What is Amazon.com? Amazon.com, one of the pioneers of e-commerce, was launched by Jeff Bezos in 1994. Bezos’ initial plan for Amazon.com entailed a service that provided customers with access to an extensive selection of books, while eliminating the hassles for Amazon.com, associated with the time and expense required to build physical stores and warehouses, to purchase and house inventory (Hamilton, 2004, pp.42-46). Related pages in the Wiki: 1. Online Shopping - Amazon.com The History and Present Day of Amazon.com Jeff Bezos and Amazon.com did not witness pure success immediately, it was a few years before the e- commerce giant began proving to be the online sensation that was predicted. In 1995, Amazon was just another business willing to try the online market and identified its opportunity to sell books online (Gasson and Cowley, 2001, pp.55-59). However, Amazon.com was not placed in the same category as other businesses trialing online servicing. What distinguished Amazon.com from these other online businesses and what now allows Amazon.com to claim that it changed the world, includes its business model and the ways in which it turned the rules of finance upside down (Gasson and Cowley, 2001, pp.55-59). After its introduction on the global internet stage in 1994, it was not until 2004, that Amazon boasted its first profitable year (Hamilton, 2004, pp.42-46). To achieve this success, Jeff Bezos manipulated and experimented with many conventional business models to obtain his dream of Amazon.com (Hamilton, 2004, pp.42-46). After looking at the software that was available, Bezos and his colleagues realized that they would have to devise their own programs. So through the process of Amazon.com’s establishment, not only was an online retail service being formed, but also the creation of the sophisticated technology that has enabled the e-commerce and online shopping phenomenon (Hamilton, 2004, pp.42-46). An initial reason for the choice of books as the first product for sale on Amazon.com was that selling books online provides consumers with a virtually limitless selection of books available for their online perusal or purchase. In 2004, Amazon.com now has 4.5 million books on offer to customers around the world (2004, pp.108). Additionally, the internet’s retrieval and interface technology enables the consumers to search the entire database for books in print (Spector, 2000, pp.27). Books require little need for hands-on product trial (2004, pp.108). ‘Everybody understands what a book is’, therefore there is no need for product explanation and would be the same as that purchased in a bricks and mortar bookstore and this was one of the fundamental reasons behind Bezos’ choice for an online bookstore (Spector, 2000, pp.29). Although in 1995, Amazon.com had barely lifted off the ground, there were extravagant visions and expectations set. From the beginning, Bezos knew Amazon.com’s potential and that its future was not limited to only books (Hamilton, 2004, pp.42-46, Spector, 2000, pp.92). One of Bezos’ colleagues was an avid kayaker and Bezos once said: In the future, when you come to Amazon.com, I don't want you just to be able to search for kayak and find all the books on kayaking. You should also be able to read articles on kayaking and buy subscriptions to kayaking magazines. You should be able to buy a kayaking trip to anywhere in the world you want to go kayaking, and you should be able to have a kayak delivered to your house. You should be able to discuss kayaking with other kayakers. There should be everything to do with kayaking, and the same is true for anything (Hamilton, 2004, pp.42-46, Spector, 2000, pp.92). That was his vision, amazingly clear and ‘gigantic in scope’ (Hamilton, 2004, pp.42-46, Spector, 2000, pp.92). Amazon.com's sales have been growing gradually. The secret to its success and profitability is customer retention - ensuring customer loyalty and repeat customers. Amazon.com pioneered new technologies, such as collaborative filtering, which suggests products that each individual buyer might like by comparing them to other users's preferences. Also, Amazon.com is continuing to work on further price reductions as well as offering free all-year-round shipping. Therefore, nearly 70% of Amazon's sales are from repeat customers. (Bezos, 1999, pp.24) About Amazon.com ... Business Model As Amazon.com was being established, Bezos was also building a completely new business model and consequently wanted employees who could think on their feet, so initially, Bezos insisted on hiring the brightest, most intelligent and versatile people who could find, even for the packing room (Spector, 2000, pp.125). He wanted people whom could share his vision and were willing to work to achieve it (Spector, 2000, pp.125). Bezos suspected failure in the first few months of operation and unfortunately Amazon.com went broke. At a critical stage for