Amazon.coms Business Model - Research Paper Example

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Amazon.com is regarded as one of the leading online book sellers in the entire globe. Since its inception in 1944, the company has continued to diversify its market space by launching a new website in Germany, France and Italy that provide varied services to the consumers. …
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Amazon.coms Business Model
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Download file to see previous pages As a result of stiff competition in business, the company has devised a new mechanism that aims at cushioning itself from the current inflation and economic recession by engaging in other business such as selling electronic devices, toys, food and music. The company also offers shipping transport to other airlines thus maximizing its profits from all the sectors. The success and economic growth of Amazon Company are grounded on the following principles that are customer oriented: convenience, pricing and selection. From the Swot analysis approach, it has been established that combining these three factors improves the company’s image by developing loyalty, trust and commitment to customers. This is one of the strategies that have been used by Amazon Company to lay off most of its competitors as it enhances high productivity and efficiency in the Company. Part 1.A: Pros of Amazon.com The prosperity and economic growth of Amazon organization is grounded on the following advantages: Leverage of economies of scale: The company has greatly utilised the availability of fixed assets that are related to distribution and storage of goods by offering shipping services. Through the interaction of many customers the company markets its products thus expanding its market share to other regions of the world. Expansion of the market share: For any company to prosper in the business arena, it should develop strategy plans that aim at distributing its goods and services at the lowest cost. With the advancement of science and technology coupled with the easy access to internet, the company has in the recent time launched a new website. In this website the company has managed to display more goods and services that its offers to consumers thus increasing its sales volume. Localization of goods and services: From the past experiences, the company has realized that most consumers lacked some of the related goods that the company availed in their shelves, hence compelling customers to shop them elsewhere. In order to counteract such effect, Amazon Company has increased the brands of goods by ensuring that there is one-stop shopping centre. Customers are now in a position to buy all their goods from one main location. Provision of availing other related goods: This idea aims at taking into account the needs and preferences of all the customers on the purchased goods. For instance, if a consumer has bought a book and he has eyesight problems, the company should be in a position to sell reading glasses to that customer rather than sending him to other shops. This idea has also improved the company’s image globally in the sense that it consumers are allowed to make orders based on their personal interests and preference. Implementation of effective marketing strategy: Marketing is a crucial facet in an organizational operation because it allows the company to realize the efforts made from the production system. It connects the organizational goals and objectives with the needs of the customers as stipulated in the market domain. Amazon Company adopted the strategy of market segmentation which allows flexibility in product distribution. Based on the demand and population density, the company produces goods that are specifically meant for a certain portion of the population hence satisfying the needs of consumers. Part 1.B: Cons faced by Amazon Company The journey to the Company’s success has not been smooth without the challenges and drawback as highlighted below. Stiff competition from other companies: The world of business can be compared to a battle field where the mighty survive while the weaklings perish. Consequently, well established organizations have a high chance of ...Download file to see next pagesRead More
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