Amazon.com, Inc.

Strategic Management Process

Table of Contents
I.

STRATEGIC MANAGEMENT PROCESS.........................................2

II.

Executive Summary.....................................................................2
Highlights
Objectives
Firms Mission

III.

External Analysis........................................................................3
PESTEL Analysis
Summary of PESTEL
Industrial and Competitor analysis
Summary of the Five Forces
Competitor Analysis

IV.

Internal Analysis........................................................................8
Value-Chain Analysis
Financial Analysis
A graph would be good

V.

Summary of Analysis.................................................................10
SWOT Analysis
Key Strategic Implications
The VRIO Framework Amazon Resources

VI.

Strategic Choices......................................................................16
Business-Level Strategies Porters Generic Strategies
Corporate-Level Strategies
Recommendation

VII. Conclusion.............................................................................17
VIII. Appendix...............................................................................18

STRATEGIC MANAGEMENT PROCESS

Executive Summary
This strategic management analysis has been designed to analyze and evaluate Amazon.com, Inc.
and the industry that they compete in. To successfully accomplish this goal, two phases of
strategic management process - external analysis and internal analysis have been applied. This
analysis will help us to review Amazons worldwide business procedures and strategies.
Furthermore, we have defined the corporate and business strategy of Amazon to eloquently see
the Amazons current position and concerns which will face Amazons in the future. This depth
analysis will also include a recommendation for Amazon to continue enjoying their growth and
profitability.

Objectives
The purpose of the analysis is to study Amazons strategy in depth. In this project the focus is on
Amazon as a specific topic and strategic management class concepts have been applied for depth in
regard to Amazons current and future strategic position. The project analysis of Amazon is
structured as the following:
Amazons mission, vision, 10K general information with their current strategy
Amazons depth analysis and evaluation through internal and external environment
(Applied Andrews 1972 Strategy Process Model).
Implementation / Recommendation

Firms Mission
Amazon.com was founded in 1994 as an online bookstore by Jeff Bezos, who had a vision for
the company to go beyond this idea of online bookstore and become worlds biggest retail store.
The company was initially founded as an online bookstore that later transitioned to become the
worlds largest internet-based retailer. Due to its success, Amazon has diversified into other
product lines and services ranging from DVDs, video download/streaming, software, electronics,
clothing, furniture, and various web services that support governments and enterprises (See
Appendix 1: For Amazons Product Range Detail). Amazons mission and vision of
Amazon.com is stated as, To be earths most customer centric company; to build a place where
AMAZON.COM, INC. -

people can come to find and discover anything they might want to buy online. Their core
values are Customer Obsession, Ownership, Invent and Simplify, Are Right, A Lot, Hire and
Develop the Best, Insist on the Highest Standards, Thinking Big, Bias for Action, Frugality,
Vocally Self Critical, Earn Trust of Others, Dive Deep, Have Backbone; Disagree and Commit,
and Deliver Results.

External Analysis
By conducting an external analysis, a firm identifies the critical threats and opportunities in its
competitive environment. It also examines how competition in this environment is likely to
evolve and what implications that evaluation has for the threats and opportunities a firm is facing
(Jay B. Barney, 2010).

PESTEL Analysis
PESTEL analysis is a simple and effective model used in this situation to identify key external
(macro environment level) force to simply understand the big picture of the political,
economical, social, and technological issues that Amazon is operating in.
Political: In term of growth, online international regulations and policies are hampering the
expansion of Amazon (Amazon 2014 10-K). On the other hand, the internet is rapidly advancing
across the globe. This trend allows Amazon to access more markets, should they choose to
expand to that region. (In looking at Amazons situation from an international standpoint, for
example Chinas move on lifting up some of their e-commerce restrictions will give Amazon a
chance to grow and do more internet-based business.)
Even though Amazon has access to more markets while operating internationally, they face
obstacles from a political standpoint. Two of their biggest markets, China and India, place
restrictions on Amazon. These regulations restrict some investment and operation of the internet,
IT infrastructure, data centers, and retail, all of which Amazon operates their business in. China
and India also regulate internet content. If Amazon is found in violation of the regulations, their
company may face large fines or the closing of businesses in those areas. Though these
regulatory environments remain a challenge, trends are showing that countries are slowly lifting
strict regulations on e-commerce (Amazon 10-K).

