Case Study Analysis on Amazon.com - Research Paper Example

Despite him having a degree in computer science, he had a vision to build a network for international trade. In lights of this, Preston founded Amazon.com in 1994 as a website for international trading. Online Retailers and wholesalers as well as buyers and sellers met online globally. Amazon founders had a vision to become one of the world’s leading companies dealing with online trading. The management in Amazon.com sought to reduce negative environmental impacts as there was no physical contact between the traders.

Amazon has operating earnings close to $52 million yearly. Amazon Company normally projects to make approximately $22 million to $2.2 billion within five years (World, 2007). Examining the business model they use, Amazon primarily switched to Linux as primary architecture. In addition, Amazon has lowered technology expenses by about 20%. However, the decision to lower technology expenses has not profited Amazon as projected. Company Strategies and Customer Acquisition Considering the pricing, the strategies have changed over time.

Amazon has regulated the prices through several policies for example, introduction of frustration free packaging. This policy is an initiative that is designed to simply motivate the customers who purchase goods online at different times of the year. The customers feel motivated when they buy two products for the price of one. Another policy is the free packaging certification initiative for manufactures. Their products undergo free laboratory testing to acquire certification. As a result, the certifications on their products increase the value and enable sales at high prices.

However, the pricing of products sold at Amazon.com tend to be high hence attracts the upper class society and several middle class persons. Amazon.com customers are mainly acquired through word of mouth through satisfied clients. More customers are venturing into online shopping due to the fact that it is environmental friendly and efficient. Most customers are parents who are purchasing gifts for their children and loved ones. Since Amazon began, it has existed under many models over the years hence adopting other models can work in its favor.

However, this will affect the existing revenue steams. The major reason is the fact that obtaining new models will change the technology used. On one hand, when the technology costs increase, the main revenue stream will decline while on the other hand, when the costs of technology decrease, the revenue increases. Challenges and Opportunities facing Amazon.com Amazons major competitors are mainly online shopping websites. Some of them include LL Bean, Electronic trade & Onlineshoppers companies (Night, 2004).

The advantage that Amazon has over its competitors is the reliability. Over the years, Amazon has existed selling their products to many customers. Shopping at Amazon has proved worthy over the many years of operation for online traders. One disadvantage is that a lot of competition has risen and the level of technology improved. In considering how Amazon.com has changed the trading industry, there is the belief that innovation has the power to change the world. It has raised interests to trade online (Grant, 2004).

The requirement to begin trading online is the desire to shop in a whole new zone. Amazon is always searching for new ways to improve its efficiency on behalf of its customers as well as individuals who shop on trading websites. There are merchants who sell on its