Analyze Amazon.com strategy using the competitive forces and value chain models.
Ans: From the traditional bricks and mortar industry, Amazon.com is the first company to evolve "book retailing" by going online on a large-scale. To date, Amazon.com provides an online retail store which constitutes of numerous products across a common platform. The company's retail website includes established web portals spanning across all leading economies as depicted in the case. In revolutionizing the e-commerce industry, Amazon.com is able to leverage information by making use of existing and new technology effectively in order to gain a competitive advantage. In attaining a competitive advantage, Porter's five competitive forces can be used to analyze Amazon.com. These forces include threat of new entrants within the market, bargaining power of suppliers, substitution of products and services, bargaining power of buyers and industry competition. The Internet has changed the nature of doing business, so has the competition that surrounds it. By supplying a wide range of products to the consumer, Amazon.com shares a market space with the likes of Wal-Mart and eBay. Rivalries amongst existing firms are strong as the industry is growing and the products that are being sold to the consumer are not so differentiated. Amazon's business strategy "to become the best place to buy, find and discover any product or services available online", has allowed for further competition within online and offline retailers. An example of online retailers would be eBay and offline retailers being Exclusive Books. Since the industry is increasingly attractive, it gives way to new entrants in the market as the Internet facilitates in reducing barriers to entries. Offline competitors such Wal-Mart which traditionally followed the brick and mortar approach is using technology such as the Internet to increase buyer awareness, capture a wider market of customers to increase its revenue. As the...
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