For a long time in the history of business Amazon.com has served as an illustration of a successful online-shop model. However success of the company achieved in late 90s, stimulated other people to build dot.com –type business. The tendency mentioned has achieved its top in 1999, when the number of online shops has become critical . As a result, a great number of shops have ceased to exist. At that time, Amazon has lost about $ 500 million. The question we address to the case is what actions should be taken to survive and sustain its competitive advantage . As the present case describes situation actual for the beginning of the first decade of the 21st century, we are going to carry out an analysis from the perspective of the time frame mentioned .
First of all consider business model of the company in more details.
Since company foundation in 1994 , its business model has been changed four times, however a leading principle of company philosophy was unchangeable. The company does not turn its programmers and engineers to kings, but focuses on its consumers. Today thins principle looks very common but in Early 90sit was something new for IT companies. That principle had a visible expression: at each meeting the host of the company used to set an empty chair to the head of the table saying “ Imagine that its chair is our potential client, he is a major person in our organization. Client oriented approach was the unique feature of the company which was defining the main direction of its development .
Another important feature is the model of company logistics. Bright idea of company creator was to reject traditional model of storehouses. They were turned to packing centers with only few shelves to keep goods. Goods are permanently delivered to a “store” for packing after that they are immediately delivered to a post...