AMAZON.COM, INC. -

Economic: There are economic headwinds that affect Amazon. Amazon operates in a large
portion of their business in the retail sector. This sector of the economy is cyclical and is affected
the US and global economy. If the US or global economy takes a large downturn, industry sales
will decrease due to less consumer spending. Due to Amazons exposure in this portion of the
economy, their financial performance may suffer during the period of economic contraction.
Social: Globally there are cultural factors in some countries that may affect access to the internet.
They are afraid that Internet may damage their cultural, ethical, or religious beliefs.
Additionally, there are social factors that affect how consumers shop. There are many consumers
who prefer a more physical shopping experience in which they can see, feel, or try the product
before it is purchased. Amazon offers pictures, which are not nearly as good as being able to
shop in a physical store, in which you can handle and inspect the product before you buy.
Reviews from customers who have bought the product help in this area, but still do not make up
for shopping in person. Many consumers also like to shop with friends or family. This social
aspect of shopping is lost when shopping at online retailers.
Technology: Amazon has been successful internet-based retailer through technological
advancements. As Amazon continues to use their current business model success, which looks
promising for them, since internet is evolving every day, and more people around the world have
access to internet through mobile devices and tablets in which Amazon can offer competitive
prices and win consumers globally. They have been able to leverage technology to advance their
business. This started in 1995 by utilizing the internet to launch their retailing business. This
use of technology continued with up rise of tablets and cell phones. They developed apps for use
in these mobile platforms, which made the convenience of e-retailing even more convenient for
consumers. However, they are still forced to find more innovative methods to surpass their
competitors.
In addition to using technology to build their business, they also must use the latest in
telecommunications communications to keep their business up and running. Therefore, the need
sufficient capacity on their servers in which millions of customers can access their website
without causing a service interruption. They must also have enough capacity and speed in which
their enterprise customers are able to access their files, databases, analytics packages, and
applications. Additionally, they must have built in redundancies in connections from their sites

AMAZON.COM, INC. -

to their internet service providers so there are no interruptions of services which would
negatively impact customers and the operations of Amazon.
Though Amazon has used technology to their advantage, technology can also be used them in a
malicious manner. Currently there are millions and millions of cyber-attacks that occur across
the world every day. These crimes range from stealing consumer information and credit card
numbers to corporate espionage. Due to the fact that Amazon is one of the largest retailers in the
world, in addition to a premier web services provider, they are a prized target for hackers. They
must defend their networks, servers, and consumer information in order to retain the trust of their
consumer and enterprise customers, and protect their proprietary competitive information.
Environment: Due to the nature of Amazons business, which is internet based, there are few
environmental concerns that need to be addressed. There are no hazardous waste products that
need to be disposed of as in many manufacturing processes, thought the products they sell may
utilize techniques which may be deemed hazardous. There are a few things that Amazon uses a
lot of: cardboard, plastic and paper package filler, and tape. Each of these products do have their
accompanying environmental concerns. Cardboard is created from wood, which means trees
have to be cut down to produce it. The same is true of paper package filler. Plastic package
filler and tape both use oil as an input for their production. Additionally, plastic is not readily
biodegradable, which means it ends up in landfills, as litter on land, streams, and oceans.
Legal: Amazon is currently subject to, and will continue to be subject to, a constant stream of
litigation from other companies or parties that claim Amazon is infringing on their proprietary
rights. Among the current lawsuits are Big Baboon for third party payment systems, Walker
Digital for product pairing that offers competing or supplemental products and a class action
lawsuit for selling MP3 files without the proper mechanical licenses (Amazon 201410-K).
A major case was brought before the US Supreme Court who decided it was not Amazons
obligation to collect state and local sales taxes. However, many states and localities are have, or
are considering adopting laws that require out-of-state retailers to collect sales tax on their
behalf. These laws add complexity and costs in conducting their business across the nation.

