AMAZON

Amazon



Executive Summary

Amazon is one of the leading online retailers in the world. Amazon is the second biggest online retailer in the UK, second only to Tesco. Amazon.com also achieves a great deal of its growth through the acquisition of smaller retailers. In 2009, Amazon acquired Zappos.com, strengthening its clothing and footwear offering. 2010 saw Amazon once again achieving growth through acquisition, with the purchase of online “deal-a-day” site woot.com (news.wooeb.com). Amazon plans to let Woot continue to operate independently. Woot is also a wholesale distributor which sells to Amazon and other retailers. The key competition of Amazon will increasingly come from Apple, Google and Netflix. Social retail is a newly emerging trend and Amazon has already invested in LivingSocial. For global network, In November 2010, Amazon launched its first new country specific web site in www.amazon.it, thereby increasing its presence in this market. Registered merchants can send inventory to Amazon fulfillment centers, and when order information is received, Amazon picks packs and ships merchandise.

The efficiencies of supply chain of Amazon have focused on keeping its warehouse costs low and developing efficient picking and packing. Outside of Amazon Prime, the company does not focus on overnight delivery as some of its competitors do. In addition to this, the company also relies heavily on software applications to maintain its supply chain and all applications used are developed in-house meaning the company is not reliant on outside software providers and can tailor solutions for their own needs. Furthermore, Amazon.com also achieves a great deal of its growth through the acquisition of smaller retailers. Amazon's decision to diversify its product offering so much led to some concerns that the retailer may not be able to maintain success in such a wide range of products. However, thus far it seems to be a tactic which is working for the retailer.

Amazon is facing competition from more sides than ever. The company should focus on a core set of competencies rather than taking a small stake in too many areas. Amazon should focus on being a leader in supply of content, for instance, E-books, streaming video. Amazon has launched an app to allow iPad users to read Kindle e-books on their devices, as well as their Windows 7 phones. The company however will face competition from Apple which seeks to supply both hardware and downloadable content for its devices.

Table of Contents

Executive Summaryii

Introduction1

Company Background1

Private Label2

The Competitive Environment & Its Impact on Amazon2

Traditional retailers step up threat to Amazon3

World's Biggest Retailer Ups Stakes in Internet Sales3

Amazon's Business Model and the Potential to Be Successful4

Strengths4

Strong Branding 4

Leader in E-Books5

Weaknesses5

Slow to Expand Geographically5

Lack of Bricks & Mortar Hurt Returns & Delivery5

Opportunities6

New Product Categories6

Increasing Global Distribution6

Threats6

Amazon Competes with Groupon6

Competition from Store-Based Retailers7

Key Strategic Objectives and Challenges7

Tougher Competition in E-Books7

Amazon Moves into Apparel7

Move to Downloads in Media8

Advances in Technology Put Amazon into New Playing Field8

Amazon Looks to Future of Internet Shopping8

Broadband TV8

Mobile Internet Shopping9

Voucher Sites9

First Mover Advantage & Maintaining That Position10

Pioneering Online Private Label10

Responding to intensifying competition10

Moving into the limelight10

Amazon-Industry Leader in Supply ...