the business is lacking profitability, however the investors are continuing have their money invested in the company. This is the reason why Amazon is different than any other business. It is because the business has their priority set to pleasure the customer and continue to expand the business, despite the lack of profit within the business. This is what makes the business great. In the long run, I believe Amazon will be able to balance innovation and expansion with profitability because of the high exponential growth of internet usage and the popularity of online

Related Documents

How did jeff bezos influence amazon.

Jeff thought it would be a good idea to start Amazon; it helped people get things faster and cheaper while he is still making a profit. Jeff’s idea wasn’t based on profit, but rather the satisfaction of his customers’. The reason Bezos started the idea of amazon is because his love of technology and interaction with…

Barnes And Noble Case Study

The article, “Barnes & Noble has been destroyed by Amazon” discusses how Barnes and Noble has been losing money over the past few years and the role that Amazon has played in its difficulties. Barnes and Noble’s sales have recently fallen again while its long term debt has tripled over the past year. Along with all of this, shares in the company have plummeted dramatically. It has struggled to keep up with Amazon, as its Nook e-reader, has not been successful and its online sales have dropped. In addition Barnes and Noble has had four different CEOs in five years which has made the company even more shaky and less likely to be able to recover.…

INFO 290: Final Exam

Explain the term ”e-commerce” and discuss in detail the two major e-commerce business models (B2B & B2C) with examples Electronic commerce or e-commerce is when businesses are involved with the transfer of information by using the Internet. E-commerce is involved in consumer based retail sites, auctions, and business exchanges trading goods and services between corporations. Ecommerce permits users to electronically exchange goods and services without limitations of time or distance. E-commerce has two types of transactions: Business to consumers, and Business to business. Business to consumers (B2C) electronic commerce is used when a transaction or purchase has been conducted over the Internet between a business and a consumer.…

Kohl's Essay

One of the corporations that has developed into a powerhouse has been Amazon. The eCommerce network has developed a plethora of demands that Amazon has connected with customers. The ability of being able to shop online in the comfort of customer choice has defined way things are…

Swot Analysis For Nordstrom

Nordstrom’s Background Nordstrom was founded in 1901 as only a shoe retail store in Seattle. Today, Nordstrom is the leading fashion specialty retail market. They are located in 30 states across the nation with most of them positioned on the east and west coast of the United States. Nordstrom also has expanded into other channels of retail. Their variety of retail stores include 116 brick-and-mortar stores, an on-line store, and 105 off-price “Nordstrom Rack” stores.…

Walmart's Next Move Case Study

Case Analysis: Walmart’s Next Move Online Channels vs. Brick-and-Mortar Smart phones and computers are widely ubiquitous and user friendly. The convenience and appeal is now motivating consumers to shop online more frequently. According to Kotler, and Keller “apparel and accessories, consumer electronics, and computer hardware are the three fastest-growing categories” (p. 498). All of these items are found in Walmart brick-and-mortar stores. The decision to adapt towards e-commerce became clear when the world’s largest retailer experienced a decline in growth.…

Amazon Is A 21st Century Deal With The Devil Analysis

Throughout article, “Amazon.com Is a 21st Century Deal with the Devil,” by Amy Koss states that Amazon.com is just something that the devil made to win the souls of people. I believe her because many stores are going out of business because of Amazon. This means that people who worked there at the time have to find a new job because they can’t make money anymore. The reason for this is because instead of people going to the store to get what they need, they just hop on Amazon and try to find what they are looking for.…

Business Analysis Of Ebay

Consider eBay as a company along the value chain. What is their value add within the value chain to a consumer? What about their affiliates? eBay offers their customers a platform to sell and buy goods.…

Who Is Walmart Bigger Than Amazon?