AMAZON.COM, INC. -

Industrial and Competitor analysis

Harvard professor Michael Porter developed an industry analysis framework, called the Five
Forces model, which categorizes five different types of forces acting on industries. The Five
Forces model can be used as an adjunct to the PESTEL analysis in this Amazon.com project to
study how various forces are shaping the market, what changes one can anticipate as a result, and
what strategies can be used to mitigate (or take advantage of!) the forces (Marketing Plan Where
Strategy Meets Action, 2012).
Threat of new entrants: For e-commerce companies like Amazon, a threat of new entrants is
always going to be present, but at this moment no competitor has the experience, skill, or scale to
be a serious threat to Amazon and their business model. Also, there will be competition and other
retail business will enter into the internet-based business, but as of now threat of new entrants is
moderate. Amazon, through its constant innovation, brand image, domain experience, economies
of scale, and superior customer service, is able to differentiate itself and become a market giant,
which is difficult for new companies to compete with.
Bargaining power of suppliers: There is a low level of bargaining power which any one
supplier has over Amazon. The major reason is that amazon has tens of thousands of suppliers in
which they can purchase the inventory in which they plan to sell.
Bargaining power of buyers: The buyers of Amazons products and services have a very low
level of buying power. This is due to the fact that there are millions of retail consumers and
enterprises that do business with Amazon. Therefore, if one buyer wishes to try and change
prices on Amazon, there are millions of people that will not go along with the change. To effect
change on a company such as Amazon, buyers would have to band together in extremely large
quantities to effect change.
Developing of substitute products or services: Threats of substitutes in Amazons business
case are high as their customer have an option to purchase goods through Amazon substitutes as
the service Amazon is providing is not unique and has close substitutes such as retail outlets.
Also, most substitute service providers have now entered developed an e-commerce model as
well.

AMAZON.COM, INC. -

Rivalry among competitors: Although rivalry is fierce within in the online retail industry,
Amazon has the advantage of being the first large company to shape the e-commerce industry.
This has given Amazon some level of tranquility, but Amazon constantly innovates to be a
market and technology leader in the e-commerce industry. Also Amazon is able to develop great
loyalty amongst its customer through its customer service program.

Summary of the Five Forces

Amazon was established around 20 years ago as an ecommerce solution, over the past years
amazon has grown into the world's biggest online retailer with a Market Cap of $310 billion.
Although the online retail industry has fierce competition, Amazon has been able to overcome
these disadvantages and use them in a way that benefits them. Amazon through constant
innovation and great customer service has able to create differentiation and brand loyalty
amongst the customers through which they will remain the favorites amongst the customer of
online retail industry.

Competitor Analysis
The competition is quite intense in the online E-commerce market as the
barriers of entry in the market are low but Amazon.com through its constant
innovation are able to create a high brand image in the eye of the customer.
Amazon is able to create more value for their products in the eyes of
customer then its competitors. Amazons ability to be flexible and enhance existing
products, processes, and services has given it a competitive advantage over other online stores in
the market. They are also able to exploit their resource better than any of its other competitors.

Internal Analysis
Whereas external analysis focuses on the environmental threats and opportunities facing the
firm, internal analysis helps a firm to identify its organizational strengths and weaknesses. It also
helps a firm to understand which of its resources and capabilities are likely to be sources of
advantage and which of them are less likely to be sources of such advantages (Jay B. Barney,
2010).

AMAZON.COM, INC. -

Value-Chain Analysis
One way to identify resources and capabilities that have the potential for creating competitive
advantage for a firm is to engage in value-chain analysis (Jay B. Barney, 2010). Amazons
value chain is consists of factors based on customer value and operational efficiencies. The value
chain analysis of amazon examines the operational effectiveness of activities that enable Amazon
to perform better than its competitors. Amazons value chain allows Amazon to add value to its
services and maintain a competitive advantage over its competitors.

