Amazon.com, which went online in 1995, has been the first company to thoroughly understand the fundamental basics of e-commerce, and who skilfully knew how to use the evolutions in the Internet landscape and composition to its advantage, constantly adapting to the market. Amazon.com is an innovative, bold and flexible company, which flooded the markets and used technological improvements and a customer-centric approach to convince the most sceptical customers to buy online. Although Jeff Bezos, the founder, did not have any background or knowledge in the retail book market, he proved able to build an effective and efficient business model and to add value to its business year after year, while resisting to the fall of "Dots.com?.
[...] The founder of Amazon.com, Jeff Bezos stipulates as one of the two elements of its company's vision that he wanted to establish a place where customers could buy anything. We can then assume that Amazon.com will pursue further in its diversification trend. In the long term strategy of Amazon, we can imagine that it will aim at being a large online store providing a very broad array of products, but still specializing in books. We can also presume that Amazon's partnership strategies will go further, both with large bricks-and-mortars stores and small independent stores. [...]
[...] In fact, this harmed Amazon.com's brand awareness by bringing the average customer into confusion. Secondly, Amazon.com did not measure efficiently the logistical costs and challenge that incurred with other products than books. Inventory and transportation costs increased with bigger and more fragile/ sophisticated products and new problems appeared in this respect. Third, it was more difficult to sell non-informational products online. There is no possibility to provide sample or reviews of cookware to give a taste of the product to the e-shopper. [...]
[...] Moreover, this strategy allowed Amazon.com to surpass all its competitors and remain the dominant player. Its growth speed will then always be higher than other more focused players such as bn.com. By covering more markets, Amazon.com knew that it would increase its presence and fame and leveraged it with smaller potential profits, increased costs and possible losses/ failures in some markets. On top of that, when Amazon.com started its diversification, it was a hype company cherished by Wall Street and pointed by business consultants as an example of a new and successful way of conducting business. [...]
[...] Besides, although the technological advance is one of the main competitive advantages of Amazon.com, it is very costly and some analysts argue that the company would have saved money and used it more efficiently by reducing this R&D costs. Should Amazon have remained an online bookstore? Critically evaluate the arguments for and against quick diversification. It is often a good strategy to choose diversification when a business is as successful as Amazon.com in its early years. Amazon.com then had the relevant financial strength, brand equity, experience, physical and human support to start expanding its product line. In fact, a rapid diversification, in the case of Amazon.com was judicious for several reasons. [...]
[...] Can Amazon.com successfully compete with bricks-and-clicks stores such as Barnes and Nobles? Amazon.com's primary competition comes from bricks-and-click stores such as Bn.com. These companies are established players in the brick-and-mortar area that have also an online presence. For instance, many famous and successful stores, such as JC Penney and Circuit City decided to compete online too. Barnes & Nobles (Bn.com) is particularly dangerous for Amazon, because it has reached almost the same level of popularity on the Internet, and some sites such as MSN and AOL.com have signed agreements with and are advertising both companies, linking browsers with their online stores. [...]
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