AMAZON’S BUSINESS STRATEGY

Amazon has applied the traditional retail recipe: wide choice, irreplaceable user experience, and low price. However, the genius of J. Bezos prompted him to apply this recipe to e-commerce by taking advantage of the benefits of the digital environment.

Unlike the traditional retailer Walmart or Carre four, Amazon’s business model offers certain advantages that are not allowed for offline trading, which has earned it valuable competitive advantages.

Amazon has resorted to several strategies to expand its business across the world and win many customers and suppliers, focusing on three levels [16]:

• External Growth: 16 categories of new products and services created. Example product categories: books, motorcycles, jewelry watches, sports, and entertainment, etc. Examples of new services are Cloud Computing, Market Place, and Amazon Web Sendees (AWS) (Figure 17.2).

Amazon’s business strategy. Source

FIGURE 17.2 Amazon’s business strategy. Source: Roumieu et al. [16].

Acquisition of Competitors based in Strategic Markets, where:

о 1998: Acquisition of the famous German bookstore Telebook and turning to Amazon.de, in addition to the English site Book pages and turning toAmazon.co.uk.

о 1999: Acquisition ofPlanetHall.com to manage address records and customer phone numbers.

о 1999: 54% of the shares of the e-commerce site Pets.com, which specializes in the distribution of animal products (food, supplies, and equipment, etc.), purchased.

о 1999: Acquisition of Leep Technology Inc. specializing in the programming and development of customer relationship management systems.

о 2004: The acquisition of the largest Chinese e-commerce site Joyo.com specializing in the distribution of books and CDs, worth $75 million.

о 2010: The acquisition of QuidSi for S545 million, and allocated its first division Diapers.com to distribute diapers and the second division Soap.com for hygiene products.

Alliance and Investment: Amazon tried to control the horizontal

and vertical markets through:

о 1999: Alliance with Dmgstore.com specialized in health products and cosmetics.

о 1999: Merger with Accept.com, specialized in the development of B2B and C2C exchanges.

о 2000: Purchase of stakes from Basis Tech, specialized in improving customer experience.

о 2000: $60 million investment in Kozmo.com, an online delivery specialist.

о 2002: A partnership agr eement to develop the CDNow platform.

Adapa and Debapratim also added that transformation strategies included the following [17]: [1]

  • [1] July 2002: Amazon launches web services. • June 2003: Fust sendee branch established. • April 2004: The first jewelry store. • February 2005: Amazon Prime launches. • September 2006: music and video upload service. • November 2007: Amazon Kindle, November 2008, Free PackagingInitiative. • May 2009: Kindle DX sendee. • April 2010: The introduction of a new HQ strategy. • July 2011: The market value of $ 100 million. • February 2012: Launch of a sports store. • August 2013: Buy Washington Post.
 
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