Amazons Company Strategies and Customer Acquisition - Research Paper Example

Case Analysis of Amazon.com Brief description of Amazon.com Amazon Company was founded by Jeffrey Preston Bezos. He was working for a company known as Fitel (Bellomo & Elad, 2006). Jeff is the president and chief executive officer as well as the chairman of the board of Amazon.com. After he had made the journey across the country from New York to Seattle, he wrote the Amazon business plan which led to him setting up the original company in his garage. The history of Amazon.com dates back to the founder Jeff Bezos who had a vision to benefit his community (Boom, 2008). Despite him having a degree in computer science, he had a vision to build a network for international trade. In lights of this, Preston founded Amazon.com in 1994 as a website for international trading. Online Retailers and wholesalers as well as buyers and sellers met online globally. Amazon founders had a vision to become one of the world’s leading companies dealing with online trading. The management in Amazon.com sought to reduce negative environmental impacts as there was no physical contact between the traders. Amazon has operating earnings close to $52 million yearly. Amazon Company normally projects to make approximately $22 million to $2.2 billion within five years (World, 2007). Examining the business model they use, Amazon primarily switched to Linux as primary architecture. In addition, Amazon has lowered technology expenses by about 20%. However, the decision to lower technology expenses has not profited Amazon as projected. Company Strategies and Customer Acquisition Considering the pricing, the strategies have changed over time. Amazon has regulated the prices through several policies for example, introduction of frustration free packaging. This policy is an initiative that is designed to simply motivate the customers who purchase goods online at different times of the year. The customers feel motivated when they buy two products for the price of one. Another policy is the free packaging certification initiative for manufactures. Their products undergo free laboratory testing to acquire certification. As a result, the certifications on their products increase the value and enable sales at high prices. However, the pricing of products sold at Amazon.com tend to be high hence attracts the upper class society and several middle class persons. Amazon.com customers are mainly acquired through word of mouth through satisfied clients. More customers are venturing into online shopping due to the fact that it is environmental friendly and efficient. Most customers are parents who are purchasing gifts for their children and loved ones. Since Amazon began, it has existed under many models over the years hence adopting other models can work in its favor. However, this will affect the existing revenue steams. The major reason is the fact that obtaining new models will change the technology used. On one hand, when the technology costs increase, the main revenue stream will decline while on the other hand, when the costs of technology decrease, the revenue increases. Challenges and Opportunities facing Amazon.com Amazons major competitors are mainly online shopping websites. Some of them include LL Bean, Electronic trade & Onlineshoppers companies (Night, 2004). The advantage that Amazon has over its competitors is the reliability. Over the years, Amazon has existed selling their products to many customers. Shopping at Amazon has proved worthy over the many years of operation for online traders. One disadvantage is that a lot of competition has risen and the level of technology improved. In considering how Amazon.com has changed the trading industry, there is the belief that innovation has the power to change the world. It has raised interests to trade online (Grant, 2004). The requirement to begin trading online is the desire to shop in a whole new zone. Amazon is always searching for new ways to improve its efficiency on behalf of its customers as well as individuals who shop on trading websites. There are merchants who sell on its platform, developers who use the platform to create their personal business involving books, games and films. The online retailers have enjoyed mass benefits as their businesses continue to flourish. Subsequently, the profits gained by Amazon Company do allow expansion in terms of technology and staff empowerment. Since Amazon began, internal and external expectations have been met. Amazon did pave the way for other online companies to emerge and some have succeeded. The future opportunities of Amazon Company are plenty. Through its wide customer base, there is possible expansion to venture to other sectors of the internet trade. The efficient staff available at Amazon has taken the company to greater heights through innovation and effective handling of the customers. Major challenges that face Amazon are price consistency within the internet arising from similar businesses being established (Amazon, 2010). Another challenge that faces Amazon is the mismanagement of funds. The company acquires billions every year and unaccounted accounts hide millions for some self-centered individuals. STRENGTH The company has a strong financial base. The company produces high quality and certified products Fair pricing strategies. Good team effort and corporation. Provides reliable services WEAKNESS Limited in technology hence revenue decline. Large working force which led to unworthy traders selling unworthy goods. OPPORTUNITIES Making more profits from its growing customer base Possible expansion to venture to other sectors THREATS Presence of at least three strong competitors Price consistency for similar online products References Amazon planet. (2010).Amazon and our planet. Amazon and environment. Retrieved on June 2010 from http://www.amazon.com/b/ref=gw_m_b_corpres/178-9702731-4265124?_encoding=UTF8&node=13786321 Bellomo M. and Elad J. (2006) How to Sell Anything on Amazon and Make a Fortune McGraw-Hill Professional works. 366 pages. Boom C. (2008) Bestsellers: popular fiction since 1900. Palgrave Macmillan. 292 pages. Grant T. (2004) International directory of company histories, Volume 60. St. James Press. 672 pages. Night C. (2004) Patents, profits & power: how intellectual property rules the global economy. Kogan Page Publishers.. 202 pages. World O. (1997) Trade policy review: Brazil, 1996. World Trained Organization press. 211 pages. Read More