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Amazon Case Study

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Amazon case study

1. Analyze Amazon.com each year from 2004 to 2006.

• 2004 = SUCCESS - Good net profit - Low price strategy - Use of commercial tools: discounts and free shipping - Launch of A9.com - Acquisition of Joyo.com - Largest database of book - Culture of “innovation” - Creation of “pizza teams”: improve innovation - Technological problems - Many litigations - “Gold box”: online design tools - Diversification of products and commercial tools.

• 2005 = GROWTH - Growing revenue of 24% but decreasing of the profit margins - Strategic partnerships (Marks & Spencers) - Assortment of acquisitions (BookSurge) - High ranking in customer satisfaction survey (2nd) - Drugstore become a competitor - Hire product expert - Development of various facilities: Toxona...

• 2006 = DECREASE - Amazon S3 (Simple Storage Service) - Alexa Internet (a subsidiary of Amazon) launched the Alexa Top Sites Service - Amazon Connect: allow authors to send messages to the readers - Start competition on the digital music market (Apple’s market) - Amazon “gold standard” in customer satisfaction for online shopping - Stay focus on global expansion (strategic plan) - Diminution of the turnover due to an unfavorable lawsuit against ToysRus.com - Negative impact on share price ($ 35 in 2006; highest value in 1999 $106,69,lowest $5.97 in 2001) - Strategy on three pillars, called “Customer Experience Pillars” which encompasses: Innovation-Selection-Price-Convenience - Opportunities: development of Internet, Asian market (3.6 billion inhabitants and about 56.4% of the world population)

2. What do you consider to be Amazon’s unique resources and strategic capabilities?

a/ Amazon’s unique resources:

As a online...

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