The Development of Amazon.com in Europe - Essay Example

They expanded their Seattle distribution center, and added a center in Maryland. This allowed them to offer speedy delivery to customers in the east and in the west. In 1997 they added additional product lines, music and DVDs, but in 1998 it was evident that other online companies such as Buy.com, BarnesandNoble.com and CDNow were offering serious competition. Amazon.com chose to expand quickly to offset competition, adding several product lines. By 1999 in addition to books and music, the company offered video, drugstore, auctions, electronics and toys, software and video games, home improvement, lawn, patio, health, beauty, kitchen, and in 2000 partnered with ToysRUs and launched a computer category (Hammond & Chiron).

By that time, their distribution centers had been increased throughout the country. The addition of cell phones, used products, and e-book store increased their volume. The company utilized Six Sigma (Define, Measure, Analyze, Improve, and Control) to improve their inventory and record accuracy, finding their errors reduced by 50% in a year. With global marketing the way of the future, however, Amazon chose to expand into the European market and found it necessary to meet different challenges.

Challenges Addressed in Amazon.eu It was quickly evident that methods that were successful in the United States would not work in Europe. The first challenge was to standardize and improve supply chain processes across Europe in the areas of vendor management, sales and operations planning, customer backlogs, and inventory management. Tom Taylor, Director of European Supply Chain Operations managed to meet these challenges by 2003 (Hammond & Chiron 209). In the meantime, other challenges had to be addressed beyond their acquisition of major online companies in Germany and the UK.

For one thing, Germany had only one wholesaler and France had none so different acquisition methods had to be found. Amazon.co.uk and Amazon.de offered only books in 1998, adding music in October 1999 and auctions and zshops in November 1999. Amazon quickly became a leading online bookstore in UK and Germany. In September 2000 Amazon entered the French market with Amazon.fr built from scratch and offering books, music, video, and DVD product lines all at the same time. Amazon Japan was launched in November 2000 and the international segment of Amazon was beginning to represent a significant portion of Amazon's total revenue.

Europeans, however, were less likely to have credit cards, less experience with mail-order shopping, and were more conservative in their shopping habits. In 2000 German retailers were not allowed to discount the price of books, and some online privacy issues were more sensitive in Europe than in the U.S., necessitating an agreement between EU and US government on treatment of personal and confidential data.