Amazon.Com Essay Example

Amazon.com, Inc. is a leading “online retailer” in the U.S. It’s headquarter is located in Seattle, Washington. Amazon.com initially started as an online bookstore, but as the time passed, the company expanded its services and products, and started selling CDs, DVDs, videos, MP3s, video games, Android and Kindle applications, electronics, foods, toys, and jewelry. The company also started the production of consumer electronics in order to promote the business according to the latest developments of technology. Among the most important consumer electronics are Amazon Kindle, Fire tablets, e-book readers, Fire TV and phone. It is also one of the most important cloud computing service providers. Amazon is also involved in selling of certain low-end products such as USB cables under the brand AmazonBasics (www.amazon.com/AmazonBasics).
Consequently, with the expansion of the business, Amazon opened separate retail websites for the U.S., U.K. and Ireland, Canada, France, The Netherlands, Germany, Spain, Italy, Brazil, Australia, China, Japan, India, and Mexico. Amazon India also planned to offer music, video streaming, and movie to its customers in the near future (Sood, 2015). Amazon is also offering international shipping to some of the other countries for many of its products.

The history, development, and growth of the company over time

History of the company
Jeff Bezos was the founder of the company. Bezos was born in 1964, and studied at Princeton University. In the University, he studied Electrical and Computer Engineering. In the year 1986, he started working in a company, which was related to fiber optic. In the years 1990-1994, he worked for a Wall Street Company, D. E. Shaw and Co. However, Jeff Bezos quit his job in 1994 and moved to Seattle with his wife. There they worked together and developed a company as “Cadabra” with three computers in the garage of the rented house. Bezos renamed the company and it goes online with the name Amazon.com; the company’s name started with the first letter of the English alphabet, i.e. “A” (CAD, 2012), so that the name would form the top of any alphabetized list. Moreover, this name was also inspired by the name of the longest river, i.e. Amazon. Amazon.com was the first company to sell books online through the use of website.
On July 16, 1995, Amazon.com was officially inaugurated. The website got high number of visitors. With increasing number of visitors, Bezos started moving beyond the dream of selling books online. He started offering CDs, DVDs, and other such electronic devices. The website gets over 600 million visitors annually (Beynon-Davies, 2012). Finally, the company moved further and started selling a huge collection of things ranging from books to food and luxury items. This company also owns many other projects such as Zappos.com, Alexa Internet, Shop bop, Kongregate, Internet Movie Database (IMDb), The Washington Post, a9.com, and DPreview.com. It is also involved in content creation through Kindle Direct Publishing, Amazon Publishing, and CreateSpace (Amazon, 2015).

Growth as well as development of the company with the passage of time

Business plan of the company was very conservative as the company was not expecting profit for the first four to five years, which was a kind of “slow” growth. That slow growth resulted in complaints by stockholders, who were thinking that the company was not good enough for further investment. However, with the rise of dot-com, the company survived unlike many other e-companies. In fact, the company became a huge player in internet business (Spector, 2009). The company started selling products and services very near to the cost of the product and service, so that there would be more traffic to its various online destinations.
On May 12, 1997, Barnes & Noble alleged that Amazon’s claim of becoming “the world’s largest bookstore” was not right. Barnes & Noble noted that Amazon is not a bookstore but it is a book broker. However, the suit was settled out of court, and Amazon remained the largest bookstore (Reilly, 1997). Amazon.com started trading on NASDAQ on May 15, 1997 at a price of the U.S. $18 per share. Share price for Amazon fell from $106.70 in the end of 1999 to $15.56 in the end of 2000 (Fernández, 2002).
Even more, on October 16, 1998, Walmart sued Amazon alleging that the company had stolen some of the important secrets of Walmart by hiring former Walmart executives. Interestingly, this case also settled out of court, and Amazon started implementing internal restrictions. The company also started reassigning the former Walmart executives (Nelson, 1998).
In the year 2000, after receiving the complaints of shareholders about the poor performance of the company’s shares, Bezos started expanding its products further. He started selling different electronic products. Moreover, the company’s experience was helpful in moving further and informing its customers about products. Amazon.com started moving aggressively and started offering free delivery along with other partners such as Toys "R" Us, B & M, Circuit City, and some other companies. Overall, the most important objective of the company was to become the leading online store and it has worked to get this objective (Hill, & Jones, 2012). Eventually, the company showed its first profit of about $5 million on revenues of over $1 billion in the 4th quarter of the year 2001. This profit showed that the unconventional model of Bezos could get a good level of success (Spector, 2009). In 2011, Sales of Amazon increased 51% over the year and reached to $9.91 billion (Pepitone, 2011). The company also started using the power of customers by giving them an opportunity to earn money through affiliate marketing (Pinson, 2008).

