To sustain this new venture, Amazon Inc. has a good start off, as its traffic is attractive to buyers and sellers into Amazon market place. Firms likely to be acquired in this endeavor include Diapers.com, Zappos and Soap.com.
Amazon intends to buy Quaidis, the parent company to Soap.co and Diapers.com for $540 million. The capital that was collected to fund this acquisition amounts to $78 million. In another strategy for up its competition with CPG companies, Amazon Inc. intends to acquire Zappos at a projected price of $1.1 billion. To compete with Google and Apple, Amazon Inc. intends to upgrade its Kindle to support mobile phone applications and functions. This will enable the incorporation expand from just providing physical goods to digital goods. The low margins strategy has been employed by Amazon regardless it is downcast by other companies. Amazon is offering its products and services at low prices as a strategy to attract more customers and increase its market share. This is a strategy aimed at increasing value to customers rather than increasing its value through high prices and high profits. Increased market share will see Amazon reduce its costs through economies of scale, as the costs will be spread through many customers. For instance in 2011, Amazon had operating expenses of 91% expressed as a fraction of revenues. This demonstrated its big market share compared to Walmart. Amazon had revenue streams of up to $48 billion. Most of this is attributed to online retail store where it has managed to attract millions of shoppers and sellers to its website. This has led to a cost advantage for Amazon in relation to Walmart and Costcos. Amazon has grown from just a book retailer to be the largest online retail shopping for physical and digital goods and services. This has not stopped the company from further growth and development. The company is seeking to contract Google, which will see it use the Android technology. Although Amazon and Google are market rivals, Amzon seeks to cross the gap between the two and build its new devices on the Android operating system. 8. Implementation strategy: From a range of reasonable options (build or “go it alone” strategy, partner via a joint venture or less formal business alliance, license, minority investment, and acquisition), indicate which option would enable the acquiring firm to best implement its chosen business strategy. Because of the nature of the course, you must indicate that an implementation strategy involving an acquisition is preferred to the other options and why. An acquisition is the best strategy for implementation. The acquiring firm’s stands an advantage of running a business that is well established compared to building up a new business. With an established business, the acquiring firm can use the existing financial records to forecast future performance to determine if the new firm to be acquired is profitable. This is not the case with a new firm being set up. Setting up a new firm may require more capital and time. The business’ future performance may not be correctly forecasted because there are many unseen occurrences, as the business has no experience. Partnerships on the other had result in legal disputes, as the partners are likely to disagree on decisions and business issues. Acquisition remains the