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Amazon.Com’s E-Business Model

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Amazon.com’s E-Business Model
Donna Lowther
Dr. Kitoko
Contemporary Business
July 30, 2011

1. Discuss whether or not Amazon has lost its identity by expanding into markets well beyond books. According to Sandoval (2001) Amazon is losing its original identity because it is losing ground in the book selling department, for which it was created and because Amazon may have diverted its attention from books or, worse, spread the company too thin to compete effectively in any single area, by expanding into other areas. Though I do no ever remember a time when Amazon was just strictly books I would have to agree with Sandoval, since Amazon now sells items such as video games DVDs, toys, electronics, software, and home-improvement products as stated by Quittner (1999). Quittner (1999) also states that Bezos has further expansion plans such as: “washing machines, cars, rubber gaskets, Prozac, exercise machines, marmalade, model airplanes, everything but firearms and certain live animals.” Looking at this shows that Amazon has definitely lost its identity as strictly a bookseller. I think Amazon’s identity is becoming close to that of e-bay, in so far as the fact that Hof (1999) states that Amazon now has daily auctions. In their annual report for 2010 Amazon (2010) states “this expansion increases the complexity of our business and places significant strain on our management, personnel, operations, systems, technical performance, financial resources, and internal financial control and reporting functions. We may not be able to manage growth effectively, which could damage our reputation, limit our growth and negatively affect our operating results” (pg 6). So maybe as Sandoval (2001) states they have spread themselves too thin to compete effectively in any single area, especially if Amazon’s annual report states that they may not be able to effectively manage any...

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