Preview

Diversification Strategies

Powerful Essays
Open Document
Open Document
1526 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
Diversification Strategies
Diversification strategies are strategies used by companies to try to increase profitability through greater sales volumes obtained by new products and/or services. Amazon.com has diversified quite a bit since its conception in 1995. Starting out as an online bookstore, and evolving into a one stop e-shopping hub where millions of people shop for a variety of different items over the internet. Amazon.com today is one of the largest online retailers in the world. However, when companies try diversification strategies they are not always as successful. Time Warner, one of the largest media companies in the world tried to diversify their business by stepping into unknown territory in 2000. When Time Warner purchased AOL at the peak of the dotcom bubble era, they had no idea that they were going to lose billions of dollars due to the acquisition. In 1994, Jeff Bezos founded Amazon.com, and in 1995 the website went online. Before Amazon.com was founded, Jeff Bezos was paying very close attention to the rapid rise of the World Wide Web, stating in 1994 that it was growing at an annual rate of 2,300 percent. When Bezos decided to create an internet based company, he began doing his research by creating a list of the top 20 mail-order companies, and realized there were no book mail-order companies. Bezos parents supported his new business idea, and invested $300,000 they had saved for retirement to help get their sons company started. When Amazon.com went online in 1995, the company simply started as an online bookstore. While some of the largest brick-and-mortar book stores across the United States could offer its customers thousands of books, Amazon.com could offer its customers much more through its website (References for Business). After operations began successfully in Jeff Bezos garage, Amazon.com became such a popular website on the World Wide Web, it moved to its first warehouse in Seattle. At first, Amazon.com only carried about 2,000 different


References: Arango, T. (2010). How the aol-time warner merger went so wrong. Retrieved from http://www.nytimes.com/2010/01/11/business/media/11merger.html?pagewanted=all Funding Universe. Amazon.com, inc. . Retrieved from http://www.fundinguniverse.com/company-histories/Amazoncom-Inc-Company-History.html Johnson, T. (2000). That’s aol folks…. Retrieved from http://money.cnn.com/2000/01/10/deals/aol_warner/ Kramer, L. (2009). Why the AOL-Time Warner Merger Was a Good Idea. Retrieved from http://www.thedailybeast.com/articles/2009/05/04/how-time-warner-blew-it.html Levy, A. (2011). Facebook’s value tops amazon.com; trails only google on web. Retrieved from http://www.businessweek.com/news/2011-01-28/facebook-s-value-tops-amazon-com-trails-only-google-on-web.html Lopes, J. (2011). The pros and cons of amazon’s growth and diversification. Retrieved from http://jananomba.blogspot.com/2011/06/pros-and-cons-of-amazons-growth-and.html Reference for Business. (Encyclopedia of Business, 2nd ed.). Jeff Bezos 1964— biography. Retrieved from http://www.referenceforbusiness.com/biography/A-E/Bezos-Jeff-1964.html
Continue Reading
View Writing Issues

You May Also Find These Documents Helpful

  • Better Essays

    BUS3022 Unit 3 Assignment 1
    • 891 Words
    • 3 Pages

    BUS3022 Unit 3 Assignment 1

    Amazon.com is a publicly traded worldwide online retail company founded by Jeff Bezos on July 5, 1995 in Seattle, Washington. The company originally began as an online bookstore as Bezos felt there was a high demand for literature, and books had a low price point and a huge selection of titles available in print. Technological innovation drives the growth of Amazon.com to offer customers more types of products, more conveniently and at lower prices. Since 1995, Amazon has significantly expanded its product selection, international retail websites, and worldwide network of fulfillment and customer service centers. Today, Amazon retail websites offer everything from toys and video games to MP3 downloads and collectible items (amazon.com, 2014). Amazons business model is fairly simple; to sell various products and goods online at an affordable cost to consumers. Amazon has managed to not only achieve this business model but they have also managed to consistently expand and become the largest online retailer to date. To keep up with global demand, Amazon had to expand its products and services offered while continuing to forecast consumer’s needs. “In 2000, Amazon.com began to offer its best-of-breed e-commerce platform to other retailers and to individual sellers. Today, hundreds of thousands of world-class retail brands and individual sellers increase their sales and reach new customers by leveraging the power of the Amazon.com e-commerce platform. Partners work with Amazon Services to power their e-commerce offerings from end-to-end, including technology services, merchandising, customer service, and order fulfillment. Other branded merchants leverage Amazon.com as an incremental sales channel for their new merchandise. Over 2 million third-party sellers participate in Amazon where they offer new, used, and…

    • 891 Words
    • 3 Pages
    Better Essays
    Read More
  • Better Essays

    Bus 320 Final Paper
    • 1741 Words
    • 7 Pages

    Bus 320 Final Paper

    Founded in 1995 by Jeff Bezos, Amazon.com has become one of the largest known online stores in the world. In 1995, Amazon.com sold its first book online, which was shipped from Bezos’s garage in Bellevue, Washington (Amazon.com Mission Statement, 2012). Many may not know that Amazon.com had a slow start because their online layout was not appealing. Within a few years Bezos attracted a few investors who took interest in his venture and invested approximately $140,000. Bezos decided to use the money to create a more appealing website to attract more customers. The sales for the next three years surpassed Bezos’s expectations. After analyzing the sales data, he found that people were not only purchasing domestically, but also from around the world. Amazon.com has grown from a small company to a worldwide business in just a few short years. This rapid growth requires a company to reevaluate how it does business if it plans to expand or maintain its marketplace for the future.…

    • 1741 Words
    • 7 Pages
    Better Essays
    Read More
  • Powerful Essays

    To what extent is diversification the best strategy to achieve profitable growth?
    • 1220 Words
    • 5 Pages

    To what extent is diversification the best strategy to achieve profitable growth?

