Amazon Com An E Commerce Retailer Marketing Essay

Amazon Com An E Commerce Retailer Marketing Essay Aggressive competition, along with the external factors of a poor economy and possible repeal of the Internet sales tax exemption, has forced Amazon.com to reevaluate its current strategies and redevelop an â€Å"effective differentiating strategy† in order to make the company a â€Å"consistent money maker† in the short and long-term time frames, while still continuing to pursue corporate objectives of expanding at reasonable costs and staying ahead of the company’s competition. 2. Summary statement of the recommended solution: Develop and implement a competitive business-to-business (B2B) exchange for suppliers, retailers, manufacturers and distributors. B. THE SITUATION Amazon.com was founded by Jeff Bezos in 1994 and was , â€Å"à ¢Ã¢â€š ¬Ã‚ ¦considered to be the premier online retailer in the world† (Collins, P., Mockler, R., & Gartenfeld, M., p. 2, 2003) in 2003. The company originally only started with selling books, but later expanded into severa l other product lines such as: CD’s, DVD’s & videos, electronics, toys, apparel, and home & garden supplies. Amazon.com also offered services which included: online auctions, partnerships with retailers (i.e. The Gap & Eddie Bauer,) Zshops (store hosting) and website management. In 2003 the company reported its first operating profit of $64.1 million, which was an 115.55% increase from 2001’s $412.2 million operating loss, for the fiscal year ending December 31st, 2002. Amazon continued to meet its internal goals, â€Å"à ¢Ã¢â€š ¬Ã‚ ¦of focusing on increased market share, expanded product offerings, and overall sales growth, the company was still facing pressureà ¢Ã¢â€š ¬Ã‚ ¦to produce consistent operating profits and to prove that its business model worked financially over the long-term.† (Collins, P., Mockler, R., & Gartenfeld, M., p. 3, 2003) The pressure the company was facing, combined with a decreasing consumer confidence, an increased unemploymen t rate, and competitive threats from other online companies, like eBay and Yahoo!, who had started to expand into Amazon.com’s current markets, left Bezos â€Å"à ¢Ã¢â€š ¬Ã‚ ¦with the task of developing an effective differentiating enterprise strategy if Amazon.com was to survive and prosper against aggressive competitionà ¢Ã¢â€š ¬Ã‚ ¦Ã¢â‚¬  (Collins, P., Mockler, R., & Gartenfeld, M., p. 2, 2003) II. ANALYSIS A. ANALYSIS OF THE SITUATION 1. Management In Amazon.com first year as a company, they focused completely on increasing market share and superior customer service, but when the dotcom â€Å"bubble burst† happened and Amazon.com’s stock prices fell Bezos and his management team struck a good balance between their goal of increasing market share and their goal of producing a profit. This shows that the management team for Amazon.com is rather flexible one and is willing to change strategies when the opportunities arise and the company is willing to modif y its business model if it feels that an opportunity to expand in a new area will be profitable. 2. Operations Amazon.com has a corporate headquarters, which is located in Seattle, WA, and several distribution centers that are located in New Castle Delaware, Coffeyville Kansas, as well as in Campbellsville and Lexington Kentucky. Having these distribution centers allow for a better ability to regionally segment the United States, which allows for faster order fulfillment and higher customer satisfaction. Since they operate online, they have also expanded their website operations into several different countries including: Canada, France, Germany, Japan and the United Kingdom.