BUS 508 assignment 2

BUS 508 assignment 2 - Running head: AMAZON.COMS E-BUSINESS...

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Running head: AMAZON.COM’S E-BUSINESS MODEL 1 Amazon’s Business Model Regina Wood Dr. Linda Hargis Strayer University Bus 508 July 19, 2011 1. Discuss the pros and cons of Amazon’s growth and diversification of business and specialization, and make recommendations about what Amazon could have done differently. Amazon’s empire was found in 1994 by Jeff Bezos. Its main core as an e-retailer was book sales, which later lead them to diversify into selling more goods online including DVDs, CDs, mp3 downloads, computer software, video games, electronics, food, apparels, toys, and
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Running head: AMAZON.COM’S E-BUSINESS MODEL 1 furniture. The diversification strategy that Amazon decided to use actually benefited them in a good way. Even with the success in diversification, they have to challenges as well. Pros Innovation - As companies get larger; it can be extremely tough to introduce new products. This hasn’t been a problem for Amazon. The company has developed a thriving Internet hosting business the Kindle reading device (there are more eBooks sold than soft covers now); an Apple iPhone app for comparison shopping; video streaming for Prime users; and a Google Android app store. The Infrastructure - When Wal - Mart was growing quickly from the 1970s to the 1990s; a key competitive advantage was its sophisticated supply-chain system. Amazon also has a world- class back-end, in terms of its facilities and Internet platform. It means quicker shipments and higher inventory turnover, which boosts cash flows. It’s an advantage that is extremely expensive to replicate. Growth Story - According to a study from eMarketer, ecommerce in the US is expected to increase by 43.4% by 2015. The estimate is that over three-quarters of the Internet population will make purchases online. Of course, there will be strong growth in global markets as well. To this end, Amazon.com has been aggressive in making investments in countries in Europe and
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BUS 508 assignment 2 - Running head: AMAZON.COMS E-BUSINESS...

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