What can you take away from this comparison? Delve deeper and analyze what the numbers mean. Amazon.com, Inc. has a higher gross profit margin percentage than Wal-Mart Stores, Inc. which means a higher percentage of revenue contributes to gross profit. Wal-Mart Stores, Inc. has a higher return on assets than Amazon.com, Inc. which means they generate a higher return on its assets than Amazon.com, Inc. Furthermore, Wal-Mart Stores, Inc. has higher number of employees which is mostly due to having physical stores and Amazon.com, Inc. being an electronic retailer.…

Amazon Social Responsibility Case Study

The tech giant is the largest Internet retailer in the world as measured by revenue and market capitalization, and second largest after Alibaba Group in terms of total sales. Amazon is, in many ways, a great company, but the company is in fact falling far behind in their intended corporate social responsibility practices. For several years now, Amazon has been criticized for many of their practices, and has even been deemed the “corporate scrooge” for their insufficiencies when it comes to community involvement (Cook, 2012). In a 2012 report, the UK Guardian pointed out many of the flaws in Amazon’s CSR strategy. According to the author “Amazon has made little or no effort to measure, disclose or improve its performance when it comes to the environment, workplace issues, diversity, charitable giving or political activity” (Gunther, December 20th, 2012).…

Amazon's Mission Statement In The Amazon Company: Jeff Bezos

• 5 Works Cited

Retrieved from http://www.smartinsights.com/digital-marketing-strategy/online-business-revenue-models/amazon-case-study/ Eule, A. (2013). It’s time for Amazon to open its black box. Barron’s, 93(42), 37. Forsyth, W.R. (2013). Citizen Bezos? Barron’s, 93(32), 7-8.…

Amazon Research Paper

Has big data improved amazon as a company Introduction This research paper will focus on answering the question “ Has big data improved amazon as a company?” The objectives of this assignment is to examine why the timeline of amazon is relevant to big data. An additional objective is to explore whether amazon have met the needs of its customers through e-commerce and whether the technology in place can be deemed beneficial to the company. An additional objective is to determine if any ethical or security issues are involved.…

Amazon Generic Strategy Essay

With its own fleet of cargo jets, delivery trucks and others, Amazon can offer its prime members same-day delivery. However, by insourcing its fulfilment and distribution, it is actually incurring a very high expense which directly contribute towards its low profitability. Besides, Amazon also have another competitive advantage over its rivals in that it is practically a company which has everything linked up together. In other words, Amazon produces and sell a wide range of products ranging from e-books to fashion and apparel, Amazon (Echo) Alexa, music, video-on-demand and most importantly, the Kindle.…

Analyze Walmart And Amazon, Using The Competitive Forces And Value Chain Case Study

• Amazon uses Low-cost leadership strategy by providing lower price than other online retailer. • Amazon also uses supplier intimacy strategy and strengthen customer, to attract new customers and keep existing customer happy. • Its shipping price is less than Walmart which is around…

Wal-Mart Value Chain And Competitive Forces Essay

1. Analyze each of these companies using the value chain and competitive forces models The companies had applied changes in their value chains by using the had made their Porter’s Model most commonly in the field of the superiority and performance model and such thing had been done by creating and maintaining their relevant superior performance. They mainly considered the inbound activities like receiving goods from other vendors and shifting them to their customers and apply them in their operations by making their role restricted to manufacturing and assembling the product and when it comes to marketing and sales they tend to involve customer needs first and apply the after sale service. Their competitive advantage is mainly linked to the a single platform with multi technical innovation and here we can state that the same is followed by Amazon’s main competitor Ebay where the only difference is that ebay considers differentiation in its products and this made it is distinguished in some areas more than amazon.com and that had made a remarkable difference in making payment easier and both amazon and ebay work 24 hours which is something not applicable before for Wal-mart which has came online recently.…

Related Topics

• Online shopping
• Electronic commerce

Ready To Get Started?

• Create Flashcards
• Mobile apps
•   Facebook
•   Twitter
• Cookie Settings

ESSAY SAUCE

FOR STUDENTS : ALL THE INGREDIENTS OF A GOOD ESSAY

Essay: Amazon’s business model

Essay details and download:.

• Subject area(s): Business essays
• Reading time: 6 minutes
• Price: Free download
• Published: 15 November 2017*
• File format: Text
• Words: 1,496 (approx)
• Number of pages: 6 (approx)
• Tags: Amazon essays

Text preview of this essay:

This page of the essay has 1,496 words. Download the full version above.

Amazon’s business model is to sell products through its online customer facing website to customers across the world. Amazon does this by selling items from its own inventory as well as those from third party seller’s. Apart from this Amazon offers services such as “compute, storage, and database offerings, fulfilment, publishing, certain digital content subscriptions, advertising, and co-branded credit cards.” (Amazon.com 10-K filing, 2017). In addition to this Amazon also manufactures and sells self-branded electronic products and accessories through its website.

