Amazon Case Study Analysis

Amazon case study analysis

---- Jiachuang Sun

1. Review of Amazon’s strategy between 2007 and 2009

Strategic analysis

Profiling the business:

Mission: Amazon’s mission is to be Earth’s most customer-centric company, where customers can find and discover anything they might want to buy online, and endeavors to offer its customers the lowest possible price[ Source from http://www.amazon.com/Careers-Homepage/b?ie=UTF8&node=239364011 ].

Product/service analysis: Since the establishment of Amazon, new products has been kept adding into the original book category and Amazon has moved further to provide service. There are three product categories in Amazon, media category, electronic and general merchandise category and other category like Amazon web service and Amazon Enterprise Solution. This means you can buy almost everything from Amazon.

Sales and gross profit analysis: The net sales growth of Amazon in year 2007 and 2008 was in average 30% and the total sales in 2008 was $19166m. In the same time, the gross profit grew from $3353m in 2007 to $4270 in 2008. Actually, both the sales and profits grew quickly since 2001 and they seemed to grow at a quicker way.

External environment analysis

Opportunities and threats:

Opportunities: to further improve the speed of delivery; international expansion in emerging markets such as China and India; extension of brands into new areas; through acquisitions and partnership to consolidate Amazon’s technological capability.

Threats: unexpected changes in regulatory requirements both U.S. and abroad ( take taxes policies in U.S. for example, many states in U.S. starts to draft new laws to charge online retailing, which will curtail Amazon’s profit generating ability and thus reducing its advantage over low cost strategy[ Source from http://www.mwpvl.com/html/amazon_com.html ]); lawsuits from third party sellers; fluctuations in currency rates and trade barriers.

Internal analysis

Strengths: Amazon has provided its customers with wide breadth of products with low pice and high quality which earns its brand recognition and economics of scale. Besides, Amazon has the technological capacity, which underpins its distribution system, logistic system,ordering process, and further improves its effectiveness and efficiency so that they can offer their customers with lower price.

Weakness: Amazon has kept adding new categories to its online retailing which might make Amazon lacks of focus and risk its brand image. Moreover, Amazon has a