Business Model of Amazon

Opening of the internet to commercial activity, the creation of naming conventions for URLs and the development of a user friendly and free interface i.e. the browser were the three major developments that led to the advent of what is known as “e-business”. As the economy has moved from agrarian to industrial to information age, the focus of the businessmen or the wealthy and powerful has also shifted in terms of the ways of obtaining wealth or doing business. In the agrarian age there was shortage of land which made ownership of land as the determinant of value. Powerful land barons typically accumulated vast tracts of land and coerced people who were bound to the land and owned by the feudal lord into living on and working it. As economy moved from agrarian to industrial age, physical assets owned by a firm became the determinants of value and shortage of raw-materials led the powerful industrialists to conspire to control the supply of raw materials. In this age, the market could absorb as much product as the industrialists could produce. The current era in which we live has been defined as the information age wherein relationships and intellectual capital are more important than anything else. One is not worried about physical assets anymore. Companies don’t compete with each other over superior products as they are largely commoditized rather compete increasingly on the basis of value added customer services. The economic battles of today are fought over the mind-space of consumers. In the information age power-play customers are not passive participants, in the way that land and raw materials were in the agrarian and industrial ages. In fact, according to Zang Hailing, it is the customers' time that is in short supply, and therefore for any firm to succeed, emphasis needs to be given to the importance of reducing the customers' time to adopt a new product.

Thus, in a world where technology is changing every day and the transformation of consumers has