Financial Highlights

Amazon’s focus, from inception has been on long term growth and has worked towards this by increasing operating income and managing working capital and cash capital expenditures efficiently. According to their annual 10-K filing they have done these by increasing sales of products and services, while managing operating costs, to achieve overall increasing operating income. Amazon also partially offsets operating costs by investing heavily in long term strategic plans aimed at improving efficiency overall.

Increase in sales is primarily driven by providing a far superior customer experience by offering a wide and increasing variety of lower priced goods, maintaining high availability, quick delivery times, improving reliability, and aiming to increase customer trust.

Amazon also works to reduce variable costs per unit – such as payment processing, transaction costs, picking, packing, customer service costs and marketing costs. Amazon also works to ensure that fixed expenditures are efficiently used, and their fixed costs include costs of building and running technology infrastructure; to build, enhance, and websites and web services, electronic devices, and digital offerings; and to build and optimize fulfilment centres. While variable costs vary with sales volume, fixed costs are dependent on strategic initiatives such as geographic or category expansion, capacity requirements etc. and are minimized by improving process efficiencies and maintaining a lean culture (Amazon.com 10-K filing, 2017).

Peers and competition

Amazon as a global e-retailer, is virtually unchallenged as no one has been able to replicate the success of its business model. However, Amazon operates broadly in 3 segments – media (Prime Music and Video), electronics (Fire line of products and Alexa speakers), and other merchandise. To compare its business model peers, a company of comparable market share in each of these segments has been chosen – Netflix, Inc., Alphabet Inc., and Alibaba Inc.

Netlfix Inc.

Netflix is primarily a competitor in the video streaming segment competing directly with Amazon Video and Prime Video. Netflix is a producer and distributor or original and licensed content. Its major costs are those associated with geographical licensing rights and those associated with their acquisition. Its income comes from membership fees that it charges its customers through three plans – basic, standard, premium. (Netflix Inc. 10-K filing, 2017)

Amazon’s content streaming business follows a similar model while also offering music in addition to video, with similar costs and revenues but there is one important distinction – Amazon bundles access to some of its streaming content with its Prime membership and sells and rents digital copies of other content outside of its Prime catalogue. Its income is derived from both, Prime membership as well as revenue from selling and renting digital content.

Alphabet Inc.

Alphabet is the holding company under which Google, Nest, Waymo and many other companies operate. Amazon competes against Google in many strategic areas however this report will specifically look at how Google and Amazon compete in the manufacture and sale of electronic devices. Google and Amazon both manufacture smartphones (Fire/Pixel phones), tablets (Fire/Google Nexus) and direct television viewing software and hardware (Fire TV and Google Chromecast). Googles revenues from these products come from the sales of the devices as well as a percentage from the sales of content available for these devices on its online app and media store Google Play Store.

Alibaba Inc.

Alibaba works in a space similar to Amazon, in that its major business is through its e-commerce platform, Alibaba started out serving enterprise customers in 1999 before launching a consumer focused platform Taobao in 2003. Both platforms primarily serve customers in the SEA region, unlike Amazon which is expanding globally. Alibaba however, has stake in numerous businesses around the world and is an active player in the global business scenario as well. It recently acquired and renamed to Altaba all parts of Yahoo Inc. which were not bought over by Verizon. Alibaba’s IPO in 2014 was the largest US IPO ever (Barreto and Thomas, 2013).

Figure 1: Amazon

Figure 2: Alibaba

Figure 3: Netflix

Figure 4: Google

As we can see from the graphs above the stock prices for each of the 4 companies have grown over the period of 5 years. The two companies here with the highest market cap – Amazon ($462.68B) (Yahoo Finance, 2017) and Google($600B) (Pullen, 2017) also have the highest stock prices of $968 and $929. Alibaba ($356.39B) (Yahoo Finance, 2017) is not too far behind in its market capita while its stock price is around $140.90, however Alibaba has been a public company for a lot less time and the graph above seems to indicate a sharp rise in its stock price. Netflix on the other hand has a market cap almost 1/5 that of Alibaba at $64.4B (Yahoo Finance, 2017) whereas its stock price is slightly higher at $149.

Financial Statement and Ratios Analysis

ROE and ROC

We see that except for a dip in 2014 end, Amazon’s ROE has seen an upward growth trend. This means in 2016 for every $1 invested in Amazon, Amazon could earn 14 cents compared to losing 2 cents in 2014. 2017 data is only up to date to march, so it has been ignored in all ratio calculations.

