When Jeff Bezos started Amazon.com back in 1995, the online retailer focused jus

Question

When Jeff Bezos started Amazon.com back in 1995, the online retailer focused just on selling books. Music

and videos were soon added to the mix. Today, people can purchase a wide range of media and general-

merchandise products from Amazon, which is now the world’s largest online retailer, with over $60 billion in

annual sales. According to Bezos, Amazon’s success is based on three main factors - a relentless focus on

delivering value to customers, operating efficiencies, and a willingness to innovate.

Amazon offers customers a much wider selection of merchandise than they can find in a physical store, and

does so at a low price. Online shopping and purchasing is made easy with a user-friendly interface, product

recommendations, customers wish lists, and a one-click purchasing option for repeat customers. To deliver

products to customers quickly and accurately, Amazon has been investing heavily in a network of distribution

centers. In the United States alone there are now over 40 such centers.

To make its distribution centers work more efficiently, Amazon is embracing automation. In 2012, Amazon

purchased Kiva, a leading manufacturer of robots that service warehouses. On the innovation front, Amazon

has been a leader in pushing the digitization of media. Its invention of the Kindle digital reader, and the

ability of customers to use that reader either on a dedicated Kindle device or on a general-purpose device

such as an iPad, turbo charged the digital distribution of books, a market segment where Amazon is the clear

leader.

How did Amazon increase efficiency, quality and in turn responsiveness to customers?

1.What is the value that Amazon creates for its customers? How does the company create this value?

2.How important have innovation, efficiency, quality, and customer responsiveness been to Amazons’

competitive position?

3.Does Amazon have any distinctive competencies? If so, how do they impact the business?

4.Bring us up to date on where Amazon is today.

5. What are the ethical and social responsibility issues this case addresses?

Explanation / Answer

Answer 1: Amazon has put relentless efforts on making online shopping and purchasing easy with a user-friendly interface, product recommendations, customers wish lists, and a one-click purchasing option for repeat customers.

Answer 2: Innovation has been very important as the company constantly focusses on evolving its interface and its products, kindle is the good example of its innovation. Amazon showed its commitment to efficiency, quality and customer responsiveness by investing on its distribution centers.

Answer 3: Yes, Amazon has many distinctive competencies.

Answer 4: Amazon provides wide range of media and general- merchandise products. Amazon has become the world’s largest online retailer with annual revenues crossing over $60 billion.

Answer 5: The only issue arose in the above case is that Amazon is moving towards Robotic Automation. Automation replaces manual labor and hence promotes one of the causes of increasing unemployment rate.

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