Amazon.coms E-Business Model - Term Paper Example

However they soon diversified their portfolio and ventured into selling DVDS, CDs, and MP3 downloads software’s, games, electronics, food, toys, furniture and apparel. They started spreading out from United States and established bases in Canada, the United Kingdom, Germany, France, Japan and China. Amazon’s growth and diversification of business into different genres helped it boost its sales. It made inroads into different products and excelled at it, simply by virtue of its branding. The growth and diversification strategy pursued by Amazon created more customers for Amazon and with that its revenues also shot up.

On the cons end, Amazon’s growth created more expenses by expanding so rapidly in different genres. Its distribution costs also rose up in the process. I feel that Amazon could have taken a gradual evolution into expansion, starting from U.S then following up in other North American and South American countries before disembarking to Asian and European countries. This would have ensured a slowly and steady growth and expansion across the borders and kept the expenses in check. 2. Determine the impact if Amazon.

com had split up and become a family of brands (for example, “Amazon” for books, “Super toys” for toys, etc.), each with a different public face but all run by the same parent company. Splitting up into a family of brands would not have worked for Amazon. This is because, Amazon the brand attracted people and it was this branding loyalty which later translated into sales and revenues for them. Splitting up into a family of brands would have also risen up its costs, something that Amazon would not want to risk given the fact that its competitive edge is built on its low costs.

Under its cost leadership strategy Amazon has stood out by offering rock-bottom prices. It provides good quality products at low prices. Its prices can’t be matched by its competitors. This makes it an obvious choice