Like ROE, ROC follows an upwards trend. This indicates that Amazon can efficiently manage its funds to generate income, likely by increasing process and management efficiency as mentioned in item 7 of their 10-K filing.

We see a similar upwards trend in ROA as well, Amazon can efficiently manage its assets to generate earnings. Again, 2017 data has been ignored.

EBITDA Margin and Profit Margin

While EBITDA Margin is not regulated by GAAP, it nevertheless an important metric to analyse when studying the growth of a firm. We see that Amazon’s EBITDA margin follows an upward trend, this indicates that Amazon’s operating expenses have been increasing much slower than their revenues. This indicates better efficiency but also higher profitability.

Which leads us to the last chart, for the profit margin.

As the EBITDA Margin graph indicated, Amazon’s profitability has been increasing over the past 5 years which can be seen in the profit margin chart above.

Overall, the financial statements indicate an efficiently run company on a growth trend with increasing profitability.

Relative Valuation Analysis

Using financial and comparative data from S&P capitalIQ, Amazon was valued using Enterprise Value. The industry average TEV/EBITDA multiple was found out using the following competitors and peers in the tech industry – Alphabet, Expedia, Facebook, eBay , Twitter, Netflix, TripAdvisor, Altaba, Zillow group to get a value of 58x.

TEV = Market Capitalization + Interest Bearing Debt + Preferred Stock – Excess Cash

The high industry average TEV/EBITDA multiple seems extremely high compared to other industries and this is because the market caps in the tech industry, especially the large cap companies that have been used here, are generally high while excess cash is low.

With the industry average TEV multiple, Amazon’s EBITDA, and a figure of 477,170,618 for the number of common stock shares outstanding from Amazon’s latest 10-K filing, Amazon’s implied share price was calculated to be $1484.53. Given that Amazon’s current share price is $968 (Yahoo Finance, 2017) this calculation seems to suggest that Amazon’s shares are undervalued by almost a third, however, it’s possible that if a true industry EV average was calculated this gap may change.

The reason behind using TEV and not P/E ratio is that since the P/E ratio only depends on market cap and profits public equity companies may look expensive without looking at each company’s financials and capital structures separately. However, it is never sufficient to look at just one metric to take such a call and since all the firms are large cap and in the same industry a high-level analysis of PE ratios of some of Amazon’s competitors is also presented here using data from Nasdaq’s website.

We can see from the higher values of Amazon and Netflix that investors are willing to pay more for their shares, this is most likely due to expectations of growth from both companies. Netflix is currently in the middle of a global expansion, in 2016 expanding to SEA regions (Netflix Media Center, 2015). Apart from this Netflix is also expanding its content offerings, a particularly in non-US markets (Dynamiclanguage.com, 2017). Similarly, amazon is also in the throes of an expansion, not only into new regions to serve customers but also in the depth of its product offering in existing markets. Therefore, investors’ expectations of growth are not misplaced and this is reflected in the P/E Ratio.

Amazon’s stock price could be undervalued, given the expectations of future growth and fine management.

...(download the rest of the essay above)

Discover more:

• Amazon essays

Recommended for you

• Amazon: A Successful Company Built on Darwinistic Organizational Culture
• Amazon Economic Environment (SWOT, PEST, price elasticity, supply & demand)
• Exploring How PSB, Netflix, Amazon and Illegal Streaming Changed TV Content: 60 Char. Max

About this essay:

If you use part of this page in your own work, you need to provide a citation, as follows:

Essay Sauce, Amazon’s business model . Available from:<https://www.essaysauce.com/business-essays/amazons-business-model/> [Accessed 02-06-24].

These Business essays have been submitted to us by students in order to help you with your studies.

* This essay may have been previously published on Essay.uk.com at an earlier date.

Essay Categories:

• Accounting essays
• Architecture essays
• Business essays
• Computer science essays
• Criminology essays
• Economics essays
• Education essays
• Engineering essays
• English language essays
• Environmental studies essays
• Essay examples
• Finance essays
• Geography essays
• Health essays
• History essays
• Hospitality and tourism essays
• Human rights essays
• Information technology essays
• International relations
• Leadership essays
• Linguistics essays
• Literature essays
• Management essays
• Marketing essays
• Mathematics essays
• Media essays
• Medicine essays
• Military essays
• Miscellaneous essays
• Music Essays
• Nursing essays
• Philosophy essays
• Photography and arts essays
• Politics essays
• Project management essays
• Psychology essays
• Religious studies and theology essays
• Sample essays
• Science essays
• Social work essays
• Sociology essays
• Sports essays
• Types of essay
• Zoology essays

We use cookies to enhance our website for you. Proceed if you agree to this policy or learn more about it.

