Amazon Case

From an Amazon official quote, ‘‘When we have both editions, we sell 6 Kindle books for every 10 physical books(“eBooks ... by the numbers”, 2010). This is pretty amazing number and this number told us a story that e-books is very popular and rapidly growth in the world. This is why Amazon dedicated to sell Kindle because they knew that this is a future. Kindle are trying to give reader a good reading experience that provided e-ink display (reads like paper), lighter, smaller and very affordable. Now Amazon has different six version of Kindle including,

Kindle- $79

Kindle Touch- $99

Kindle Touch 3G - $149

Kindle Keyboard 3G - $139

Kindle DX - $379

Kindle Fire - $199 (“Amazon different version of Kindle”, 2012)

From the price perspective, Amazon is not making money from selling these devices. Contrast, they are focusing on selling media/e-books through their valuable and enormous on-line store. Amazon’s market strategy is once people use these tablets, which feature Amazon’s media offerings and an Amazon will become dominated publisher’s distributed channel; this will drive a lot of incremental sales of both physical goods and media. In addition, Amazon has a Kindle application store, which provided thousand useful and functional applications to user so that Amazon will also increase revenue from that(“Amazon to sell 15 million kindle fires by 2013”, 2011).

Porter’s five forces analysis gives company or manager guideline to develop business strategies. Five forces are including threat of new entrants, firms offering substitute products, suppliers, buyers and rivalry among competitive industry.

Threat of new entrants:

Amazon is biggest online store in the world. They sold anything we needed and deliver to our hand. Amazon has highest reputation in selling goods and service, so no one can really compete in this time. However, Amazon has many competitors in digital content industry. Such as Google’s e-books, Apple’s ibooks store that they also provided thousand of title and reader can read the