SupportActivities
Administrationand

AmazonAdministrationandManagementareinvolvedin
FinancialPlanning;Timeplanning,VisionCreation,Project

Management:

ManagementandCommunicationwithinAmazon.
Amazonoffersemployeesuniquebenefitssuchasmedical,paid

HumanResources:

timeoff,stockgrants,andrelocationallowances.Thejobof
humanresourcedepartmentistodevelopplansandRecruit
qualifiedpersonnel,Teambuilding,Training,Motivate
EmployeesandStaffPlanning.
Technologydevelopment:

AmazonBeingintheonlineEcommerceMarketspendshigh
amountofmoneyintechnologicaldevelopment.Thisgives
Amazonanopportunityfordigitalsalesofmusic,books,and
videosEtc.Amazonisalsoinvolvedincreationofnewsoftware
tohelpintheproductionprocessorreengineeringtheircurrent
processes.AmazonSpendsalotofmoneyonR&Dofproducts
thusamazontriestostayasanearlyadopterontechnologyS
curve.
PurchasingRawMaterialandotheritemsusedintheoperation.

Procurement:

TheseIncludeComputers,Servers,DataCentres,DataFarms,
Licensingetc.
PrimaryActivities
Inbound

Operations

AMAZON.COM, INC. -

Outbound

Marketing&

Services

Logistic

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Inbound
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istobethe

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Similarproducts
interactively.

AMAZON.COM, INC. -

Financial Analysis
A graph would be good
-

(Revenue to Cost of Sales) - Net Sale? Increase or decrease? From whatever year to

2015?
Revenue and retained profit
What is the trend: Good or Bad?

Summary of Analysis
SWOT Analysis
The external and internal analyses steps of the strategic management process parallel the steps in
SWOT analysis. SWOT analysis an acronym that stand for strengths, weaknesses,
opportunities, and threats focuses attention on both the internal and external attributes of a
firms strengths and weaknesses (Jay B. Barney, 2010). Through this SWOT analysis Amazons
current position is been summarized in term of market and its capabilities with the internal and
external changes of the business environment.

AMAZON.COM, INC. -

10

- Brand is globally recognized

- Customer-Centric Business
- Strong business model
- Wall Street Support
- Information and Logistics
- Innovation and research

- Cost Structured
- Online presence only
- Strong reliance on US market
- Low entry barrier
- Shipping takes several days

SWO
T

-Kindle
-Growing e-commerce sales in new markets
-Faster delivery using drone technology
-Electronics innovation
-Media

- Government regulations
- Policy changes
- Market competition
- Inventory control
-Litigation

Strengths
Opportunities

Weaknesses

Threats
Key Strategic Implications
Amazons model of continuous innovation has expanded both its business and corporate level
strategies. In answering the question, How will we compete? Amazon could answer, We will
compete online, in the cloud and in the stream (streaming). In answering the question, What
business we are in? Amazon could answer, Wait, were still working on that. . .
Amazons fluid corporate strategy has been the source of its growth. As is noted above, Amazon
built on its origins as an online book seller by using that platform to sell other products both
domestically and internationally. It continues to grow internally by expanding from selling
others content to producing and selling its own, such as the Amazon Echo and the Kindle line of
products that were low-cost alternatives to the Nook and the iPad. These products are so popular
that Amazons own competitors carries the products in their brick and mortar stores.
They strengthen their internal and external growth by building key alliances with supplier
organizations. Amazon has grown externally through several key acquisitions, the most recent of
AMAZON.COM, INC. -

11

which includes Twitch TV, the world's leading video platform and community for gamers.
Currently, Amazons primary revenue stream from Twitch is advertising revenue from the ads
that run on each online session. Given that this site boasts more than 55 million unique viewers,
this could be a major source of revenue and a large platform from which Amazon could advertise
its own products. This easily justifies Amazons purchase of Twitch for almost $1 billion.
Likely, the most profitable of its acquisitions was Kiva Systems in 2012. Kiva Systems, now
known as Amazon Robotics, created the efficient systems that are responsible for picking,
packing, and shipping items from its warehouses to its customers. This unique system provided
Amazon a valuable and rare resource to help keep prices low, at the same time improving
customer satisfaction in the receipt of ordered goods (New York Times 9-1-14).

