How has Amazon grown over the years?
How has Amazon grown over the years? Amazon has grown over time to become a large online bookstore and e-commerce retailer in the global market. The company serves millions of customers in about 150 countries. The growth and survival of the company relate to its competitive advantage and ability to adapt to changing market trends. Communication, technology, and transportation improvements have increased Amazon’s business and commercial transactions. Globalization has allowed the company’s international diversification and innovation. The internet-enabled global connectivity allows the expansion of the business into overseas countries, enabling an increase in market size and sales.
How has Amazon grown over the years? The Evolution of Amazon
Evolution through geographical/market diversification
Amazon.com was founded in 1994 by Jeff Bezos in Washington (Hoffman, 2). Initially, the company began operations as an online bookstore but later expanded to the world’s largest online retailer. It offers its products and services through agreements, partnerships, and specified acquisitions. The main objective of Amazon was to achieve profitability and sustainable growth in the long term. This was achieved by maintaining a lean culture that increased income while managing expenditures and working capital.
By 2008, amazon.com had greatly diversified to be a global brand with websites in approximately 150 countries. Further, its primary operations, which were mainly handled in America, spread to Italy and Spain by 2012. Statistics by Alexa showed that in 2013, the percentage of company visitors from different countries was 66%, 2.6%, 2.2%, 2.1%, and 1.4% from the USA, India, United Kingdom, Canada, and Japan, respectively (Hoffman, 13). The company has a broad geographical reach. From a single employee since its inception, the company has over 50,000 employees globally who work in their different offices. These employees handle software development, customer service, and order fulfillment for clients worldwide.
Evolution through product diversification
Amazon has been known as a retail giant (Hoffman, 3). However, the company has dramatically diversified its products and is now considered a tech giant. Initially, the company only offered books for sale but later diversified to other products and services. The core business of Amazon when it was formed was online bookselling.to ride on the competitive advantage, the company diversified its product offering to the retail product. The website began selling various items such as movies, music, electronics, and pharmaceuticals; The company realized the concept through a third-party vending strategy to increase product offerings and earn commissions. In 2007, the company launched an e-book reader, which enabled customers to read many books and newspapers online. Later, Amazon launched a mobile e-reader and a cheap android tablet. Amazon’s android-based products have led to direct competition with the Apple Company’s iPad. The diversification was fueled by developments from its team and competition from other companies. By 2010, the company offered its customers various products and services, such as books, music, magazine subscriptions, and video games; they also provided a credited card which benefited the company, the customer, and the bank. Today’s product diversification that focuses more on tech products has led to more shipments. According to Hoffman (13), statistical records of frustration-free packaging, excluding Amazon-branded products, are 250,000, 1.3 million, and 4 million for 2008, 2009, and 2010, respectively.
Evolution through e-supply chain management improvements
The growth of the internet has fueled the evolution of Amazon. The development of Amazon’s diversification can be attributed to globalization and the growth of the internet. According to Hoffman (2), “as people became more comfortable shopping online, Amazon developed its website to take advantage of increased internet traffic and to serve the customers more effectively.” The achievement of Amazon’s multiproduct strategy has been realized through its evolving website. Whereas software solutions play a significant role in the integration and in enhancing the supply chain efficiency, it is mistaken to believe that integrated e-supply chain management is as simple as installing a software tool (Chen, 10). The experiences of Amazon demonstrate that implementing an effective supply chain requires heavy resource allocation, management, and technical the amazon.com has undergone many changes since its establishment, with improvements being made regularly.
The Amazon Company pursues a related diversification strategy. This strategy occurs where associated businesses rely on similar core competencies for success and competitiveness. Amazon adopts this strategy to move beyond its current product offerings and existing markets within its industry. Specifically, Amazon adopts the related diversification multiproduct strategy. The related constrained multiproduct approach suits the company’s businesses since the products and systems are connected.
Amazon’s business and corporate behavior show specific characteristics to realize the related constrained multiproduct strategies. The company’s operations are primarily carried out on one platform. The leading resource owned by the company is the e-commerce website Amazon.com. The constrained multiproduct strategies are characterized by using one central resource for business. The company’s website is the primary resource used for competitive advantage. Primary tangible resources must be successfully shared for an effective constrained multiproduct method to be achieved for economies of scale. The resources may entail plant and equipment or a unique product delivery system. The website allows for operational relatedness. The website has an ordering system, an e-payment platform, and an order tracking process.
The amazon e-commerce platform has helped achieve the constrained multiproduct strategy through shared information and resources and risks that are likely to face the company. To manage its inventory more efficiently, Amazon has a robust inventory delivery process. The company can regulate the inventory process to reflect the changes in market demand. Conversely, inventory management is constantly improved by gathering sufficient information relating to inventory, such as logistics and production capacity.
The constrained multiproduct strategy is realized through closely managed resources and services integration to cut costs and realize savings. The focus of Amazon is to focus on its core competencies in the different businesses. Amazon Company’s corporate structure is characterized by the centralization of strategic planning, human resource management, and marketing. The approach aims to foster cooperation among the departments. The amazon company’s website is used for eCommerce, payment and billing and computing, and web traffic databases. These websites provided the technological infrastructure required by the company and the clients. This created reliability; for instance, eCommerce enabled merchants to direct inventory when goods were purchased in the company’s fulfillment centers. By 2012, Amazon was a leading player in the eCommerce business worldwide. Further, the company has significantly invested in technological infrastructure to respond to this enormous growth.
Chen, Te. Implementing new business models in for-profit and non-profit organizations:
Technologies and applications. Shanghai: Idea Group Inc. 2010. Print.
Hoffman, Alan N. Amazon.com, Inc.: Retailing Giant to High Tech Player? Rotterdam School
of Management. 2013. Print.