Amazon.com (B) Harvard Case Solution & Analysis

Amazon.com’s European Distribution Strategy

Environmental Analysis

PEST Analysis

Political

In Europe, approximately all industries play an important role in the efficiency and growth of the economy. Most of the companies are affected and benefited by the decision of the both European Union and respective parliaments. European Union laws actually exist on two different levels. Regulations that are compulsory for the member states to abide by it and commands that are actually binding only through enactment of a law within the premises of the member state in line with the actual directives. A vital influence at European level is European Union competition, which is based on the faith that the business effectiveness benefits from the real intense competition. The role of rivalry policy, then, is to boost competition in the European Union by removing limiting practices and many other anti-competitive activities.  Amazon has already been doing a good job in Europe, but they need to get more aligned for exceptional outcomes. For this purpose they need to be more and more aggressive in developing and understanding with European Union and concern authorities. The political setup in entire Europe is quite stable and favorable for the companies like Amazon who are in search for new opportunities by getting themselves more and more aligned.

Economical

For every business growth, a stable economy has a massive role to play. Almost all the countries in the Europe possess relatively a stable economy. There are many countries in the EU, in which the service sector contributes over 70% of gross domestic product, which is a portion of the actual total value of services and goods produced within an economy. Europe possesses a population of around 731,000,000 (11% of the World).  The European Union has the largest, richest economy in the entire world and it is the first trade power which operates globally and trade within the several Union accounts for more than one-third of the entire world. Amazon must make sure that their supply chain should be aligned from all perspectives because people in Europe are found by reading and in terms of education of their economy is also growing in a very fast manner.

Socio-cultural

Social forces usually include the elements like, changing demography and education, etc. The population in entire Western Europe is comparatively static, but the age bands are continuously changing. The number of aging people, for example, is growing in a real fast manner. Christianity is the main religion in Europe, with 76.2% of Europeans see themselves as Christian. The culture of education has been given special importance in Europe and there are more than 4000 different institutions present in Europe who possess an excellent number of both local and international students, which can be a real opportunity for Amazon if they could effectively align their supply chain issues.

Technological

The technological infrastructure in Europe is exceptional. Approximately all the industries are highly developed specifically when it comes to technological infrastructure. Europe has an excellent technology infrastructure to support the aggressive global economy. They are professionally upgraded, and keep their focus on enhancing their technological infrastructure. Amazon can use the new and upgraded technology to make their supply chain operations smoother. A whole new industry, which is formally known as the customer relationship management (CRM), has actually emerged in modern times, originated from database technologies to empower companies to improve communications standards and relationships with consumers. The European Institute of Innovation and Technology  aims to be a new flagship research center for additional excellence in research and innovation. The European distribution network could take some serious advantage of the excellent technological infrastructure of Europe.

Background

Amazon.com, Inc. or (Amazon.com), came into being on May 28, 1996, serves the customers through its incredible retail websites and moreover emphasis on the excellent price, convenience and selection. The company offers an extensive range of programs that actually allows numerous sellers to sell their preferred products on its websites and even their own branded websites and to complete orders through them, and programs that actually permit filmmakers, authors, musicians, application developers, and others to sell and publish content. The company operates in dual segments in North America and even on an International basis. The Company actually serves clients through its professional retail websites, and emphasis on price, selection and convenience. The company designs its intact pool of websites to actually enable millions of their products to be sold by the company itself and by any third parties across more than dozens of product categories.

SWOT Analysis

Ø  Strength

ü  Cost leadership approach

ü  Higher quality products and services

ü  Strategic acquirements

ü  Quiet, efficient distribution chain and logistics set up

ü  High economies of scope

Ø  Weaknesses

ü  Only online existence

ü  Selling at low margins (Approximately Zero)

ü  Negative publicity sometimes

ü  No physical outlets

ü  Free shipping.................

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Discussions at Amazon.com new and the biggest problem. Threat of entry Barnes & Noble in the online bookselling industry with its new website - barnesandnoble.com «Hide
by Jeffrey F. Rayport, Dickson L. Louie Source: Harvard Business School 15 pages. Publication Date: April 8, 1998. Prod. #: 898084-PDF-ENG

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