Amazon, like all other innovative companies, experience wins and losses with product and
service development. Amazon finally cut its losses after almost five years with Endless.com, its
specialty shoe and handbag online store. The Amazon phone has had a very underwhelming
performance to date. However, its new strategic alliance with the United States Postal Service
(USPS) for Sunday delivery will result in a faster delivery for products that Amazon sells.
Amazon Studios was created to supplement its Prime Instant Video offerings for which it began
offering its own content. In January 2015, its original show "Transparent," starring Jeffrey
Tambor as a transsexual dad, won two Golden Globe awards (Oregon Live, Amazon Timeline).

AMAZON.COM, INC. -

12

One of Amazons key strategic issues is whether they will continue to be the low-cost leader in
most of its product and service offerings. Prime membership started at $79 and is now $99. The
student price is $49 and the Prime Fresh membership is $299. How much more of an increase
will its customers bear when two-day shipping demands are not met, as has happened recently on
occasion?
Another issue to be considered is as Amazon grows and continues to increase its market share
and increase the financial performance, it surely encourage increased competition. While some
of its competitors have avoided a direct head-on competitive fight by shifting their competitive
strategies as Barnes and Noble (B&N) has, other competitors that have longer histories and
greater resources may not. Whether Amazon can effectively and successfully combat its larger
competitors on a price, product and service long-term is an issue that should be considered by its
CEO and its Board.

The VRIO Framework Amazon Resources

One of Amazons major competitive advantages is its ability to be flexible and enhance existing
products, processes, and services. They exploit this resource better than any of its other
competitors. Amazon was not the first to offer memberships to its customers and potential
customers but has exploited that resource to include more services and discounts that its
customers find valuable as Amazon Prime.
Prime membership creates a sustained competitive advantage by allowing the membership
access to Amazons various key product offerings and services in competition with similar
business in several industries. The annual fee charged to its potential and existing members
provides free premium shipping of products purchased through Amazon, access to the Kindle
lending a library of e-books, streaming of TV/movies, unlimited access to music that is ad-free
from hundreds of Prime Playlists and more than a million other songs, free cloud storage of
photos, discounts at its online grocery store and more. This is not your Sams Club membership!
The Prime membership competes and wins as a low-cost leader against retail stores such as
Walmart and Target. The Prime service provides its members with premium free shipping of
products purchased through Amazon (two-days or less in the contiguous U.S. and other shipping
benefits including tracking). Amazon was testing to introduce the Prime Air shipping (drone
AMAZON.COM, INC. -

13

deliveries), which was basically placed on hiatus pending drone regulations by the FAA. When
Amazon successfully navigates these regulations, they will be in direct competition with these
shippers, at the same time, still continue to use them as suppliers. Amazon prime membership, in
competition with Apple, Netflix, Sirius, Walmart, and B&N allows its members access to
unlimited movies, TV and music content for free and provides access to their own library.
Each of its competitors in the media charge a monthly fee for their services.
Meet the Amazon Echo. Introduced late last year, the Echo is a wireless speaker and voice
command device. Alexa, the voice behind the Echo, answers questions, plays music, reads the
news, checks sports scores or the weather. Amazon takes advantage of its cloud database to
service this device. It is not the first of its kind, nor is it the smartest on the market--see Siri and
Google Now. With recent enhancements in the past few months, it can perform some commands
such as turning off the living room lights.
In addition to Amazons promotion of this product, it is getting raves from technology media as
the darling tech product of 2015. It is open-sourced so that it may be improved on by Amazon
and others. PC Mag says, It's an innovative, useful home companion, and will likely only
continue to improve with time. (PC Mag)
Amazon gained the first mover advantage for the 21st century e-reader (Kindle) with an
electronic delivery format and was able to successfully exploit this product even after Barnes and
Noble (B&N) introduced the Nook with visual improvements over the Kindle. B&N followed
two years after the Kindle but it was too late. B&N gave free reading content to any that came
to their brick and mortar stores by way of Wi-Fi. This was little more than a ploy to get
customers in their stores.
However, this was not a sustainable advantage for B&N since one of the key features of the ereader is the ability to gain access to books without having to physically go to a bookstore or
library. Customers were willing to pay for the convenience. Once the technology was available
to gain access to books from stores and libraries, B&N lost its temporary advantage and Amazon
regained its place.
http://www.npr.org/templates/story/story.php?storyId=114115466

