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Strategy Recommendation Amazon Essay

2503 words - 11 pages

Strategy Recommendation Project Final
James Bellew
Capella University
MBA6004 Section 01, Jan-Feb 2014
U06a1
Instructor – Dr. Rebecca Snarski
Due: February 16, 2014

Table of Contents

Introduction……………………………………………………………………………… 3 Brief explanation of Project………………………………………………………..... 3
Who is Amazon……………………………………………………………………… 3
Why did I choose Amazon…………………………………………………………... 3
Amazon's Channel Design including its use of the Web………………………………... 3-4
Web Beginnings……………………………………………………………………... 4
Today………………………………………………………………………………… 4
Amazon’s future including key strengths and weaknesses……………………………… 4
Amazon’s Vision and the changing Web…………………………………………… 4-5
Key Strengths ...view middle of the document...

Amazon was chosen for this strategy recommendation because it’s a prime example of a business that personifies an organization that is based and reliant on the web. The future of Amazon is tied to the future of the web and the implications of this symbiotic relationship are connected to the point of convergence. This paper will discuss Amazon’s rise as one of the most prominent web-based companies in the world and how the web economy is tied to Amazon’s past, present and future survival.
Amazon's Channel Design including its use of the Web
In 1995 Jeff Bezos founded Amazon.com, an online bookstore that sold books at deep discounts, 30-40% off brick and mortar store prices. Within 4 years Amazon had grown into the largest Internet merchant in the world with daily sales of books, music and videos exceeding $3M. Jeff Bezos vision saw Web-Based commerce becoming a significant channel for the sale of goods, services and entertainment and predicted that within 10 years would reach 15%+ of total commerce (G. A. 1999, July 12).
Today Amazon’s annual revenues are over $100B and serves consumers all over the world through its retail websites. Over the years Amazon continues to update its Websites to enable millions of products to be sold by the Company and by third parties across dozens of product categories. Customers access its Websites directly and through its mobile Websites and mobile apps. It also manufactures and sells Kindle devices and continues to be a driving force in the tablet market. In May 2012, Amazon acquired Kiva Systems, Inc. (Kiva) and in October 2013, they acquired TenMarks Education Inc.

Fig. 1 – Amazon Investor Relations

Amazon continues to offer its customers the lowest prices available through low everyday product pricing and subsidized shipping offers, through its memberships in Amazon Prime. Amazon has also expanded its reach by offering sellers to sell their products on its websites and their own branded websites and to fulfill orders through them (Amazon, 2013). 

Amazon’s future including key strengths and weaknesses
Amazon is clearly betting its future on the steady growth in e-commerce. All leading research firms expect the online share of retail sales to steadily climb, out pacing traditional brick-and-mortar retailers. In 2013, Forrester reported a 13% growth in e-commerce sales bring the total of online sales to over 8%. Forrester and others have also projected an annual growth rate of 9% for the next 5 years. While the growth rates in the US are very promising, it’s the international markets that offer Amazon the largest potential growth (Team, 2013).
In addition to the growth in e-commerce, Amazon is looking to its Kindle tablet and it’s Cloud services to drive future growth. Amazon has shipped millions of its Kindle tablets and sales are increasing. The real driver for Amazon is not the tablet itself, but the revenue that each Kindle user drives. ABI Research estimates that over 22% of tablet...

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