Amazon. Com: an E Commerce Retailer

Amazon. com: An E-Commerce Retailer

HEADING INTO THE SECOND QUARTER OF 2003, JEFF BEZOS, FOUNDER AND CEO OF Amazon.com, could look back over the last couple sets of quarterly numbers for Amazon.com and be proud. Under pressure from the financial markets to abandon the company's oft-stated goal of sacrificing short-term profits for building long-term growth, market share, and increased shareholder value, Bezos proved that his online retail business model could produce operating profits. Now that Bezos had that issue taken care of, there were a number of new ones that needed to be addressed. Outside the overall economic malaise of the U.S. and world economies, the Internet Tax Moratorium law was up for renewal in November, with no assurance of its being extended, and online stalwarts eBay and Yahoo! were expanding into Amazon.com's markets. Bezos was faced with the task of developing an effective differentiating enterprisewide strategy if Amazon.com was to survive and prosper against aggressive competition over the intermediate and long-term futures.

Amazon.com is considered to be the premier online retailer in the world. Although it originally started out selling only books, it has expanded into numerous other product lines, as shown in Exhibit 1. Some of these product lines include CDs, DVDs, and videos. However, in order to offer as large a product line as possible, Amazon.com has entered into contracts with numerous retail partners, such as The Gap and Eddie Bauer, to sell their goods through Amazon.com's web site. Some of these partnership agreements involve Amazon.com running another company's own web site. This type of partnership, known as "powered by Amazon," allows companies to use Amazon.com technology and patented web site capabilities, such as 1 -Click Ordering. Two well known retailers who have participated in this type of arrangement are Target and Toys 'R' Us.

Exhibit 1 – Product Categories: Amazon.com...