Is Amazons Strategy for Growth a Successful One - Essay Example

There are other products and services that were added which include Shops, sothebys.amazon.com, electronics, home improvement products, and many others. Their continued broadening of the spectrum is directly related to their goal of making customers find anything they want online.

• Size and Financial Resources

The huge market capitalization of Amazon.com enabled it to stage an aggressive expansion in the market through the introduction of several products and services. Websites were opened in several countries and are expected to continue by also forging partnerships with other internet service providers around the globe (Paavo, Arash, and Alain 2013). The amazon.com in United Kingdom and Germany are listed as the leading sites in sales. Amazon.com followed a strategy of developing software specialized to their type of business and acquiring commercially made applications.

2,461 million dollars worth of assets with inventories representing 7 percent of total assets was realized in 2002. This shows the strength of the company significantly in that year even before they had begun their expansion process in France and Japan.

Amazon.com Assets. June-2000 December 1999-96

The Amazon.com Commerce Network strategy basically leads the company to earn high revenues with high margins which is also risky provided it acts as a venture capitalist. The company reduces significantly the cost of goods sold by increasing their own distribution channels which allows to the company concentrate on its main focus which is customer service.

Ravi Suria an analyst at Prudential Securities Company was concerned Amazon was not generating good cash flow essentially because it was swiftly expanding from less than 10 million dollars in cash outlay. He also had a genuine worry about the reduced stock turnover of the company as it increased its distribution channels in 1999. Despite of Amazon being one of the largest online retailers, they had been able to hold on to profit making and had fallen in the eyes of the investors. (Rainer, Turban, 2008)

4.0 Conclusion

Amazon effectively shifted from its first strategy to becoming an online service provider where they help companies and individuals manage technical and logistical issues (Rainer & Turban, 2008). The introduction of The Amazon Kindle in 2007 resulted in a great surge in e-book sales by 400 percent compared to the previous year. 300 million e-readers were sold in estimation in 2009. Despite losing out its market share, Amazon reached a milestone within just three years from when Kindle was launched. (Steve W 2012). The flexibility portrayed by the company ensures that the company remains relevant by sustaining its growth and market share. (Steve W 2012)