Amazon was incorporated in 1996.

It aims at serving the consumers via its retail websites by

concentrating on selection, price and convenience. Programs are offered by the company to
facilitate sellers to sell their products on Amazon along with their own official websites. Its
mission, incorporating their core purpose of being customer oriented and designing all its
activities in line with its customers demands, is as follows: We seek to be the Earths most
customer-centric company for four primary customer sets: consumer, sellers, enterprises, and
content creators.

It focuses on maximum selection, price and convenience to customers as the point of

differentiation and hence is a source of its competitive advantage. Amazon believes in being
unique in terms of both strategy and service.

The company started off as an online store selling books only, and since then it has come a long
way. Successful results led it to diversify itself into new products and services. From a simple
online bookstore, Amazon went on to become a multinational e-commerce company and now is
the largest online retailer globally.

As of 2012 over 60% of its revenues were generated from the sale of electronics and
merchandise, while over 30% was from the sale of media. Media constituted of retail sales of
books, movies, and digital downloads, software and video games. Moreover its main drivers are
Kindle and e-Books. Major portion of the revenue is generated from electronics and other
merchandises which include sales of items not included in media. This is a less mature business
segment of the company. The fastest growing segment of Amazon is others, the revenues
generated are primarily from Amazon Web services.

The external environment in which the company operates is steadily moving into tablet
computing and cloud computing which is expected to generate $19.5 billion by 2016. With
changing environment, changes in consumer preferences are also being noticed. Consumer trend
is shifted more towards e-commerce and by 2016, the revenue generated from it is expected to be
$1 trillion. As far as government and economic factors are concerned. New tax figures are to be
implemented which range from 7.25% to 9.75%. World economy is also grew by 3.3% in 2012
which is favorable for Amazon as it will lead to greater sales potential and growth for the
company.

Current strategies that are adopted by Amazon focus on gaining market share. Currently it holds
40% of the market share of the industry but this figure is expected to continue to grow through
expansion by lowering the price of Kindle. Kindle is chosen as it has the capability to attract
more customers in e-Book, Application and Digital Content. Furthermore international expansion
is also on the companys list. Expansion in fulfillment and distribution centers globally are being
created to decrease shipping cost and time. New Kindle stores in Brazil, China, Canada and
Japan are being opened. Lastly, it is also acquiring other business segments like Zappos in 2009.

Currently the annual spending on capital expenditure has increased from $333 million to $3.8
billion. Moreover the sales has also increased 3 times the current sales figure. As the sales are
increasing, the costs associated with it are also increasing due to increased operating and other
expenses due to which losses are incurred in some quarters.

The industry in which the company operates in has many active participants, a few of which
include Amazon with market cap of $ 167, 1 million, eBay $76,4 million, Hutchison Whampoa
LTD $57,1 million, Netflix $27,2 million, Autozone $18,1 million and Bed bath & beyond with a
market cap of $14,5 million. Overall Amazon is leading the industry with the highest estimated
e-commerce sales and a market share of 39% which is way more than its greatest competitor
eBay (8%)

The future strategies Amazon plans on implementing include SMART innovation strategy which
is built around a market changing customer value proposition and a radical profit formula. This
strategy focuses on embracing transformational growth in its white space and finding new
customers i.e the IT community. Furthermore it also plans on becoming an original equipment
manufacturer.

Another strategy being thought on by Amazon is the dominant strategy which focuses on amking
Amazon modern days Sear and Roebuck. This strategy revolves around no tradeoffs, which
means substituting the word OR with AND, for example better selection and better prices to
add convenience.
Amazon Prime Air is another strategy Amazon plans on gaining advantage from. This strategy
believes that the future is now the people. Amazon Prime air is a drones which could carry
objects of up to 5 lb. (2.27 kg) within a 10 mile (16 km) radius of an Amazon distribution center.
The service is beneficial for the company by catering to a significant number of customers by
building distribution systems in an increasing number of urban areas.

To put it in a nutshell customers are looking for informations, recommendations, best value and
overall convenience. The viability of information now has reached serious demand and Amazon
continues to understand and innovate in this factor. This is the time when people are saving
money and looking for cheapest prices and quick delivery which Amazon can do extraordinarily
well.