Market Review on Amazon

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MARKET REVIEW REPORT ON THE GROWING POWER OF AMAZON

BY

OLUWADAMILOLA O. ASHIRU

PROGRAM:

MSc MANAGEMENT

STUDENT NUMBER:

11691573

MODULE TITLE:

COMPETING THROUGH MARKETING (7BSP0395)

TO BE SUBMITTED TO:

MODULE LEADER: RON WELLS

DATE OF SUBMISSION:

15TH NOVEMBER, 2012.

NUMBER OF WORDS:

1620

INTRODUCTION

An Amazon.com Annual report (2011) states that Amazon.com opened its virtual doors on the World Wide Web in July 1995 and seeks to be Earth’s most customer-centric company for four primary customer sets: consumers, sellers, enterprises, and content creators. The Amazon Company with its headquarters at Seattle, Washington was founded by Jeff Bezos in 1994, and launched in 1995 with values statement such as Customer obsession, Innovation, Bias for Action, Ownership, High hiring bar and Frugality. Amazon was one of the first big companies to sell goods over the Internet. They started out as an online bookstore and then quickly diversified by adding other electronic items as well as clothing, furniture, toys and even food items. (Schneider 2012). The Amazon Company has changed over the years from [pic]

To [pic]
Source: Google Images (2012)

Key Trends in the Music Business
“The majority of music is now sold in digital format, downloaded by consumers to Laptops, MP3 players or other devices” (Miller &Washington 2008). A Keynote Report (2010) examined the different trends in the music business. • A Keynote primary research has shown that access to music has been spread out with new technology and the expansion of the media. In a survey conducted, 79.5% of adults listen to music every day, 69.4% listen to it on the radio regularly, 23.3% buy a music CD from a shop at least once a month, 27.2% play an instrument and 19.1% describe music as a their `main hobby'.

• Another trend is the relatively new consumer involvements with music. Young consumers are creating their own, purely personal music collections by downloading or sharing music rather than buying recordings as in the past.

• The trend in recorded music is certainly the drifting away from selling and buying music `products' in the shape of CDs to the distribution of recordings in electronic format. In the home, access to music has moved from the static high-fidelity system in the living room to the home computer and the electronic gadgets.

The Figure below shows the impact of Electronic channels on the Internal Market Environment in the Music Industry:

[pic]
Source: Mintel Report (2008).

The Book Business
A keynote report (2012) emphasizes that in terms of sectors, books are still contributing to the greatest share of the market, although there has been a clear decadence in value caused by the recession having an effect on consumer spending while the growing popularity of electronic books (e-books) is taking potential sales away from the conventional market. WH Smith and Waterstones are two of the leading high-street booksellers, although both continue to face competition from online and cheaper outlets. Online sites such as Amazon and Play are believed to have increased their share of the market, as consumers are more price conscious since the recession, going for the cheapest outlets. The major trend is the growing popularity of e-books. The digital versions are believed to be reducing sales of conventional books, while many are distributed at much lower prices, devaluing the entire book industry.

AMAZON: AN INTERNET PLATFORM

“E-commerce, or online shopping, is transforming the retail sector” (Keynote 2009).

Internet retailing
Grewal et al (2004) states, that the essence of any business strategy is the ability to develop a sustainable competitive advantage. There are some retail format elements that are more sustainable than others, both for internet retailers and for bricks-and-mortar...
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