“AMAZON CAN BE ONE OF THE MOST SUCCESSFUL COMPANIES ALL OVER THE WORLD. RISKS ARE BIG, BUT PROFITABILITY CAN BE ALSO BIG” INTRODUCTION
Amazon.Com is a leading online retailer company, offering for sale different items such as books, music, DVDs, videos, toys, electronics, software, video games and home improvement products serving almost 22.5 million customers over 150 different countries. This company was founded in July 1995 by Jeff Bezos in the state of Washington USA. Jeff Bezos now 37 years old, received his BS in Electrical Engineering and Computer Science from Princeton University. His professional career started at Bankers Trust Company in 1988, where he became Vice President in February 1990. At the end of the same year he moved to D.E. Shaw & Co. a Wall Street investment firm, becoming Senior Vice President in 1992. In those early years for the Internet retail business, Mr. Bezos noticed an important opportunity on the online commerce. He made a list of possible products that could be sold on line, including books, magazines, music, among others and finally he decided to start selling books. The main reasons of his choice were because there are more books to sell than music titles and also because the book publishing industry is more accessible than the music industry, mainly controlled by half a dozen of big record companies. With a dream in hand he quitted his job in June 1994 and moved to the West, choosing Seattle as starting point because its proximity to a major book distributor, Ingram’s Warehouse in Oregon. This is how the company that took its name from the river with the biggest water flow of the world started in a garage downtown Seattle with four employees, to be the biggest flow of e-commerce book retail. PRODUCTS AND SERVICES
Amazon.com business is in some sense simpler than the usual book retailer firm. No investment in costly point of sales, small inventories, better client support, no long cues to pay or return books,… These are some of the advantages with respect to the “real world” commerce activities. In addition to this, customers can search at home a database of millions books, CD’s, DVDs, videos, software, video games, lawn products and even a pan for your kitchen. If you find the item you want, just add it to the shopping cart and then is needed to fill out an online form to specify the type of payment, shipment characteristics and even if it’s a gift, the type and color of wrapping paper. Also today it is possible to access used and collectible items through their zShops and Amazon Commerce Network (ACN) or going to Amazon Auctions or sothebys.amazon.com. The first of the products offered by Amazon.com were books, as we early noted, starting in July 1995. Then music and DVD/Video were added in 1998. In March 1999, they introduced Amazon.com Auctions including today sothebys.amazon.com and zShops. Other retailing businesses in development are electronics, toys, home improvement, software and video games (see Figure-1). This broader spectrum of products and services is related with the company goal of being the most customer-centric firm where customers can find and buy anything they may want on line. FIGURE-1: AMAZON.COM PRODUCT AND SERVICES LAUNCH DATE
INDUSTRY AND GROWTH POLICY OVERVIEW
Amazon.com is rated as a company in the Internet software and services industry into the technology sector. The most important competitors for Amazon.com are E-Bay (on-line auctions and retail sales), Barnes and Noble (books sales and other products) and CDnow (on-line music retailer). In general, financial results for the Internet Company’s sector are like Amazon’s with some exceptions . One of the main characteristics of this sector is that almost all companies show strong revenues and increasing losses. Since 1998, Amazon.com started an aggressive expansion policy sustained by the extraordinary amount of resources obtained from the huge market capitalization of the company....