Amazon Analysis

AMAZON.COM GOING PUBLIC

The Concept:

Amid the chaos of Silicon Valley and the dot.com boom came a revelation that projected annual web growth at a whopping 2300 per cent. Growing weary of working for a wall street investment bank, Jeffery Bezos saw an entrepreneurial opportunity in the fact the usage of the internet was growing enormously, and every year tens of millions of new users were becoming aware of its potential uses. Bezos drew up a list of 20 products that could be sold on the internet. He narrowed the list to what he felt was the five most promising: compact discs, computer hardware, computer software, videos, Books. Bezos eventually chose books, for his entrepreneurial ambitions. He chose Books due to the large worldwide market for literature, the low price that could be offered for books, and the tremendous selection of titles that were available in print. His vision was an online bookstore that could offer millions more books to millions more customers than a typical traditional mortar and bricks bookstore (like Barnes and Noble, Boarders). He called it “Earth’s Biggest Bookstore”. Amazon.com, a creative synthesis of Jeff Bezos’s background in computer Science and entrepreneurial drive, opened its “doors” in July of 1995 in Jeff Bezos’s 400-square-foot garage.

Amazon.com took off and started growing rapidly because they presented a Business model which appealed to both publishers and customers, and was outside the boundaries of traditional booksellers. They redefined the way bookstores sold its books. Unlike traditional booksellers (Barnes and Noble, Boarders), Amazon.com presents customers with a broader selection of titles, lower prices, value added content, customer interaction and personalized services, all in the convenience of your home. Authors benefit by getting their books, which otherwise might not be widely distributed, in readers’ hand. Publishers are also able to avert the high costs incurred due to their return policies. Rather than...