Amazon.Com Case Study

907 WordsSep 3, 20144 Pages
Xiaomeng Guo Assignment 1-2: Amazon.com: The Brink of Bankruptcy Abstract Amazon.com is one of the biggest international online-shopping Companies and the most familiar shopping website for every American. No matter if customers want to buy something or sell something, Amazon.com always is a good place for them. I still remember in 2010 I had an opportunity to interview with a Target manager. I asked him, "What is Target’s biggest competitor?" The manager said, "Amazon.com is our biggest competitor." Dramatically, just one year later Target had become Amazon.com’s merchant partner. This news makes me curious about the kind of company that Amazon.com is. Amazon was founded by Jeff Bezos in 1990. At the beginning it was just an online bookstore. Six years later, Amazon used their own inventory management, distribution infrastructure, fulfillment, and customer service model to become the one of the biggest online-shopping company. By 2000, over 75 percent of U.S. consumers recognized the Amazon.com brand, and the Interbrand ranked the company as the 48th most valuable brand worldwide. The number of customers increased from 14 million in 1999 to over 20 million in 2000. However, a successful company like Amazon.com also has its own actual problems. What is the actual problem? Since the 1990s the company has invested heavily to quickly develop the best-in-class retailing, fulfillment, and customer service capabilities required to support its rapidly growing and increasingly complex business. During 1998 and 1999, Amazon.com spent over $429 million to build a state-of-the-art digital business infrastructure and operations that linked nine distribution centers and six customer service centers located across the United States and in Europe and Asia. However in late 1999 this distribution infrastructure provided 70 percent to 80 percent overcapacity. In other words,

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