Strategic Analysis of Amazon.Com

Strategic Analysis of Amazon.com
Terry Skinner
Columbia Southern University

Strategic Analysis of Amazon.com

Amazon.com has a simple yet bold mission statement, “Our vision is to be earth's most customer centric company; to build a place where people can come to find and discover anything they might want to buy online” (Bezos, 2010). Amazon.com was founded by Jeff Bezos in 1994 and launched in July 1995.   It began in the early stages of online retailing as a book store reporting sales revenue of 15.7 million and a customer base of 180,000 in 1996.   Since that time Amazon has successfully expanded its business to become the largest online retailer today reporting sales revenue of 24.51 billion for 2009.    
    Rivalry among competing firms.   When performing a competitive analysis it’s difficult to find a directly competing firm.   Since Amazon is so diversified not many, if any, firms are in direct competition.   Some firms compete in segments such as companies in direct competition with Amazon’s e-reader the Kindle or firms that also compete in areas such as digital media.   Competitors in these segments may have greater resources or longer histories, more customers or greater brand recognition in a particular segment.
    Potential entry of new competitors.   With Amazon’s globalization comes an increased risk of new competitors.   Local companies in foreign markets may have a substantial competitive advantage because of their understanding of local culture and customs as well as their established brand names.   This, along with other difficulties of operating globally, dramatically increases the advantage of new competitors abroad.
    Competition in the potential development of substitute products.   Amazon is primarily a retail distributor and the Kindle is the only product manufactured by Amazon.   There are numerous competitors in this market.   It’s important for Amazon to maintain any advantage they currently have.   In 2009 Amazon almost doubled the...
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