• Essay Database >
• Essay Examples >
• Essays Topics >
• Essay on Amazon

Essay On Amazon's Business Model

Type of paper: Essay

Topic: Amazon , Business , Customers , Supply Chain , Network , System , Delivery , Logistics

Published: 02/20/2023

ORDER PAPER LIKE THIS

In this age of digitized business world, Amazon’s model that creates efficiency, especially dealing with consumers online, and the key to growing and sustaining profitable business operations is the speed of logistics and string distribution network. Amazon’s logistic and supply chain management model has been able create a loyal and satisfied list of consumers and end users. This intent of Amazon as an organization is to be able create an experience for the users when they shop online and the speed and efficiency of the logistics and supply chain is the most important feature in view of the fact that the Amazons distribution network spans 220 countries globally, and always delivers on time. Another unique feature is the pricing strategy that provides the consumers value, hence, making the experience of the end consumers both cost effective and timely in terms of delivery. Amazon’s payment services enable the consumers to pay on other websites such as Kickstarte, SmugMug, Gogo Inflight to name a few, thus providing consumers convenience.

Amazon have been able to position themselves as the leaders by having a system that is seamless in terms of taking into account all the stakeholders into consideration sequentially i.e. products to suppliers and distribution centers to its final destination i.e. customers. Amazon utilizes the technological innovations to its operational advantage and primarily focuses on an ongoing analysis of the shopping patterns and a healthy relationship with suppliers to maintain the competitive advantage. The network technology is utilized by Amazon to assist in forecasting the purchasing patterns effectively, that helps in sharing the information with vendors to effectively reduce the order waiting time and managing the inventory. At the Amazon warehouse the accuracy of the system with regards to the products being identified in the warehouse, sorted, packaged, taped and labeled, is amazingly accurate due to the telecommunication network being enabled. Small teams work to execute the process in a seamless manner and reduce defects effectively, while achieving the company’s goal of a green environment. The aforementioned helped in decreasing the defects of mishandled inventory by 4% from the earlier 12% and supplier support helps in the process improvement vastly by delivering 99% on global orders in the traditionally busiest festive period. Postal hubs, delivery infrastructure and carrier services are part and parcel of the Amazon’s logistic system of delivering on time. Amazon has 96 efficient fulfillment centers, being run through highly developed software that has been updated 280 times only in 2013. The main premise of the software is keep a check and balance of ordered inventory in the boxes as per requests; a truck fleet is at hand to deliver, besides, improving software and running a very smooth global customer centric web service. Sunday delivery in USA, bike couriers in India and China and aerial vehicles, are all work in progress, Amazon order delivery has improved immensely.

Every organization has a key operational mechanism that contributes to their success and in the case of Amazon, logistics system is the key and its effective operations help them save cost, in spite of this it is reported that only 40% of capacity is utilized by Amazon and with the launch of new products such as FireTv, Prime to name a few, that impacted the growth in online orders.

Conclusion:

Amazon as an established online retail giant, has been growing constantly, as evidenced from the 2014 3rd quarter sales increase of 20% that amounts to a massive $20.58 billion. The numbers reaffirm the steps taken as discussed earlier in supply chain and logistics to achieve new heights in sales and customer loyalty, besides; Amazon is not sitting on its laurels, as the launch of a mobile app to revolutionize cards payments, with Amazon leading the way forward in the industry.

Cite this page

Share with friends using:

Removal Request

Finished papers: 997

This paper is created by writer with

ID 262248915

If you want your paper to be:

Well-researched, fact-checked, and accurate

Original, fresh, based on current data

Eloquently written and immaculately formatted

275 words = 1 page double-spaced

Get your papers done by pros!

