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Amazon's Case Study

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Case Study 1 - Week 1

Maria Mines

Amazon's competitive market position is online shopping. It is considered the premier online retailer.

Its products have expanded from selling books to CDs, DVDs, and videos. The company reacted to its

threats from eBay and Yahoo by collaborating with the Gap and Eddie Bauer, and they run the other

companies websites which is called powered by Amazon that allows them to be a one-click ordering

company. The founder and CEO, Jeff Bezos, identified that the pressure from the financial markets and

decided to change the short-term profits in order to build long-term growth, increased market share,

and increased shareholder value. Bezos did this through the phases of strategic management of basic

financial planning, forecast-based planning, externally oriented (strategic) planning, and strategic

management. Bezos reviewed Amazon's year budget and realized that they had heavy competition, so

he decided to abandon the short-term profits in order to build long-term growth. With the decision to

build long-term growth, he proposed a five-year plan by gathering information on the competition in

addition, reviewed the current trends of online purchasing. He then processed the strategic planning by

changing its market of expanding its business from just selling books to now selling CDs, DVDs, and

videos. He then gained the commitment from the employees including top managers, lower-level

managers, and key employees at all levels, to achieve Amazon's primary objectives.

The strategic factors facing Amazon are determining its SWOT analysis (strength, weakness, opportunity

and threat). Its strength is being considered the premier online retailer, its weakness is only having

products of books, CDs, DVDs, and videos, its opportunity is to grow to beat its online competitors, and

its threat is the success of eBay and Yahoo.

I do believe that Amazon has core competencies being that it can reinvest in being a one-click ordering

company. It is a great advantage for Amazon because it allows them to have control over the other

company's websites. Amazon has recently announced that it is replacing its Zshops with a new

Storefront format. Its purpose is to display only the seller's marketplace exclusively. Customer service is

very important to Amazon, which is why, they created the Storefront. It will allow the customers to a

better selling experience.

The programs offered through Amazon are share the love, A to Z guarantee, and product

recommendation. The share the love program allows customers to add their family and friends to their

contact list so that they will receive an additional 10% off on the items the customer purchased. It

works by sending friends and family an email explaining the discounts and how to apply them. The A to Z guarantee program is ensuring the purchases are guaranteed when payment is received through the Amazon website or through third party seller websites. It is guaranteed



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