How Amazon.Com Became the Leading Online Retailer by 2011

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How Amazon.com Became the Leading Online Retailer by 2011

Amazon, the world’s largest online retailer, has seen great growth since its founding in 1995 by Jeffrey Bezos. Bezos preaches that the company is a technology company and that its core skills drive its retail mission. The company has seen this great success because their business strategy involves passing up short-term advantages or opportunities and building infrastructure in order to secure solid long-term gains. Amazon was started as the first online bookstore with a vision to be customer-friendly, easy to navigate, provide buying advice, and offer the broadest and largest selection of books at low prices to a huge market. Amazon was one of the first major Internet retailers and received enormous free national publicity and the venture gained great acceptance. As sales continued to soar and capital was necessary to grow, the company went public and started issuing stock in 1997. This rapid growth put pressure on Amazon to control the company’s value chain, most notably the Website’s software and developing and maintaining the physical infrastructure to obtain and maintain inventory. High costs of physical infrastructure were draining profits because they were selling books at low prices. These low costs were crucial as competitors such as Barnes and Noble began to enter online retailing. Being that Amazon is a technology company, their mission is to use and develop its technological expertise to sell more and more goods and services in ways that satisfy customers and keep profits growing, as seen by innovations such as 1-Click ordering and Gold Box specials and deals. Another innovation was the Amazon Associates program, a strategy which attracted new customers through referrals from other sites, which by 2007 made up for 40% of Amazon’s revenues. Amazon began to see slowing growth and combated this…...

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