AMAZON.COM, INC. -

14

Product/Service

Valuable

Rare

Costly to
Imitate

Exploited by
Amazon

Strength

Prime Membership

Yes

Yes

Yes

Yes

Sustained competitive
advantage

Large Variety of
Inventory

Yes

No

Yes

Yes

Competitive advantage

Cloud Service

Yes

Yes

Yes

Yes

Strength

Echo (Voiceactivated device)

Yes

Not
really

No

Yes

Temporary competitive
advantage

Kindle

Yes

No

No

Yes but . . .

Competitive parity

Audible.com

No

Yes

Yes

Yes

Sustained competitive
advantage

To improve on its core competency of being a major book seller, Amazon acquired Audible.com
in 2008. Audible is a seller and producer of spoken audio entertainment, information, and
educational programming on the Internet. Audible sells digital audiobooks, radio and TV
programs, and audio versions of magazines and newspapers. Through its production arm,
Audible Studios, Audible has also become the world's largest producer of downloadable
audiobooks. It operates on several platforms, including Android, iOS, Mac OS X, Microsoft
Windows, Kindle, Windows Phone, which provides access to a wide-variety of users.
Amazon is not the only online store but is one that carries and has access to an unprecedented
amount of inventory, a large variety of products and a growing number of services. Combined
with the prime membership shipping features, Amazon has become the number one vendor of
choice for one-stop shopping of most items. Extreme warehousing and storage costs prevent this
AMAZON.COM, INC. -

15

resource from being imitated by many others. Amazons strong supplier relationships also
prevent ease of entry into the online commerce business.

Strategic Choices
The strategic choices available to firms fall into two categories: business-level strategies and
corporate-level strategies. Business-level strategies are actions firms take to gain advantages in
a single markets or industries. Corporate-level strategies are actions firms take to gain
advantages by operating in multiple markets or industries simultaneously (Jay B. Barney, 2010).

Business-Level Strategies Porters Generic Strategies

For Amazons business level strategies and how they are able to enhance its competitive
advantage as an internet-based marketplace and multi sellers, Porters Generic Strategies
Framework have been used (See Appendix 3: for Porters Generic Strategies in regard to
Amazon.coms position within those strategies).
The model we learned from Dr. Rutherfords lectures, is a very useful tool to use in regard of
Amazons business model and its market strategy. By looking at Porters Generic Strategies, we
notice Amazons strategic vision have created competitive advantage for Amazon.com and they
have been able to benefit extensively from all the three generic strategies, including low cost
leadership, customer differentiation and focus. In regard to first strategy, low cost leadership is
pursued by Amazon.com through differentiating itself primarily on the basis of price. According
to Jeff Bezos, CEO Amazon, we will be a company that work to charge less which means they
are a company that is focused on low cost leadership compare to their competitors. Amazon has
a massive warehousing facilities and processing capabilities, which give it physical economic of
scale, which in return gives Amazon cost advantage over its competitors. Amazon.com is also
pursuing a focused differentiation strategy by concentrating on the groups of customers who
want to buy unique and distinctive designs, and qualities over the internet. Last, but not least
Amazon also uses focus strategy to maintain sustainable competitive advantage in the online
market through outstanding customer service as a niche. Their focus on customer experience,
Customer Obsession as they focus on online marketing channels.
Amazons objective is to become the best place to by, find and discover any product or service
available online. Their goal is to continue to enhance and broaden its brand, customer base and
AMAZON.COM, INC. -

