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Bus 508 Assignment 2 Amazon com E-Business






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Bus 508 Assignment 2 Amazon com E-Business Model”
BUS 508 Contemporary Business
Amazon’s E-Business Model
Amazon has broken ground on a new way of doing business. They have
become the leader in their industry online and continue to lead the way
in innovation and technology. To understand a bit more about the
workings of this company and to discuss some key facts about why
Amazon is where they are today, this paper will emphasize four key
topics: Growth and Diversification; To Split or Not to Split; Can Barnes &
Noble or Borders Keep Up; and Online Only. After review of the topics,
one will be able to clearly see why Amazon is a company to model.
Growth and Diversification (Discuss the pros and cons of Amazon’s
growth and diversification of business and specialization, and make
recommendations about what Amazon could have done differently.)
When asked to discuss the pros and cons of Amazon’s growth and
diversification of business and specialization, one finds it difficult to
criticize Amazon for anything they have done so far. Amazon is leading
the way in terms of growth and diversification. Amazon has a solid
business plan and mission statement in place which they strive to
adhere to at all times and at all costs. Jeffrey Bezos, founder and CEO
of Amazon, is straight-forward in his approach to the shareholders as
well as his customers, employees and business partners.
Mr. Bezos initially began his company in 1994 with a business plan that
initially “was unusual: the company did not expect a profit for four to five
years. Its "slow" growth provoked stockholder complaints that the
company was not reaching profitability fast enough” (Unknown, 2011).
Bezos stuck to his guns by insisting that profit was not the main focus in
the early years. Eventually, in late 2001, the company saw its first profit.
In the meantime Bezos took a lot of heat for his “unusual” approach to
his business plan. This was an area that could have been listed as a
definite con, except for the fact his plan actually worked.
Another genius idea from Bezos that could have been viewed as a con
in the early phases of the development of Amazon, was to hire former
Wal-Mart executives to help launch his business. Through their expertise

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and experience working with the most successful company today, the
executives brought initiative, ideas for growth and diversification, and a
go get ‘em attitude. However, Bezos found himself in trouble for his
genius ability to woo former Wal-Mart executives; he was sued for
allegedly stealing trade secrets from Wal-Mart (Unknown, 2011). All in all
after a settlement was agreed upon out of court, Bezos again came out
on top.
Speaking of on top of things, Amazon continually utilizes all the latest
computer science research and technology to gain an upper hand at
conquering the most up-to-date business practices. According to Bezos
in his 2010 Annual Report, his team leads the way for development of
newer and better ways to handle the continual growth of Amazon. In
fact, Bezos reports that, “[T]echnology infuses all of our teams, all of our
processes, our decision-making, and our approach to innovation in each
of our businesses. It is deeply integrated into everything we do” (Bezos,
2011). Because of this philosophy, Amazon is able to sustain its growth
and is able to be so diverse in all of its transactions and dealings. The
future only looks bright for this company as they expand their services,
ideas, and products to the world. The only recommendation for this
company is to continue to do what they do and continue to put their
employees first in order to serve their customers in the best possible
To Split or Not To Split (Determine the impact if had split up
and become a family of brands (for example, “Amazon” for books,
“Supertoys” for toys, etc.), each with a different public face but all run by
the same parent company.)
It is all in the name. This is a key strategy for recognition, profits, solid
customer base and reputation. Amazon probably would not be as
successful today if they had originally split up their products and sold
them under separate names, family or not. Referring to an old acronym
K.I.S.S. meaning keep it simple stupid, this was the best play for
Amazon to adhere to when they entered the market with their dreams of
becoming the largest and best retailer online. Amazon already had to
change their name when they were first started out in 1994 from
Cadabra, Inc. to Amazon “when it was discovered that people
sometimes heard the name as “Cadaver” (Unknown, 2011). Amazon
could not afford to make any mistakes in their ventures because they
were already treading into unknown territory by expanding into so many

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markets online, therefore it was not only strategic but also wise to keep
Amazon as a whole under one name.
There are other successful giants out there such as Wal-Mart and Target
that specialize in selling many products and brands to the masses.
These companies are where they are now because they followed their
business plans and goals. They set out to deliver a service of providing
their goods to the general public at locations throughout the country and
eventually the world. They did not initially try to capture the market by
splitting up the brands and products and selling them at individual
stores. Those stores already existed as the “mom and pop” stores or
specialty stores. As it is today, Wal-Mart nearly devastated the specialty
stores because of their buying power and the smaller stores just couldn’t
compete. Amazon has taken the route of Wal-Mart except in the virtual
world of online business. They have a bright future keeping all products
sold under the highly recognized name they created for themselves,
Can Barnes & Noble or Borders Keep Up (Determine if it would be
possible for Barnes and Noble or Borders to extend their markets in the
same way that has. Explain your rationale.)
Borders unfortunately will not be extending their markets as has done with their successful business. July 21, 2011
headline reads from The Daily Ticker on Yahoo! Finance, “Another
Retailer Bites the Dust: Borders Doomed by Amazon Deal.” The article
goes on to point out several key reasons why Borders will close 400
stores and let go over 10,000 employees within the next two months. It
is noted that Borders held too much debt, made poor choices in having
too many brick and mortar stores open in this economy, was too late
getting into the e-reader market and the largest mistake Borders made
was to relinquish their online business to Amazon (Curtin, 2011). Retail
expert Howard Davidowitz states that when Borders sold out their
biggest asset (online sales) to Amazon, it was the worst business
decision Borders made: “[T]hat move finished them off because they
gave away the future” (Curtain, 2011). With the obvious now stated that
there is no future for Borders, the question becomes is it possible for
Barnes & Noble to expand in the way Amazon has?
The only way in the immediate future Barnes & Noble would be able to
extend their markets any more than they already have is if Amazon buys

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