the company and with the doors about to be closed, Bezos did not step down, with his confidence still shining, he was prepared to wait for the world to come around to his idea when it was ready (Spector, 2000, pp.84). After many setbacks, venture capitalists, investors and strategic partnerships (with Target, Toys R Us, Babies R Us and Office Depot) were signed, with a new strategy and business model – Get Big Fast, driven by momentum and enthusiasm to achieve what they set out to do. Jeff Bezos’ ‘burning passion and raw intelligence’ enticed Eric Dillon, a stockbroker and venture capitalist into the company, along with many other financiers (Spector, 2000, pp.96). This is when Amazon.com expanded, intensified and most of all, succeeded. This Get Big Fast strategic imperative drove the company to success by embracing a 'land grab' logic and staking out large areas of online space at the one time, rather than gradually expanding its online presence (2004, pp.108). As recognition of Amazon.com began to expand and fortunes began to grow, with the implementation of their Get Big Fast business model, in a matter of only a few months, Amazon.com went from thousands to millions, and eventually to billions and tens of billions, demonstrating that Get Big Fast was the strategy for Amazon.com. After Bezos achieves profitability, he knows how to use his money to make more money because he knows how to put the money where it is needed. For example, purchasing banners on portals like AOL, creating a variety of offline promotional activities and established partnerships with search engines like Yahoo. (Saunders, 2001, pp.141) Related pages in the Wiki: 1. ECommerce - Consumer2Consumer 2. ECommerce - Business2Business 3. ECommerce - Business2Consumer Related pages in Wikipedia: 1. Business Model Business Strategies In recent years, online shopping has become extremely popular and many organisations have been covetously observing the online market. But, how does Amazon.com stand head and shoulders above others? Within its major Get Big Fast strategy it pursues many unique strategies. Strictly speaking, there are three strategies that have helped Amazon.com to enhance its competitive advantage, including cost- leadership, customer differentiation and focus strategies (Saunders, 2001, pp.122-123). The first strategy, cost-leadership is pursued by Amazon.com by differentiating itself primarily on the basis of price. Due to this strategy, Amazon.com always makes sure that it offers the same quality products as other companies for a considerably less price. Their second strategy is customer diffentiation. Amazon.com provides current and prospective customers with differentiation though design, quality or convenience and Amazon.com always selects a differentiator that is different among the competitor. So, Amazon.com consumers can recognise and differentiate its product from competitors. The last strategy that it uses, is a focus strategy. This strategy takes one of the two earlier strategies and applies it to a niche within the market (Saunders, 2001, pp.122-123). Amazon.com fouses on outstanding customer service as a niche but not the whole market because each niche has its own demand and requirement. Amazon.com's Value Proposition Values play an important role in Amazon.com's succeeding. A value is like a goal and forms an ongoing objective. Amazon.com's values and philosophy is at the center of the organization and often determines the difference between success and failure of the enterprise (Saunders, 2001, pp.141). There are two strong values that are practised by Amazon.com. These include customer satisfaction and operational frugality. These two values complement Amazon.com's operational strategies in achieving and maintaining an effective competitive advantage and encouraging employee and corporate performance. For example, Amazon.com's employees are paid base salaries that are obviously less than competitive rates. So, due to the frugality value, Amazon.com spends much money on branding and business expansion. However, Amazon.com sustains employee loyalty through employees' ownership of company shares. Amazon.com injects a message into the eomployee's minds - when Amazon.com begins to show a profit, their shares will profit too. (Saunders, 2001, pp.141-143) Customer Service Amazon.com prides itself on customer service and aspires ‘to be the earth’s most customer centric company’ (Guglielmo, in Schlegelmilch, Diamantopoulos and Kreuz, 2003, pp.17-33). A study (Saunders, 2001, pp.101-105) shows that more than half of Amazon.com's customers are repeat customers. This success is based on customer-value proposition, which is conducted by Bezos. For instance, in his customer-value proposition, he suggests that vistors to the Amazon.com site must leave with a positive impression, while also providing potential buyers with reasons to visit the virtual store again.