AMAZON CASE STUDY.

Hugo Alejandro Castelblanco Vélez

AMAZON CASE STUDY

1. Explain how it has been the business model of Amazon and how it has evolved

In the early 90s began to be aware of what the Internet could go as far in the future, the first online companies began to appear, and with this began presenting the first business opportunities with products such as music CDs , computer hardware, software, videos and books. The characteristics of Internet and online commerce would enable those who would propose reducing costs for large amount of physical stores; and so, like Jeff Bezos, encouraged by global demand for literature, low prices of books and extensive existing catalog, E- Commerce decides to build a book.

The business of bookselling presented a number of features that made it a clear objective to develop it via the Internet, aspects such as physical limits for storing books in stores, a limited catalog, a global audience and low prices; Amazon did that appealed to a combination of physical and online infrastructure. It is from this time he had to spend some time for Bezos observed that these same characteristics were applicable to consumer products of all kinds, and this is how Amazon begins revolutionize what was the online retail industry to transform it into a powerful digital media platform focused on growth and innovation of electronic commerce.

Amazon from now is constantly reinventing its business model by finding new ways to create value for its customers, the business model of Amazon is characterized by being innovative by combining the experience of online sales company with its ability to understand the needs of its customers. And it is here that Amazon starts to go beyond books and has entered new product categories, such as electronic readers and cloud computing services.

Today Amazon is much more than a store that sells consumer products, is the largest online retailer in the world recognized by directly sell products cheaply in constants discounts and readily available for purchase and shipment. These are the other business areas of the company:

• Amazon Marketplace: Users can sell second-hand products and manufacturers and stores can sell their products in Amazon.
• Books and Kindle: Allows users to buy and read books that Amazon distributes through its store, books are protected and therefore can not be used by competitors.
• Amazon Web Services: Services that allow for host files or web pages to keep afloat infrastructure startups and technology companies.

1. How does amazon provide value to customers?

Amazon started as an innovative company specializing in niche market "people who buy books online", however, the idea did not meet the needs of customers fully. Some customers even new habits requiring technology such as shopping without a test, leaving personal data on the Internet, buy without advice from the seller is not accustomed, etc. In addition, for operational reasons, it could not guarantee delivery or the correct fulfillment of orders and this affected customer satisfaction.

In this situation Amazon changed its strategy to be a seller without local or stock to manage themselves for full control of the sales process and delivery. This change implied a significant increase in costs also facing increasing competition phase. The answer to this was to increase its product offering, offer free shipping.

Amazon learned from the experience and quickly adopted the philosophy of focusing on the customer, focused on identifying their needs and adapt quickly to deliver the highest possible value. It became a company that sells products that customers want to buy, offering choice, convenience and price without having to go to a mall; also ensuring correct deliveries, often depending on the amount, free.

Examples:

• Amazon learned the value of easily navigate the web and forwarded to customers.
• To ensure deliveries to customers build massive stores of books and CDs.
• Expand your range of products to offer.
• Creating programs: merchant Amazon allows retailers established merchant.com seek higher sales and to control the look and feel.
• Amazon launched Amazon Web Services operation.
• Amazon gave its customers the possibility to buy used books and see the rating that other buyers will place the seller.

1.  Explain how and why they were successful business alliances

Establish partnerships with their suppliers unbeatable was one of the main keys to Jeff Bezos for success. It all started in the first stage of business, selling online books, Amazon convinced his two main distributors: Ingram Books and Baker & Taylor to send them books to order, with the aim of reducing inventories and lower costs inventory.

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