http://www.nytimes.com/2009/09/20/business/20amazon.html?ref=business
Summary:
This article talks about the rapid growth of Amazon in the market. Amazon is being compared to Wal-Mart because of the big market share they both have. It also describes the rate of Amazon's growth by giving their sales revenue of each year which is a way of determining the growth of a firm.
The article covers the following topics from our syllabus:
1.7 Growth, 3.3 Cause of cash flow problems - overstocking (Amazon does not have this problem, so one less cause to cash flow problems), 4.1 Market Share, 4.5 Promotion, 4.6 Place
One business tool/theory/technique to the organization:
1.7 Growth
This article compares sales revenues of Amazon and Walmart of each year to provide the reader the sense of the rate of their growth in market share. Amazon's market share and size is increasing rapidly for the past few years. It shows that the ratio it has in the market is getting larger and larger. To continue this trend, Amazon can look at a few strategies. For internal strategies, they can lower their prices, and do more advertising. For external strategies, they can merge or takeover other bookstores, have joint ventures, or strategic alliances.
Hi Emily,
ReplyDeleteCool Article.
Since Amazon seems to be ambitious with expanding it's e-commerce business, a useful analytical tool can be used to help Amazon managers devise their products and market growth strategies. The Ansoff's Matrix shows the various strategies that businesses can take depending on whether it wants to market new or existing products in either new or existing markets.
The 4 growth options are found in the link below
http://css3.gr/images/uploads/AnsoffMatrix.jpg
Market Penetration
This is a low-risk growth that Amazon can choose to focus on selling existing products in existing market. For ex. They can increase their market share of CD's and DVD products by improving their marketing mix. Using better advertising methods or by offering more competitive prices as you mentioned for internal strategies
Product Development
This growth strategy would probably not be considered by Amazon as they operate in the tertiary sector, only responsible for delivering finished products.
Market Development
This is a medium growth strategy that Amazon can consider which relates to businesses selling existing products in new markets. For example: Amazon can try to market their books to a different market segment through advertising method or changing its packaging to attract customers.
Diversification
This is a high risk growth strategy that Amazon is already applying by marketing new products in new markets. In addition to being able to gain market share, the business can also spread risks. This means that if one part of Amazon is under performing, then other parts of its business can make up for it.
Hi Emily. We will be tracking Amazon's progress throughout the year. It will be a great way for us to review marketing and investigate the role of e-commerce. Thanks for sharing the article and your insights.
ReplyDeleteI believe this is the increasing trend of e-commerce (4.8) in the business world. Due to the widespread popularity of computers and uprising of comprehensive delivering services, there is no longer need for physical retailers. Amazon has the distinct advantage to appeal to customers who are physically far away from shops but also its online services allow the customer to choose from a wide variety of products. It is perhaps already true that Amazon has changed the business world forever.
ReplyDeleteHi Emily,
ReplyDeleteAmazon has definitely been prosperous, achieving a very well recognized brand name in the industry. It has proven to be the future of consuming products that are convenient to the consumers. However, there is a drawback from online retailing where Wal-Mart has an advantage over. Online retailing means that customers can not actually physically see or feel the product. For example, clothes and shoes can not be tried on or felt for their quality but if customers actually go to Wal-Mart they can. There is no real need for competition for these two large companies as they offer two different things for the consumer. Both of them satisfy the needs and wants of the customers. I actually don’t think they need to do much to improve, as their strategies right now are very effective and working very well even in the times of recession.
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