Amazon.com: Business Model and its Evaluation Case Study Solution

Introduction:

Amazon – one of the largest and most valuable online retailer was founded by Jeff Bezos in the year 1994. Initially, the business model of Amazon was primarily based on the strategy “sell all, carry few”. The Amazon’s business was started with the sale of online books which was built over changing the value proposition of the customers. Amazon has significantly differentiated itself from other players in the market through offering of its retail platform to the merchants and third-party sellers while offering integrated referrals and reviews for capturing a large number of customers.

Over a long period of time, Amazon has significantly built a loyal consumer base i.e. an approximate of 270 million which was due to excellent customer service and a user-friendly website. On the other hand, Zappos – one of the US-based online retailers of shoes was acquired by Amazon in 2009 in terms of expanding the product offerings for $847 million. In 2014, Amazon represented a 20 percent increase in net sales with the opening of the first physical store in 2015. The growth of Amazon is mainly associated with the consistent evolution of business modelsthrough innovations and the expansion of product offerings. (Streitfeld, 2015)

Problem Statement:

Despite the international expansion and the opening of the physical stores, there has been a decline in the financial growth of the organization based on the continuous investment. As the competition in the industry has been increasing with time, the competitive advantage of Amazon i.e. low price is threatened by the growth of the other organizations such as Apple, Google, Wal-Mart and etc. The decline in the net profit despite a significant increase in the net sales, the financial health of Amazon has been unstable for a longer period of time which might result in thedemand for the increased profits by the stakeholders.

Current situation and Strategies:

As per the current situation of the organization, it has been significantly stated by the analysts that Amazon upholds the capability to invest and earn but it mainly requires ground-breaking approach or the innovation that would be implemented by Amazon in terms of generating more profits. The Strategic approach of Amazon has significantly changed since its establishment which is now primarily based on innovation and retaining the customers. With respect to the belief of Amazon, it makes consistent efforts in bringing improvement in the experience of consumers as they are one of the value propositions of Amazon…………

 

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