Amazon….The world’s largest online retailer. An American multinational electronic commerce company that makes millions of dollars in profit in a year. A company that has separate retail websites in the U.S , Canada , Europe. Very well known brand in the world.
The case study that is made for Amazon.com shows that in 2002 almost half of the revenues for that brand were from selling books, music and DVD’s or videos on Amazon. Here it is suggested that Amazon should concentrate the business on this segment, since it is shown that it has the most expertise in that field and it makes a lot of money only by selling those things. Another thing that the case recommends is that Amazon should reduce the number of employees and to cut the warehouse costs by selling e-books that can easily be downloaded on the computer. This way, amazon will charge a fee to everyone who wants to download a movie or a song and by doing so, it will stay within its niche market, with no inventory. Another recommendation is that amazon.com should be competitive to Ebay. The study shows that amazon should move into a C2C auction forum and here , the costs will be reduced and on the other hand the inventory will be very low.
The alternatives given here include recruiting a new management team that doesn’t focus on enlarging the market share, but on making a profit. From one point of view, it is good thing if a business tries to enlarge the market share, but if the business doesn’t make profit it could be very bad and it could end up bankrupt. To end up with , the last alternative given here is for amazon to sell off their least profitable sector in order to cut their losses, instead of incurring large amount of debt which is not good for any business.