Rephrase this whole paper with completely different words

Table of Contents

Executive Summary 3

Business model of Amazon 4

Amazon’s core competency 5

Amazon’s most important competitor 6

Where to next? 7

Citation 8

Appendix 9

Executive Summary

Amazon.com, Inc, founded by Jeff Bezos, is often considered one of the largest e-commerce platforms on the planet. Although it initially started as an online marketplace solely for selling books, it later expanded into selling almost anything that can be sold online ranging from electronics, toys, furniture, jewelry to food, apparel, etc. However, as Amazon evolved with technology, traditional boundaries between hardware and software, products and services, and online and bricks-and-mortar stores had become increasing blurred. (Rothaermel). As a result, Bezos realize that Amazon is in the middle of such fierce competitive battle for control of the emerging digital ecosystem against tech giants such Alphabet (Google’s parent company), Apple and a new player from China- Alibaba. The three famous pillars that Amazon provides its investors optimism for its future long-term profitability may not be enough. Therefore, Bezos is looking four the fourth in order to make Amazon stay competitive in such condition.

In this report, I will discuss about Amazon’s business model for e-commerce especially about the retailing marketplace, its core competencies as well as Amazon’s most important competitor in order to find the solution for the question “ Amazon where to next?”.

Business model of Amazon.com as of Spring 2017 (Line product: E-commerce)

Often considered one of the largest online shopping pages on the planet, Amazon runs its business model in lots of different fields. Founder of Amazon, Jeff Bezos, likes to talk to his investors about the three pillars of Amazon which are ecommerce marketplace, the Prime membership program, and Amazon Web Services (AWS) (Rothaermel, 2017). For the e-commerce part, besides directly selling products, Amazon provides a platform also known as Amazon Marketplace which allows customers to purchase products from any other third-party vendors. These items tend to be either less common items or having a higher purchase price which could reduce Amazon’s profits if holding them in the warehouse. The platform also allows qualified seller to access Amazon customers globally (Rothaermel, 2017) therefore attracting a vast amount of third-party retailers. Although Amazon doesn’t charge retailers for listing items on the site, it does collect part of the sales price as commission. This platform encourages entrepreneurship as well as personal and professional growth at such exceptional scale.

The Flywheel Business Model introduced by Jim Collins describes how try to develop a new strategy is as difficult as try to make a huge flywheel into motion. At first, there is no movement and people would think that it’s impossible to imagine the flywheel at speed. However, great CEO is person who make exceptional decisions to get the flywheel moving and make profits for the company. Bezos and his colleagues sketched their own Flywheel Business Model, which helped them run the business successfully. The logic behind it is pretty simple: with lower prices tend to attract more customer visits. More customers increased the volume of sales as well as more commission-paying third-party sellers to the site which helped Amazon to get more out of fixed costs like the fulfillment centers and the servers needed to run the website. This greater efficiency then enabled it to lower prices further. Feed any part of this flywheel, they reasoned, and it should accelerate the loop. Stone, B. (2014). (See Appendix 1)

Amazon’s core competency

In order to become the dominant player in the retail industry, Amazon possesses some of the core competencies.

First of all, the most important core competency of Amazon is being convenient. Thanks to a vast number of third-party sellers, it could easily satisfy the desire of customers to find almost everything on their shopping list at one place without leaving home (Rothaermel 2017). No matter what you want to buy from a cellphone to furniture such as bedframe, just open the app and you going to have it delivered to your door-step as quickly as tomorrow.

Secondly, in order to pursue its mission of being the “Earth’s most customer-centric company, Amazon is much known for its exceptional customer service. Based on a recent survey, Amazon is ranked as the most well-regarded company in the United States (Rothaermel 2017). By using the recommendation system that collects and analyzes customers’ buying patterns, preferences as well as their shopping history or that of others with similar profiles, Amazon could customize suggestions for customers on household equipment, clothing, music, etc. This creates a more convenient and personalized shopping experience for buyers, especially essential when transacting online. Furthermore, as a consumer adds products into their online shopping cart, Amazon would suggest complementary products, frequently offering a bundled price at a discount (Rothaermel 2017). Moreover, lots of customers usually have difficulty in returning or exchanging online bought products. It could be a really frustrating process of having to repackage an item and drop it off for shipping where there is always the potential for it to be lost in transit. In order to fix that and to support of the online retailing platform, Amazon recently opened several brick-and-mortar stores here in the United States. These physical retail stores are yet another way by which Amazon can touch the customers. The retail location enable next day delivery for many items, pickup of online order, and exchange or return purchases which are very attractive to consumers.

Amazon’s most important competitors for this selected line of products

Amazon has lots of competitors in lots of different fields. It has to compete with tech giants such as Microsoft and Google for web services, Netflix and Hulu for video streaming, etc. However, the most important competitor for the e-commerce platform especially from third-party to customers, Alibaba is the one who pose most threats to Amazon’s current dominant position.