Amazon.com Situation Analysis
Jeffrey Bezos started Amazon.com in 1994, after recognizing that Internet usage was growing at a rate of 2,300 percent a year. Operating from a 400-square foot office in Seattle, Jeffrey launched Amazon.com on the Internet in July 1995. Amazon.com mission is to use the Internet to transform book buying into the fastest, easiest, and most enjoyable shopping experience possible. By the end of 1996, his firm was one of the most successful Web retailers, with revenues reaching $15.6 million. Almost overnight Amzon.com quickly became the world’s largest e-tail bookstore in the world. Amazon has continued to expand its customer base, and sales revenues have increased every year. The firm’s revenues increased from $15.7 million in 1996 to $2.76 billion in 2000 (Table 1). Today, Amazon.com is the place to find and discover anything you want to buy online. Amazon offers the Earth’s Biggest Selection of products to 29 million people in more than 160 countries across the world making them the leading online shopping site accessed via the World Wide Web.
Over past several years Amazon.com has grown and developed very rapidly. The key core processes that have lead to Amazon’s success are convenience, selection, service, and price. Convenience can best be described when Bill Gates stated that, “I buy all my books at Amazon.com because I’m busy and it’s convenient. They have a big selection, and they’ve been reliable.” With over 106 million adults purchasing books every quarter, Amazon has capitalized on the convenience of on-line ordering. The next key process for Amazon is selection. Amazon is able to offer the world’s largest selection because they are an e-tailer with virtual directories. Amazon only keeps recent publications in stock for quick order fill, but directly orders any other requested books from the publisher. This business practice allows Amazon to have low warehouse cost, and offer the largest selection of books at the same...
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