Amazon.com Inc.

Case Exam 2—Amazon.com Inc. Amazon’s most recent business initiatives serve small and medium sized businesses by providing data storage, computing capacity, logistical and distribution support. Amazon founder and Chief Executive, Jeffery P. Bezos, recently began initiatives to help businesses run the burdensome technical and logistical aspects of their businesses in an effort to become a 21st century digital utility (Cravens & Piercy, 2013, p. 608). Amazon’s vast array of technology services allows entrepreneurs to operate businesses via the Internet, in some situations without ever leaving home. This is possible by way of Amazon’s site hosted product-for-sale listings, inventory management, online data storage, warehouse packaging, payment processing and product fulfillment, all completed by one of Amazon’s many services. The logistical and computer programming intricacies of such a system are almost unimaginable to the average consumer. As a loyal Amazon shopper, it is hard not to believe in the unique innovation of such an efficient global retailing giant. Amazon seems to have mastered all aspects of online retailing. Industry analysts and observers may see this sort of operation as creating sales competition within Amazon’s own sphere of operation when in fact, Amazon is garnering support from hundreds of businesses operating under Amazon’s umbrella, all while becoming the most dominant online retailer in the world. This inevitably aids Amazon in staying ahead of the competition. Amazon invests significant resources to develop and provide new and innovative services, which inevitably hurts short-term profit margins. Bezos himself states: “What we’ve historically seen is that the seeds we plant can take anywhere from three, five, seven years (Cravens & Piercy, 2013, p. 610).” This factor contributes to lower than anticipated short-term profit margins and also contributes to investor dissatisfaction. Like many businesses, profit margins are low during the

Cited: Cravens, D. W., & Piercy, N. F. (2013). Strategic Marketing. New York: McGraw Hill, Irwin.