    Diversification - Practice under which a firm enters an industry or market different from its core business.…

    • 1220 Words
    • 5 Pages
    Powerful Essays
    Read More
  • Best Essays

    "Diversification is fundamentally a negative strategy.. Diversifiers are always running away from something." M.L. Kastens - Discuss
    • 2418 Words
    • 9 Pages

    "Diversification is fundamentally a negative strategy.. Diversifiers are always running away from something." M.L. Kastens - Discuss

    Companies usually decide within the course of their business which products or services they offer in which market (Macmillan et al 2000).Different matrixes are used to determine which objectives they may use to achieve their desired outcome during the product life cycle. One of the objectives includes the Ansoff matrix, which entails four product/market combinations but our focus is on the last of the combinations which is the high-risk diversification strategy (Ansoff 1968 pg 99).This form of strategy is viewed as different from other strategies because, it moves the company away from its original products and services into new ones.…

    • 2418 Words
    • 9 Pages
    Best Essays
    Read More
  • Better Essays

    Comapring Similar Businesses
    • 1151 Words
    • 5 Pages

    Comapring Similar Businesses

    Jeff Bezos started Amazon, a fortune 500 company based in Seattle Washington, in 1995. Amazon offers everything from books and electronics to tennis rackets and diamond jewelry. Big name retailers now work with Amazon services to power their E-commerce offerings including Tech services, merchandising, customer service, and order fulfillment. Incorporated in 1971 as Borders Books, Borders became the nation’s second largest retailer of books, music, and other educational, informational, and entertainment products. Borders was associated with superstores catering to book and music lovers, with a wide selection of hard to find titles and tapes, and varying electronic media.…

    • 1151 Words
    • 5 Pages
    Better Essays
    Read More
  • Powerful Essays

    Amazon.Com (Financial Analysis)
    • 2039 Words
    • 9 Pages

    Amazon.Com (Financial Analysis)

    Founder and CEO Jeff Bezos opened the virtual doors of Amazon.com's online store in July 1995. The company was incorporated in 1994 in the state of Washington and reincorporated in 1996 in Delaware. The Company's principal corporate offices are located in Seattle, Washington. Amazon.com completed its initial public offering in May 1997, and its common stock is listed on the NASDAQ National Market under the ticker symbol AMZN. Amazon.com's fiscal year is based on the calendar year, and the last day of the fiscal year is December 31. The closing stock selling price for February 1, 2006 was $43.98. Amazon has never declared or paid cash dividends on its common stock.…

    • 2039 Words
    • 9 Pages
    Powerful Essays
    Read More
  • Powerful Essays

    Aol & Time Warner Merger
    • 1779 Words
    • 8 Pages

    Aol & Time Warner Merger

    Unfortunately, instead of delivering according to the promises made, the merger turns a disaster, which brings a loss of almost $ 100 billion in shareholder value. In my opinion the new company has so many management issues for example; lack of long-term planning, inferior product development, difference in organizational culture which is more prone to imitation then innovation, and most important of all the main players of the deal Mr. Gerald M. Levin (chief executive, Time Warner) and Mr. Stephen M. Case (co-founder of AOL) fail to transform their passion and vision to their people.…

    • 1779 Words
    • 8 Pages
    Powerful Essays
    Read More
  • Good Essays

    Jeff Bezos
    • 1291 Words
    • 4 Pages

    Jeff Bezos

    Jeff Bezos is an American entrepreneur who was very influential in the growth of e-commerce. He is the chief executive and founder of Amazon.com, Inc., a company that began as an online merchant of books before it expanded to a wide variety of products. Amazon.com is the largest retailer on the internet and the model for internet sales. According to Drexler (2007), Bezos began his early career in house school. He developed the Dream institute which promoted creative thinking among the young students. He graduated in 1986 from Princeton University with two degrees, computer science and electrical engineering. In 1990, he joined D.E Shaw & Co. where he became the vice president. In 1994, he quit the company and opened a virtual bookstore in Seattle, Washington. He worked from his garage for a while as he developed the software for his site which he named Amazon.com.…

    • 1291 Words
    • 4 Pages
    Good Essays
    Read More
  • Best Essays

    Executive Summary of Amazon
    • 3297 Words
    • 14 Pages

    Executive Summary of Amazon

    Amazon.com is a customer centric company. They put more effort in improving their system to make the experience of customer more comfortable so that he keeps on returning to the website. Jeffery Bezos who is the founder of the Amazon.com started this company after seeing the use of internet increasing rapidly.…

