Amazon Evolution

Amazon evolution

Jeffrey P. Bezos, a former hedge fund techie, founded Amazon.com® in 1995. Post inception, the site has expanded to a household name and one of the largest online retailers (Hof, 2006). After the years of success in the online retail realm Amazon has expanded into many other technology-based services, as they were only using 10% of their processing capabilities at any one-time (Rainer & Turban, 2008). Whereas e-commerce will always remain as the steadfast roots of Amazon, they continually push their limits in the e-commerce world.

Maintaining Internet retail

According to an article titled International expansion of e-retailers: Where the Amazon Flows by Rajesh Chakrabarti and Barry Scholnick the key to survival for Amazon is to expand in one or two ways, expanding across product lines and international expansion. Although Amazon is a superior store, it fails to compete with the leading Canadian online book retailer (Chakrabarti; Scholnick, 2001).

Amazon believes that e-commerce saves customers money and time. Using the Internet to create value for its customers will help the franchise endure even in large established markets. Amazon has survived by obsessing over their customers, providing customers with low prices, reliable delivery, in-stock position on even obscure and hard-to-find items (Chakrabarti; Scholnick, 2001).

According to a letter to its shareowner; from 2009, Amazon’s net sales increased 28% year-over-year to $24.51 billion in 2009, this was 15 times higher than net sales 10 years ago. Amazon added 21 new product categories around the world in 2009 including automotive in Japan, baby in France, and shoes and apparel in China (Bezos, 2010).

In reviewing the letter to Amazon shareowners, it does not seem as though Amazon is trying to move away from its core competency of being the leading online retailer, if anything they are simply using the resources already available to them to expand their realm. According to the letter...