Assignment #2:
Amazon.com’s E-Business Model
BUS 508 Contemporary Business
Amazon.com’s E-Business Model
Amazon.com serves enterprises and developers of all sizes by providing access to technology infrastructure through Amazon Web Services. Through their programs, sellers can sell people their products and fulfill orders through Amazon websites. The company’s current and potential competitors include other online and mobile e-commerce sites, physical-world retailers, product producers and manufacturers, comparison shopping websites, companies that provide computing services among others. Speed, reliability and quality feature as the main competitive factors for Amazon’s seller and enterprise services. During the fourth quarter of 2010, the company recorded high sales volume with an annual revenue of 38% (Amacon.com, 2010).
Pros and cons of Amazon’s growth and diversification of business and specialization
The adoption of business diversification by Amazon is very important because has enabled the business to expand its market share. This is important in overcoming the issue of seasonality where some products could be selling while others are not. This is because the demand for the various products varies differently as well. Diversification boosts the image of the business due to its extensive presence in the markets of various products and customers can choose it as a one-stop-shopping place.
Lawless (2009) states that the main disadvantages of business diversification are difficulties in attaining greater brand recognition and meeting the needs of customer in the various market segments. An increase in operations and products offered has increases the complexity of the business and a resultant strain on the management. This could limit Amazon’s growth, damage their financial reputation and negatively affects the businesses operation results. Amazon should therefore consider dealing with a few related products in order to...