CASE ANALYSIS: AMAZON.

COM INC- 2000

BACKGROUND

In the early 1990’s, the dot-com boom drastically changed the landscape of communications,

business and culture with no signs of regression. For new businesses, effective innovation offered

great potential through the World Wide Web. Growing popularity of Internet access created an

inspiring logistical niche later popularized as “E-commerce”, proving to be a successful means of

purchasing products through the Internet. Jeff Bezos, founder of Amazon.com, Inc. (Amazon) was

the first to profitably innovate in this emerging market, and has become the world’s largest online

retailor. For the last two decade Amazon.com has been serving customer worldwide. Amazon.com,

often simply Amazon, is an American electronic commerce and cloud computing company,

founded on July 5, 1994, by Jeff Bezos and based in Seattle, Washington. It is the largest Internet-

based retailer in the world by total sales and market capitalization. Amazon started as an online

bookstore, later diversifying to sell DVDs, Blu-rays, CD s, video downloads/streaming, MP3

downloads/streaming, audio book downloads/streaming, software, video games, electronics,

apparel, furniture, food, toys, and jewelry. The company also produces consumer electronics—

notably, Amazon Kindle e-readers, Fire tablets, and Fire TV—and is the world's largest provider

of cloud infrastructure services (IaaS). In 2015, Amazon surpassed Walmart as the most valuable

retailer in the United States by market capitalization, and is, as of 2016 Q3, the fourth most

valuable public company.

The time context began in the year 2002, which id during the time when Amazon is beginning

to expand and diversified.

II. VIEWPOINT

JEFF BEZOS- the company’s founder, CEO, and Chairman of the Board.

As the CEO, he has the power to see to it that the policies and procedures, same as strategies

formulated are well-implemented by the management in order for the company to gain its

success and development.

III. CENTRAL PROBLEM

There is a need to create and implement a strategic plan in order for the Amazon maintain

being the world’s leading Internet startups and E-commerce.

The world is changing more rapidly, and consequently firms are also changing rapidly

especially those in the internet and computer industry. Due to intense global competition, and

fast technological advancements, Amazon must always be prepared to face challenges. There

is a need to provide strategic plans immediately since Barnes and Noble, a competitor in online

market, is now graphing a percentage on market share through offering competitive packages.

IV. OBJECTIVES
MUST
To be able to create and implement a strategic plan in order for the Amazon maintain

being a market leader in an online business/ E-commerce.

soon as possible.

V. AREAS OF CONSIDERATION

STRENGTH

1. The company has expanded their profits and products to sell over the years, and is continue

to expanding their market.

2. The company now offers electronics and softwares, toys and video games, home

improvements, electronic greeting cards, online auctions, DVD’s and one virtual mall.

3. Amazon has hired several well-established people from different known companies.

4. The number of internet users are expanding continuously, which is beneficial for the

business operating as an e-commerce.

5. Amazon’s internet systems cannot be easily discussed, it is deeply intertwined with both

its retail business and the kindle ecosystem.

WEAKNESSES

1. People are afraid to p’urchase products for online, they are having fear of theft of private

financial information.

2. Amazon does not have a redundant computer system. If a disaster happened at Seattle

location, it would lose its ability to deliver to customers.

3. some customers experience great difficulty in returning merchandise.

1. Amazon can also acquire a major internet company such as Yahoo.

2. Amazon has the opportunity to buy Ingram group book in order to expand their group

distribution.

3. Amazon can expand further internationally.

4. A part of its retail strategy is to serve as the channel for other retailers to sell products and

talking a cost of every purchase.

THREATS
1. Their major competitor, Barnes and Noble, is a combination of brick and mortar and virtual

company unlike Amazon focused only on online transactions.

VI. ALTERNATIVE COURSES OF ACTIONS

ACA No.1 MARKET PENETRATION

Increasing market share for the present products and services through greater marketing

efforts.

ADVANTAGES

1. Consumers will consider Amazon as one of the possible service providers.

2. Giving importance to the products and services offered by the company.

3. Increase Sales

4. Highlighting competitive advantages over competitor’s offer.

1. The pricing strategy must be better than the competitors pricing strategy to become

successful. It can stretch company’s cost.

2. Increase promotional cost.

3. Low prices means low quality, quality of product is at stake.

ACA NO. 2 MARKET DEVELOPMENT

Market development is offering existing products/ services to new geographic areas.

ADVANTAGES

1. Increase Sales turnover

2. Increase in market share by expanding geographically.

3. Familiarity with different markets.

4. Each new country is considered a new market that creates growth opportunities.

DISADVANTAGES

1. Market expansion is too costly in terms of marketing of services.

2. Changes in business strategies would occur.

ACA NO. 3 GROWTH STRATEGY

This is used when an organization wants to grow and does so by expanding the number of products

offered on markets served either through its current business or through new business.
ADVANTAGES

1. The innovation will increase the company’s bottom-line due to increased number of

consumers.

2. Increase or maintain market leadership of Amazon.

3. The company should strive to develop a new product/ services or a specialized feature on

the company’s services based on the available resources thereby encouraging new

customers to patronize Amazon and existing customers to be more loyal to Amazon’s

business.

DISADVANTAGES

1. Pilot team should be assigned to propose and develop a special feature/ service which

would be composed of people from its company and it will top to manage.

2. Plans and procedures for innovative prodcuts will be costly on the part of the Amazon

company.

VII. RECOMMENDATION

In order to give answer to the central problem, a new strategic plan will be created and

implemented by the management. The company must exert greater marketing effort, stressing

the importance of four marketing mix in order to maintain the company’s leadership in the

market.

Upon review of the alternative courses of action, ACA No. 2 Market Development is the most

advantageous strategy for the Amazon. Even though it would entail additional expenses, it

would be worth it and beneficial to try because when it becomes successful, the risks are all

worth it.
VIII. PLAN OF ACTION

1. Amazon will first establish a survey in order to know what country to pursue.

2. Once the country is identified, they will further evaluate the country’s traditions,

culture, and economic status and population.

3. Implement the strategic plan.

4. Efforts will be made to enhance and ensure customer satisfaction.