Other Pages

Example of is globalization ultimately positive negative or in between research paper, example of course work on what is socialism, report on tourism and hospitality sales and promotion, criminal justice policies and values course work examples, term paper on how did world war i exacerbate europes economic problems, research paper on pro euthanasia arguments, good example of course work on measuring and managing logistics performance, good example of baileys caf and free enterprise literature review, free when mistakes are accomplished essay sample, astronomy essay examples 2, adult educationname essays example, good essay on classical theories of knowledge, good comparative women rights activists stanton and truth essay example, sample essay on toolscorp india, good example of retirement benefits and the inequalities associated with it essay, free report on pills to replace sunscreen lotions that blocks uv rays, deployment plan for a voip solution at safaricom company research paper samples, example of music scenes and subcultures essay, good example of friedrich nietzsche morality as anti nature thesis, memorandum case study sample, free decision making course work example, example of essay on research of the event, ledeen essays, fatimid essays, lavine essays, toor essays, reactive attachment disorder essays, viktor essays, drug business essays, value chain analysis essays, suicide intervention essays, whistleblowing essays, wound healing essays, holtzman essays, antoinette essays, extinction of dinosaurs essays, models of communication essays, health insurance reports, training program reports, inferior reports, traffic control reports, bargaining reports, terrorist attack reports.

Password recovery email has been sent to [email protected]

Use your new password to log in

You are not register!

By clicking Register, you agree to our Terms of Service and that you have read our Privacy Policy .

Now you can download documents directly to your device!

Check your email! An email with your password has already been sent to you! Now you can download documents directly to your device.

or Use the QR code to Save this Paper to Your Phone

The sample is NOT original!

Short on a deadline?

Don't waste time. Get help with 11% off using code - GETWOWED

No, thanks! I'm fine with missing my deadline

Examples Of Business Model Of Amazon

BUSINESS MODEL: A business model describes the rationale of how an organization created, delivers, and captures value. It is an outline of the general details of the operations of the business. Business Model is a strategic plan that is used by a company while setting up in order to generate revenue by offering its services products. Every company has its own business models depending on the product and services it offers. The company either choses from the existing business models or invents its own business model to generate maximum profit. The company’s marketing and sales are designed based on the business model. This includes other determinants like pricing of the goods, choice of the sales channels, identifying …show more content…

As a business model is something that needs to be changed and adapted to the country the business is being spread into. So our conceptualization consistent with the theoretical development in Amit and Zott (2001), the business model can be credited as depicting the content, structure and governance of transactions designed to create value through the exploitation of business opportunities. And here by transaction we mean the content that refers to the goods or information that are being …show more content…

Along with direct sales, Amazon has also created a platform for retailers to sell, advertise on the website and ship their products directly and Amazon takes a cut for every purchase. Amazon follows a long tail retail model, so everything sold on the website is not stocked in the fulfillment centers. This strategy helps them to avoid maintenance of inventory for products with slow sales and it does not affect the profit. Amazon has also started selling used products through its seller marketplace. For Amazon Prime services, the company follows a subscription-based business model. Customers have a Prime account have to pay an annual fee use the

Analysis of Macy's Business Model

A business model is an important and integral part of the business a strategy of any firm whether big or small. The way a business model is developed determines and indicates the values, ethics and principles on the lines of which the business at large will be operating. It also indicates how the business is going to function and covers various internal and external dimensions of a business and the organization as a whole.

Amazon's Business Model: A Case Study

Amazon understood firsthand that the competitive advantage of a company originates immediately from how distinctive the organization's resources and competencies are. Amazon is able to both engage in production at a lower cost and generate a superior product at a standard cost. This is accomplished mostly via Amazon's strategy of having a wide variety of goods and competitive pricing. Customers know they can find basic products at slashed prices or high quality goods at standard prices and this is all achieved via the enormous range of products and product brands and types available on their massive marketplace. For example, the depiction displayed in the case study which shows how growth was related directly to: lower cost structure- lower prices customer experience traffic sellers -selection and convenience. While this is a grave oversimplification of the Amazon business model, it demonstrates how many aspects of the strategy reinforced one another.

