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Amazon Essay

3811 words - 16 pages

Team Digby

Amazon Case Analysis Team Digby
Team Digby very well done! Your covered all the salient issues, and support your positions very Overall, well. Heath Ashford Marshall University MGT 699 Dr. Sollosy 10/12/2014 David Caldwell Guodong Huang Josh Keck Yuyun Zhou


Amazon Case Analysis

Executive Summary .....................................................................................................................2 Introduction ................................................................................................................................2 Key ...view middle of the document...

These threats must be answered in the near future in order for Amazon to continue its dominance in the online marketplace. We recommend that Amazon collaborate with local merchandizers in a Craigslist-inspired environment, alter its pricing model for Amazon Prime, scale down its free shipping promotions, and invest heavily in website development to leverage its existing strengths as an online retailer. Introduction Amazon is a large online marketplace that was started in 1994 by Jeff Bezos. Bezos’ goal was to create an online shopping market that would be the largest on the planet and named it Amazon in reference to the famous river. The   company’s financial objective is to achieve long term sustainable growth and profitability. Amazon is unique in that it sells their own items but also acts as a middle man for third party sellers on the website. Customers can take advantage of having fast accurate search results which facilitates a positive easy shopping experience. The Amazon way leaves customers feeling like they have had a personal online shopping experience that cannot be matched by competitors. Key Issues 1. Consumers are trending more toward local products and local marketplaces rather than participate in the global ecommerce marketplace. It is still unclear whether or not this is a long-term trend or a short-term fad but for now it means that more consumers are shopping locally rather than shopping at Amazon. 2. The increase in oil prices around the world has created soaring transportation costs for many businesses. Amazon is particularly affected by this because it spends almost $1billion in shipping expenses for online order fulfillment while only charging a fraction of that in customer shipping fees. Amazon needs to find a way to either lower these costs or generate more revenue to offset its losses. 3. Consumer data is becoming more and more valuable as computer processing becomes more powerful. Consumers trust Amazon to keep their information private and because


Amazon Case Analysis
Amazon collects a huge amount of information about its customers, it needs to be extremely vigilant in its data security. While collecting this information may give Amazon a competitive advantage over its less-informed competitors, it also makes the company a prime target for hackers trying to steal customer credit cards and other information, thereby increasing the costs Amazon incurs to collect and retain that data safely. Amazon needs to keep data protection as cost-efficient as possible while still maximizing the benefits it receives from data collection.

Analysis Strengths 1. Amazon has a diverse portfolio of revenue generating activities from business-to-consumer sales and Amazon Prime memberships to business-to-business affiliate marketing, strategic partnerships, and web services. Its diverse businesses provide the company with the ability to take on riskier new projects because any loss incurred will have a minimal impact on the...

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