MBA Strategy - Amazon Case

Amazon Case
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Amazon.com
Launched as an electronic seller of books in 1995, Amazon expanded its portfolio to other items and products. It aimed to be a one stop shopping experience for all. Humbly located initially in Jeff Bezo`s garage, Amazon is now a billion dollar company with a strong global presence. A medium term strategy is recommended given the circumstances that existed in the market and that is what this paper is about.
Jeff Bezos had a safe, prosperous career in the financial world and it was there that he began to understand the opportunities and potential the Internet had to offer. He discovered that internet usage was rising at 2300% a year in the 1990s. Bezos explored mail order businesses in order to comprehend what product could be sold efficiently over the market. He realized that the book sector did not have a regulated mail order system. So, he went to launch that out on the market. He attended a conference in Los Angeles to learn the dynamics of the market and then flew back to learn that his own company did not want to undertake such a venture. Therefore, with his wife, he drove to Seattle where he got the rights from Inagram, the main distributer. Offices were set up in small house and three hundred of his friends tested the beta. Once approved by all, he opened the doors to the internet online. Within the first month, sales had accumulated on a national level.
The business grew at a rapid rate and went on the stock exchange in 1997, after being launched only two years earlier. Amazon`s market share was bigger than its rivals. Bezo`s vision evolved from being the world`s biggest book seller to being the world`s biggest provider of every service imaginable. Keeping in sync with its highly customer focused and innovative strategy, he introduced pioneering features such as customer reviews, one click shopping and e mail order verification. Amazon diversified into toys, music, DVDs, CDs and electronics. In October 2002, a clothing segment was added with alliances with retailers such as the Gap and Nordstrom. In September 2003, it launched the A9 Search engine which concentrated on search for e commerce portals. It simultaneously introduced a sports store with three thousand brands under it. By the end of 2006, revenue had multiplied exponentially to $10.7 billion. (Jeffrey P. Bezos Biography, 2011)
Amazon has grown due to its ability to remain committed to its vision of being a customer centric company. By keeping the larger picture in mind, Amazon has taken steps to ensure its strategies are in line with its mission. Applying Porter`s five forces model, the first factor to examine is the bargaining power of consumers. It is relatively high as low prices and diverse variety keep reeling the consumer back in. The degree of competition is relatively high, especially, in Amazon`s e book commerce model due to low costs of establishment. Book stores usually have a greater customer base, stro...