Strategic Case Study: Amazon
- What industry is Amazon in exactly and what are its competitive dynamics?
- What are the key success factors in the industry Amazon is operating in?
- Convenience (from order to delivery)
- Large offer
- Low prices
- Security and safety
- Brand recognition
- Technological innovation
- Analysis of Amazon's resources and competences. (Using VRIN model)
Since its creation in 1995, Amazon has become an international brand. The company is actually one of the most recognized brands in the world and was the number one global online service in 2003. It was first a online seller of books then it progressively diversified to selling music, movies, electronic goods etc. Thanks to its creator, Jeff Bezos, Amazon was an early exploiter of online technologies for e-commerce which made it one of the first online retailers in the world. Indeed, he was a precursor and came up with ?the statistics of the electronic world, known as the World Wide Web, that it would grow at the incredible rate of 2,300 per cent monthly?. Obviously, Bezos was totally right.
Amazon's success was built on one main strategy in use since 1995, a strategy centered on customers by constantly improving innovations on its website. Amazon's customers can find anything they want online due to the biggest collection of goods and services and the lower prices of the market. Amazon is also well known as being ?the Wal-Mart of the internet?, it wants to provide all things to all people.
The ?one click order? processing made Amazon the favorite customer website (awarded in 2002 for receiving the higher score ever recorded in customer satisfaction from the American Customer Satisfaction Index). The company is famous all around the world, thanks to different websites in several countries. With the advantages it has to be number one in the market and with the high level of innovations it provides, Amazon is now benefiting from a very important amount of repeat purchasing online; customers, once they use the website, they usually use it again and again which gives Amazon a very good position in the market. This customer loyalty and the capacity to reach a huge worldwide audience has made Amazon one of the main actors of online businesses.