Amazon Success Story

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INTRODUCTION
E- commerce in the past decade has emerged as a growing platform for selling and buying of products and services on the Internet. During times of financial crunch throughout the world recently there was an immense effect on the growth and success of the electronic alternatives like Amazon (Solomon et al, 4th ed, Consumer Behavior: A European Perspective pp.73-74). Therefore, in this report I consider the leader in e-retailing Amazon.com, Inc. (Amazon.com). So if for example Amazon’s 66 million customers lived in the same country, then it would have been the 19th largest country in the world in terms of population, with more citizens than every European country except Germany (http://www.wikinvest.com/stock/Amazon.com_(AMZN)). The company started its expansion in the 90s to offer the "Earth's Biggest Selection" of books, apparel, electronics products and home improvement products through its online website, www.amazon.com to consumers, sellers as well as developers (http://www.referenceforbusiness.com/history2/35/Amazon-com-Inc.html). Amazon also operates through various international websites. The company’s main operation is in North America. Its current headquarters are in Seattle, Washington and employs approximately 24 000 people (Datamonitor). Amazon.com was one of the pioneers in manufacturing and selling of device specialized at reading e-books and documents also known as the Kindle e-reader. The company also provides developers with access to technology infrastructure that can be helpful for the establishment of business. This is done through the Amazon Web Services. In addition, the Company has co-branded credit card agreements and utilizes variety of promotional strategies such as e-advertising, that consistently brings revenue back. The North America and International organization of operations are the main structure for the online retailer . According to Thomson Reuters in February 2010, Amazon acquired Touchco, a touch screen technology company (REUTERS Amazon.com report October 2010). From a report by Reuters it can clearly be noted that for the six months ended June 2010, Amazon.com, Inc.'s revenues increased to with about 40% to $13.7 billion. Net income also increased with approximately 60% to $505 million. North American division sales are shown to increase in revenue due cut in prices for the customers and higher income from International division. Expenses in other operations and net show decrease due to net income of the company. Further, the report reflects increase in interest income and decrease in interest expenses (REUTERS). If we look back in the financial year ended December 2009, an increase was also seen of 27.9% over 2008. The operating profit of Amazon.com Inc. was $1,129 million in 2009, which is an increase of 34.1% over 2008. The net profit was $902 million in 2009, an approximate increase of 40% over 2008 (Datamonitor Amazon.com, Inc., Company Profile, 9 Apr 2010). What all this data imply is that however difficult it was for most companies due to the financial downfall, the Fortune 500 company had seen a steady increase in profits (income). We can further look three years back when the recession had just started and see not much of problem for the e-retailer. This is portrayed by the financial data available on Wikiinvest.com which lucidly explains the increase in net income to $476 million for the year 2007 compared to $190 million in 2006 (http://www.wikinvest.com/stock/Amazon.com_(AMZN)). Following from this, we can conclude that Amazon.com is not only immune to the recession but also grows in times when other companies and countries struggle to stay on the surface. Amazon seems to compete with various physical and electronic enterprises. One of these are the physical-world retailers, catalog retailers and retailers who have strong brand awareness, sales volume and also sell through the internet (e.g. Staples in the US). Other online e-commerce sites such as the...
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