    • 3297 Words
    • 14 Pages
    Best Essays
    Read More
  • Good Essays

    Amazon: History and Background
    • 1498 Words
    • 6 Pages

    Amazon: History and Background

    Amazon was founded in 1994 by Jeff Bezos, who is still the head of the company at the time. Based in Seattle, Amazon started out as an online bookseller and went on to become the world 's largest non-travel e-commerce business. Once the website was established as a bookseller, it was a logical step into the sale of other entertainment products, such as music and films, and also into the hardware used to deliver home entertainment.…

    • 1498 Words
    • 6 Pages
    Good Essays
    Read More
  • Powerful Essays

    Time Warner Case Analysis
    • 12441 Words
    • 50 Pages

    Time Warner Case Analysis

    Bibliography: “AOL Financial Chief Swad to Depart.”The Wall Street Journal. 20 February 2007. B.9. ProQuest. Drexel University Hagerty Library. 26 February 2007. “Time Warner.” Wikipedia, the free encyclopedia. 9 March 2007. Wikimedia Foundation. 12 February 2007- 10 March 2007. . “Video on Demand.” Wikipedia, the free encyclopedia. 9 March 2007. Wikimedia Foundation. 26 February 2007. . Bartiromo, Maria. “Microsoft/Time Warner Deal Analysis.” Technology Wire. 7 Nov 2005. n/a. ProQuest. Drexel University Hagerty Library. 26 February, 2007. CNNMoney.com. 2007. 25 February. . Hoover’s. 26 February 2007. . Seelye, Katharine and Richard Siklos. “As Time Inc. Cuts Jobs, One Writer on Britney May Have to Do.” The New York Times. 15 Jan 2007. C.1.ProQuest. Drexel University Hagerty Library. 26 February 2007. Sikols, Richard. “Cable Helps Time Warner Endure AOL.” The New York Times. 4 May, 2006. C1. ProQuest. Drexel University Hagerty Library. 26 February 2007. Taylor, Paul and Aline Van Duyn. “Icahn calls on Motorola after Time Warner…” 16 February 2007. 24. ProQuest. Drexel University Hagerty Library. 26 February 2007.…

    • 12441 Words
    • 50 Pages
    Powerful Essays
    Read More
  • Powerful Essays

    EASSY on amazon.com
    • 871 Words
    • 4 Pages

    EASSY on amazon.com

    After reading a report about the future of the Internet which projected annual Web commerce growth at 2,300%, Bezos created a list of 20 products which could be marketed online. He narrowed the list to what he felt were the five most promising products which included: compact discs, computer hardware, computer software, videos, and books. Bezos finally decided that his new business would sell books online, due to the large world-wide demand for literature, the low price points for books, along with the huge number of titles available in print.[16] Amazon[17] was originally founded in Bezos' garage in Bellevue, Washington.[18]…

    • 871 Words
    • 4 Pages
    Powerful Essays
    Read More
  • Good Essays

    Amazon Evolution
    • 444 Words
    • 2 Pages

    Amazon Evolution

    Jeff Bezos founded Amazon, his idea of selling books through the Internet and providing convenience for browsing books became one of the most successful businesses for online marketing. Providing people an array of books from around the world, proved profitable. Amazon business grew into a giant bookstore that changed a new revolutionary insight as to what has become a global empire. Their interest in growing reached out to more than 75% of the computer aged educated population and still today is growing bigger and profitable.…

    • 444 Words
    • 2 Pages
    Good Essays
    Read More
  • Powerful Essays

    Amazon E-Business
    • 1487 Words
    • 6 Pages

    Amazon E-Business

    Amazon had first started out as a company had first started out as an online bookstore. While selling books Amazon was making a decent profit, but Amazon leadership did not feel that they were not making as much money as they had hoped to make for the first year. Also a lawsuit from Barnes and Noble prompted Amazon to come up with a way to better its corporation. In 1999 when the E-Business boom began Amazon decided to jump on the bandwagon and emerge itself into the world of E-Business.…

    • 1487 Words
    • 6 Pages
    Powerful Essays
    Read More
  • Good Essays

    Amazon.Com's European Distribution Strategy
    • 1685 Words
    • 7 Pages

    Amazon.Com's European Distribution Strategy

    Amazon is one of the biggest and most famous online stores in the world. It is divided into several independent organizations like Amazon Europe, Amazon US and Amazon Japan. Amazon was founded in 1995 by Jeff Bezos. At the beginning it was just a platform for selling books at soon it became the world’s biggest bookstore with up to 2,5 million different titles. Their strategy was clear and easy: hold modest inventories and rely on wholesalers. The wholesaler can fulfill the order quickly while Amazon employees pick and pack the order and ship it to the customer. In 1996 Amazon grew really quickly by expansion of their distribution center, increasing number of titles and software development. In 1998 they were not longer a bookshop any more but expanded their product lines to music and videos.…

    • 1685 Words
    • 7 Pages
    Good Essays
    Read More