SWOT analysis

SWOT analysis of Amazon shows its strengths, weaknesses, opportunities, and threats. Here, the SWOT analysis has been presented (Strategic Management Insight, 2013).

“The identification of the company’s internal strengths”

One of the most important strength of the company is its global recognition. Amazon.com has become the equivalent of guaranteed online sales and services in the eyes of customers.

The company has developed such a plan that can help in increasing the sales without affecting the costs on products.

Amazon is offering a huge number of products in a diversified manner and this is making it unique among companies. Moreover, the company is providing better quality products and services.
The company has expanded its roots to faraway places and its services and products are now available in different parts of the world.
Amazon.com has also tried to reinvent processes bringing new values and heights in its work.

“The identification of the company’s internal weaknesses”

Although the company has expanded its businesses a lot, still it has not come out of the complexity that can confuse customers. Moreover, it can also affect the business.

Company’s growth in the last five years is not that impressive.

The company is working on the strategy of offering lowest prices to its customers but now certain other forms of incentives are also working and the company has not yet applied many of them.
Amazon.com is offering free shipping to many parts of the world but this strategy is costly and is difficult to sustain.

The company is showing negative publicity.

“The nature of the external environment surrounding the company” – Opportunities
The company may have the option of certain other providers. It can utilize their power to increase the efficiency of services and sale of products.

With the help of Web Services, the company can further expand its services and reach potential customers.

With the growing use of internet in the world, the company has the option to reach more users in the foreign market.
The company can also work on its pre-sales option. In this case, users would try to get the product first-of-all and can pay good prices.

The company can excel with more physical presence.

“The nature of the external environment surrounding the company” – Threats
The company has to face the most important aspect of competition especially in the presence of other growing companies in the world as, for example, alibaba.com and aliexpress.com.

The company also faces the threat of online security.

The company may also face the inventory danger in which meeting the delivery date is crucial for successful business but products during the running cycles may run short.
For the past two decades, the internet has become a very important part of the life of customers. People find it easy to buy things from their homes. In this regard, companies such as Amazon.com are in continuous competition to meet the customers’ needs and their safety, and to provide them easy ways to purchase and even sell their products.

References

Amazon (2015). About Amazon. Retrieved from http://www.amazon.com/Careers-Homepage/b?ie=UTF8&node=239364011
Beynon-Davies, P. (2012). EBusiness: Palgrave Macmillan.
CAD. (2012). Historia de Amazon. Retrieved from http://www.cad.com.mx/historia_de_amazon_com.htm
Fernández, P. (2002). Valuation Methods and Shareholder Value Creation: Academic Press.
Hill, C., & Jones, G. (2012). Strategic Management: An Integrated Approach: Cengage Learning.
Nelson, E. (1998). Wal-Mart Accuses Amazon.com of Stealing its secrets in Lawsuit. Retrieved from http://www.wsj.com/articles/SB908569280112552500
Pepitone, J. (2011). Amazon sales jump 51% Stock surges. Retrieved from http://money.cnn.com/2011/07/26/technology/amazon_earnings/
Pinson, L. (2008). Anatomy of a Business Plan: The Step-by-step Guide to Building Your Business and Securing Your Company's Future: Out of Your Mind and Into the Marketplace.
Reilly, P. M. (1997). Barnes and Noble Sues Amazon Over Rival’s Book-Selling Claims. Retrieved from http://www.wsj.com/articles/SB863470993368690000
Sood, V. (2015). Amazon India may start offering music, movie and video streaming services in India. Retrieved from http://articles.economictimes.indiatimes.com/2015-01-02/news/57611321_1_amazon-india-amazon-prime-subscription-service
Spector, R. (2009). Amazon.com: HarperCollins.
Strategic Management Insight (2013). SWOT analysis of Amazon. Retrieved from http://www.strategicmanagementinsight.com/swot-analyses/amazon-swot-analysis.html