Activity: Read the presentation below and highlight five key points or pieces of evidence that illustrate how a firm can be so successful online. (really useful exercise as it could easily be a question on your unit 4 paper)
Students might be surprised by the sheer variety of businesses owned by Amazon. The business has diversified significantly since it launched its original online bookselling operation. Amazon’s growth has been both internal (organic) and external (via acquisitions).-
Another key point is that Amazon incurred substantial losses during a prolonged “start-up” phase. It invested to ensure that it had significant competitive advantage from its e-commerce platforms. The subsequent return on that investment is impressive.
Amazon’s revenue growth is particularly impressive. One slide compares the total revenue earned in the first five years. Amazon achieved $2.8bn, compared with $1.5bn for Google and just $0.4bn for eBay.
The essence of Amazon’s e-commerce business model can be summed up in three words (which underpin all its e-commerce activities):
- Convenience
- Low prices
- Large selection
Here is the streamed presentation via slideshare;
Amazon.com: the Hidden Empire
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