Amazon.com: Strategy & Business model
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The Web site Amazon.com once aimed to be the world's largest bookseller. Now the company offers a wide range of products and services to consumers, operating online retail storefronts for partners and developing and selling its own manufactured products (such as Kindle).
Can a company like Amazon.com have a strong business model but a weak strategy? Using the Internet, find Amazon's most recent annual report and peruse its main sections.
Based on your analysis of the report, respond to the following:
•How has the company's strategy changed from the original generic strategy that was applied?
•How would you describe the central elements of Amazon's strategy?
•In your opinion, what elements are involved in implementing the following business strategies?
◦A low-cost provider strategy
◦Differentiation
◦Diversification
◦Market timing
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Solution Summary
This solution explains the strategy and business model of Amazon.com. The sources used are also included in the solution.
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Step 1
Amazon.com's strategy has changed from the original generic strategy that was applied. The original strategy was that Amazon.com was a company that was an online bookstore. The original strategy was differentiation. The company was able to provide a wide selection of books that could not be matched by brick and mortar stores. However, currently the company is using the strategy of cost leadership by providing online services at very thin margins.
Step 2
The elements of Amazon.com strategy are online sales, and remote warehouse to compete with discount retailers such as Target and Wal-Mart. The company is using the strategy of cost leadership and keeps its costs low. Further, using cost leadership Amazon.com has increased its subscription base by keeping the price of its products and services low. An important element of Amazon.com strategy is fast growth. It has ...
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