Principal of Economic

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  • Topic: Monopoly, Perfect competition, Amazon.com
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ASSESSMENT 2: INDEIVDUAL WRITTEN REPORT [Weight 20%]

PRINCIPLE OF ECONOMIC [CZBB9001] ADVANCED DIPLOMA in BUSINESS [April 2013]

MARKET STRUCTURE OF AMAZON INC.
By: NGUYEN VINH TRUONG ( WILL) Supervised by: Michael Leong

Presented to The Faculty of the Department of Business Submitted: 2th May, 2013

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Contents
I. II. III. IV. V. Executive summary .............................................................................................................. 3 Introduction and Background of company. ......................................................................... 4 Analyze ............................................................................................................................. 4 Conclusion ........................................................................................................................ 9 Reference ........................................................................................................................... 10

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I.

Executive summary
Amazon Inc. is one of the most popular web-site which sell online book in the beginning and with development they create more product line for attracting new customer from other website. This assignment will analyze what type of market structure that Amazon Inc. use for the company to enter the new market and manage the company. It is also about how they change the form of company from oligopoly to monopolistic competition. On the other hand, with the development of technology, Amazon Inc. has to create Kindle – Fire tablet (1st is electronic book) for entering new market. That is a big movement of Amazon Inc. and it makes other competitors have to go after Amazon Inc. and create the same product.

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II.

Introduction and Background of company.

As you know Amazon.com is one of the best online stores in over the world. When you access to the website of Amazon.com, you can find all thing that you intend to find and buy. Amazon.com, Inc. is an American multinational electronic commerce company and the headquarter is in Seattle, WA, United State. They were known as the largest online retailer. From the beginning, Jeff Bezos began to build Amazon.com with the main product was book and it was attracted many customers in US. With development, they was diversified their product to keep customer use Amazon.com. They continue with selling DVDs, CDs Mp3 download, video games, electronic, cell phone, apparel, furniture, food, and toy, etc. It means the customers can find all things that they want in Amazon.com. This makes them become popular rapidly and put more pressure on other retailer. Furthermore, in 2009, Amazon.com was published and present to customer Kindle e-book, it is a big achievement of Amazon, and they change the habit of many reader in around the world. Now it is one of the signatures of Amazon.com, and they feel proud about it because they can control all the book market and none competitors can beat with them. Now with more than 900,000 retailers supply their product by Amazon.com and they have more than 9000 employees around the world with more than 10.7 billion US dollar revenue per year. In this report, I will analyze what kind of market structure that Amazon.com operate in, how it effect to the company and last but not least is some recent development of Amazon in sport apparel industry e.g. Nike and Adidas. (Schneider, 2013)

III.

Analyze
1.1 Kind of market structure does Amazon operate in.
The market structure that Amazon operates in is Oligopoly. This type of market mean there are only a few companies that can build and develop an industry. This group of companies has the power to control the price and same a monopoly, an oligopoly has high barriers to entry the market. This can make many difficulties for all other companies that they want to enter the market because they cannot have the good product price and the system of the company in oligopoly are really strong, weak...
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