Analysis of Amazon, 2004 to 2006

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1) Analyse each year from 2004 to 2006?

2004: The Year of Soaring Success

* Expansion of product range to sell items ranging from Herbal Remedies to outdoor equipment. * Net profit of $588 million.
* Acquired
* Launched integrating better search technologies and giving access to amazons established search capability. * ‘Search inside books’ where 120,000 books were scanned and indexed in every page making it one of the biggest databases. * Launch of two new categories Beauty and Jewellery , which concentration on low margin and high volume of sales. * Nurture a culture of innovation by introducing ‘two-pizza teams’. This helped in bringing bright ideas into the forefront. * Book sales overtook electronics for one weekend in 2004. * Changes with Amazons international operation, expansion and addition to existing line of business in UK, Germany, Japan and Canada CONS

* Technology Problems during rush hours which led to lost customers. * Subject to a number of litigious actions with Cartier and Toys r us,

2005: Heavy Investments squeeze profits

* Growing sales at 24%
* 4th quarter jewellery sales grew by over 100%
* Beauty store generated 25 million revenues in the 1st year * Estimated Online DVD sales market share of 90%
* Assortment of innovations, acquisition and strategic partnerships such as, Book Surge, Mobi pocket, Amazon Prime member ship program
* Ranking no. 2 in e-retail sites in customer satisfaction

* Profit margins squeezed in view of extensive investment in innovative ideas and technological developments. * Facing mounting pressure from traditional retailers who are increasing their foray into online sales which help in better customer service and store returns for online sales. * Throughout 2005 amazon restructured its multiple site locations with the closure and development of various facilities resulting in...
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