Amazon.Com: the Brink of Bankruptcy - a Case Study

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Amazon.com: The Brink of Bankruptcy MGIS 467: E-Business Case Study KT 1. Strategy Evolution 1994 - 2000 From its birth in 1994 to the dot com collapse in 2000, Amazon.com implemented a number of changes to its business strategy in attempt to stay on top of the e-commerce industry. Amazon.com started in 1994 as a simple online book retailer. Under this initial strategy, Amazon was receiving all of its revenue from its book sales (sales revenue model), and was popular because it was the first online retailer to do so. Amazon created value for customers early on by providing a space for customers to purchase a large variety of books in one place, thereby reducing the customers product search drastically from the traditional method of going to brick & mortar book stores. In the early stages, Amazon benefitted from the first mover advantage, and had a dominating market share. This attracted huge investment capital in the late 1990s, and Amazon used this capital to broaden its offerings in order to stay on top of emerging competitors. In 1996, Amazon focused on making the shopping experience on Amazon.com better for its customers. It revved up its browsing and search capabilities, and personalized the whole experience by offering customized layouts and recommendations based on what you had been looking at and purchasing. At this point, Amazon aimed to provide additional value to its customers by providing a personalized shopping experience. By 1998, Amazon started expanding into international markets and new products categories, turning into an online superstore and providing convenience and further reduced search costs to its customers. During 1999, Amazon began exploring complementary business models, such as auctions and marketplaces. Under these models, Amazon did not assume control of the inventory, and as such acted as an agent (generating additional

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