16

electronic commerce expertise with the goal of creating customers preferred online shopping
destination, in the United States and around the world (Amazon.com, Inc. 10-K). Their online
superiority comes from their ability in attracting customers around the world by giving them
option to shop online for a wide variety of products such as retail goods, consumer electronics,
digital content, and many more.

Corporate-Level Strategies
Amazon corporate level strategy was to become Earth's most customer-centric industry. Their
corporate level strategy is clearly stated in their mission statement as, To be earths most
customer centric company; to build a place where people can come to find and discover anything
they might want to buy online.

Stock and Financial Highlights

In reviewing the stock price chart, it is obvious that Amazon has had tremendous success. When
compared to the S&P 500 over the same time period, you can tell that Amazon has greatly
outperformed the index. The S&P has doubled in price in the time period while the stock price
of Amazon has grown over tenfold! It is also useful to compare Amazon to another company
that competes in the same industry. If
you asked a group people who they
thought was the biggest retailer was,
you can be sure that many would
mention Walmart and Target. Without
doubt, both are huge players within the
industry. As of early December 2015,
Walmart has a market cap of $190
billion while Target has a market cap of
almost $45 billion. Amazon is bigger
than both companies combined with a
market cap of over $310 billion! The future of the company also looks bright. Amazon.coms
stock performance in the coming year as of this year look promising, the consensus forecast
among 44 polled investment analysts covering Amazon.com, Inc. advises that the company will
outperform the market (Appendix 2: Consensus Recommendation, 2015).

AMAZON.COM, INC. -

17

Recommendation
1. Amazons position and sustained growth
2. What strategy are we recommending for future growth or expansion?
Amazon should continue to acquire or Merge with Companies which amazon has
synergies with the organization. It should go for both Vertical and Horizontal
Integration's. Amazon using the integration as a strategy can pursue relationship with
authors and make more profit using the E-book model. Authors traditionally were at the
mercy of the publishers but with the new e-book model amazon can come into the
publishing business by allowing authors to publish their book as an E-book with
Amazon. This will allow Amazon to take out the middleman and allow both to earn more
profit.

Amazon should try to get into new emerging market such as Nepal, Indonesia, Pakistan
Nigeria and other countries where amazon is currently not operating. Rocket Internet a
German based company is already using the current model of amazon under the name
of daraz.pk within Pakistan. Rocket internet and other groups operating within new
emerging market are able to earn decent profits within these developing countries, Also
there is less competition within these new emerging markets. Amazon should also
diversify its portfolio by investing different businesses and promising start-ups. This will
help amazon to generate finances from different sources of business while investing in
AMAZON.COM, INC. -

18

the next big thing.

Conclusion

AMAZON.COM, INC. -

19

Appendix
References

PLEASE USE THE PROPER MLA CITATION FOR ALL REFERNCES!!!!!!!!!!!!!!

1.

http://www.nytimes.com/2014/09/01/business/media/amazons-bet-on-content-in-a-hub-for-

gamers.html
2.

http://www.forbes.com/sites/greatspeculations/2014/08/28/how-twitch-fits-in-amazons-

strategy/
3. http://www.businessinsider.com/chart-of-the-day-amazons-biggest-acquisitions-2014-8
4. http://www.oregonlive.com/window-shop/index.ssf/2015/07/amazon_timeline.html
5. http://www.fool.com/investing/high-growth/2014/02/12/challenges-to-amazoncoms-growthstrategy.aspx
6. http://www.pcmag.com/article2/0,2817,2476678,00.asp

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