This essay will describe Amazon’s business strategy and address whether the company is moving away from its core competency of being a leading online retailer. It will present areas where Amazon.com is competing with Google and Microsoft and determine if this competition is a wise strategy. In addition, it will address uses of Amazon.com database; possible data management issues; and the relationship amongst Amazon’s data, information, and knowledge. Finally, it will describe how Amazon.com uses e-business and e-commerce for business to business and business to consumer relations. Core Competency
The company’s founder, Jeff Bezos, lunched Amazon.com in July 1995. Amazon.com originally started as an online bookstore, but soon after started selling DVDs, CDs, computer software, electronics, apparel, furniture, and toys. At its core, Amazon remains one of the leading online retailers with a net sales of $24.51 billion reported in 2009 which clearly shows substantial growth since net sales of $1.64 billion reported in 1999 (Amazon.com, Inc., 2010). Competition Strategy
Although Amazon continues to be one of the leading online retailers it does compete with Google and Microsoft in other areas. In comparison, all 3 companies are online corporations. They each began doing business in specific areas; Amazon started as retail, Google started as a search engine and Microsoft introduced partnered with IBM and introduced the 16 bit operating system MS-DOS10 in 1981 (Microsoft Corporation, n.d.) The competition is a wise strategy for Amazon.
All three companies are in the business of technology, the constant between the companies is that technology changes. And business strategies must continuously change along with it. With innovation of new and improved products, the threat of new entrants is ever present. Capitalizing in any area of technology is a wise decision for Amazon and any other company. Because the world of technology is flattened the opportunities present themselves. The decision to explore a variety of technical products would be beneficial to Amazon.com and its shareholders. Amazon’s Data Management
By the year 2007, Amazon had spent 12 years and $2 million building the infrastructure to its online store, making it among the biggest and most reliable in the world, yet it only used 10 percent of its processing capacity at any one time (Rainer & Turban, 2008). Amazon decided to provided storage and other services to help other companies run the technical and logistic aspects of their businesses.
Google and Microsoft offer similar data management products. Amazon offers the Simple Storage Service (S3), the Elastic Compute Cloud (EC2) and the Mechanical Turk. S3 offers businesses storage for their data and applications on disk drives with a per gigabyte charge. The EC2 rents processing power at a charge per hour and the Mechanical Turk service offers processing power and networks of people that are paid to do process work companies post online then Amazon receives a commission. (Rainer & Turban, 2008). Amazon uses data in a variety of ways to offer information and knowledge for the benefit consumers and businesses.
In today’s diverse economy, e-business and e-commerce is publically well known. E-business and e-commerce are terms to describe businesses that run via the Internet. When a business is run online it will carry a much wider customer base, instead of a local “physical” store. Amazon is a worldwide online retail site offering a variety of products. Amazon has provided international shipping for companies in Germany, France, Italy, Japan, and China this is how the company uses e-commerce for B2B relations allowing various business to sell products on its’ website. Amazon.com uses the B2C method by allowing customers to select from a list of sellers of which to purchase a particular product.
Amazon capitalized on e-commerce and evolved from online billboards to a fully functional, personalized shopping experience over the past decade. Information system plays a big part of amazon.com, whether it take the form of available products offered by a variety of sellers or offering data storage and or processing as well as advertising to other business. Getting the information and products to its desired consumer remains effective via Amazon’s technological platform.
Conclusion In summary, this essay described Amazon’s business strategy and determined the company is still among the most reliable and successful online retailers. Although capitalizing on data storage and maintenance keeps its edge among its competitors. It presented areas where Amazon.com is competing with Google and Microsoft and determined this was a wise strategy in its evolution. In addition, it addressed Amazon’s expansion to use its database to deal with possible data management issues, and the relationship amongst Amazon’s data, information, and knowledge. Finally, it described how Amazon.com uses e-business and e-commerce for business to business and business to consumer relations.