Amazon: History, Growth, and Business Strategies

Amazon: A Case Study
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Amazon: A Case Study
Company background
Amazon Inc. is an American multinational technology business headquartered in Seattle, Washington. Jeff Bezos founded the company in 1994. Bezos is the former president and CEO of the business. He serves as the executive chairman of Amazon. Andy Jassy is the current president and CEO of Amazon. Amazon started as an online bookstore but has, over the years, expanded and diversified to become a multinational business with interests in electronics, household products, cloud computing, and more. Amazon is one of the world's largest online retailers despite the skeptics’ projections when the business first started. Critics often thought that Amazon would lose its market share to more established book retailers like Borders and Barnes & Noble. The business’ lack of profits until 2001 appeared to justify the critics’ assertions. Howsoever, Amazon has proved skeptics wrong, given the magnitude of its growth that has seen it venture into the technology space. Since its early days, Bezos maintained that Amazon was not a retailer but a technology company. The growth of the business can be attributed to its diversification strategy, which has allowed it to expand to offer different products and services.
Industry or project features in the case study
This project focuses on Amazon’s diversification strategy that has seen the business grow from an online retailer of books to a business with a major stake in the technology space. Diversification is a business strategy that entails widening a business’s operations into new markets or industries (Schommer, Richter & Karna, 2019). It is a risk management approach where a business allocates investments across different financial instruments and industries. While Amazon commenced as an online retailer of books, it has pursued a diversification strategy to mitigate risk and increase revenue sources. The business has achieved this by offering various products like electronics, cloud solutions, groceries, and digital content.
In addition to the wide product offerings, Amazon has diversified its revenue streams by expanding into new businesses. For instance, in 2006, the business launched Amazon Unbox in the US. As the service grew, it added Prime Video membership through the development of the Prime Subscription. The streaming service has been instrumental in allowing clients to watch movies and videos more cost-effectively. Similarly, in 2007, Amazon launched Kindle, an electronic device dedicated to reading books. Amazon Kindle has become the most popular e-reader and expanded the company’s sale of electronic books. These ventures have allowed Amazon to generate additional revenues. They have been instrumental in improving the financial performance of the business. Further, the new ventures have reduced overreliance on the core online retail business. Amazon is assured that if the e-commerce business is not doing well, there is a revenue stream from other products and services.
Amazon has also diversified through its expansion into more geographical regions. The company seeks to take advantage of globalization to ensure its prod...