Amazon Business Model

Amazon.com has successfully managed to make its customers to feel that anything they could possibly want could be found on their website. Additionally, its products are marketed at a competitive price. Another important factor is their speedy delivery with their usage of UPS and FedEx (United States) and Royal Mail (United Kingdom). The company also caters for people that prefer online shopping with extra services such as Amazon Prime - a service with a yearly payment, customers are eligible for free next day delivery. Even though Amazon.com is known to be an online seller of most things, it still excels in its original market of book selling. Evidence of such is

BUSI690 Rothaermel Ex 1 Essay

Strategy refers to an organization’s “overall efforts to gain and sustain competitive advantage” (Rothaermel, 2013, p. 9). An organization’s business model, on the other hand, “details the [organization’s] competitive tactics and initiatives”, which includes the steps necessary to put the organization’s strategy into action (Rothaermel, 2013, p. 11). The strategy is the theory of how the organization will make money, while the business model is the action necessary to achieve the theoretical strategy (Rothaermel, 2013).

Amazon : The Key Impact Of Globalization In The Amazon

Luckily for Amazon.com, this company is one the largest retail sellers in the online world. Amazon is a company with a single enterprise that has risen to the top of the Most Innovative Companies List. It has been increased to this fortitude due to this company’s innovative ideas and the ideas for growth for their consumers as well. As technology had changed, so did Amazon by offering Prime which was a membership that could be purchased to allow the consumer to acquire items faster and receive the products more quickly.

Analysis on Louis Vuitton Case Study

As the business model addresses “how the company makes money in this business”, Louis Vuitton’s business model in Japan can be simply explained as selling products through directly owned and controlled stores. A good business model can guarantee the success of business. LV’s business model in Japan successfully drove it to the world’s largest market by strictly following the principles and benefiting from the external environment.

NT1330 Week 1 Assignment 1

Business model entails many facets. To narrow down the meaning of business model, it refers to the way businesses intend to create products to sell and to generate revenue in a particular industry (Ovans, A., 2015). As business decided elements necessary to accomplish goal and objectives, they must consider many factor that influence business models. According to Band (2009a), people, process & strategy effect business models. People effects business models through skilled or unskilled employees, organizational structures and incentives. Studies found that user adoption is the top problem that organizations face when implementing CRM solutions. Lack of training and education compound implementation CRM solutions. Change in

Business Model Final 2

Business models have a huge impact on how an organizations operate. It is crucial that an organization chose a business model before inception in order to succeed. Basically, business models have become the new basis of competition, replacing product features and benefits as the playing field on which companies emerge as dominant or laggards (Plantes, 2013).

Examples Of Value Proposition Of Amazon

There are mainly 4 priorities of Amazon when they established their online venture. The four priorities are convenience, selection, price, and customer service. E-business gave the Amazon a major advantage i.e it opens for 24 hrs or anyone can buy anything 24hrs a day. Various functions such as reviews, e-mail notifications , product recommendations, etc are given by Amazon in their website. Wide range of products are also provided by Amazon. They have an inventory of millions of products at a time.

Essay about Business Strategy of Amazon

As discussed in the case study, the advertising and marketing strategy of Amazon have been focusing on how the products would gain interest from their target market and how they can be able to generate sales with their products. This is Amazon’s stronghold where it continues to yield strong sales revenue by leveraging off its excellent online shop in different locations, such as in UK and other country, strong brand name and excellent reputation among customers. Amazon has also been continuing to create affiliate websites to expand their business market among various consumers.

How Competitive Advantage And How Does It Manage A Company 's Business Model?

Management level uses the business model to establish the strategies for the company’s operation and thus create competitive advantage over the company’s rivals and make more profit.

Amazon.com Case Study Essay

• 6 Works Cited

Amazon’s core competencies are in its ability to effectively use and develop technology to drive site traffic and enhance the customer experience. Their distinctive use of website real estate coupled with their ability to leverage their brand and effectively use that leverage to deliver low prices and high quality products, makes them a leader in online retailing. Their partner brands and their ability to adapt and recognize deficiencies enable them to effectively cut out the middle man, or at the very least, partner with them.

Global Business Environment

A business model is a company’s perception and conception of how the set strategies that a company pursues

Article Review: Why Business Models Matter

As mentioned in the article, a good business model tells a good story. Effectively communicating an organization’s business model and strategy to all the members (employees) of the organization can enhance the company’s performance. By understanding where each individual stands and how they contribute to the value chain,

The Business Model Essay

However, this paper chooses this definition as theoretical perspective of analysis for this paper subject to the following modifications: A business model is overall framework and philosophy by which a company (intends or) creates value in the market place through enhancement of its own combination of raw or in-put materials to create products (tangible and intangible including services), product packaging and systematic distribution in order to generate some or the best possible profit.

Related Topics

• Strategic management
• Strategic business unit