Amazon Case Study Amazon Faces Case Study

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THE SITUATION

Amazon has quickly grown from an online retailer to a global platform for e-commerce, e-commerce hosting, cloud computing, logistics and 3rd party e-commerce services, in addition to its core business of online retailing. The multi-faceted success of Amazon can be traced to Jeff Bezo's prescient insight into the future of e-commerce to the foundational level. Mr. Bezos defined three criterion for choosing the location of Amazon's corporate headquarters. These included having the necessary programming talent to develop software, closeness to a major book wholesaler, and a state with little or no sales tax. He found all three in abundance in the Seattle, Washington area and launched his company there. These three factors also gave Amazon the ability to accomplish another key objective Jeff Bezos, had and that was to get big fast, at all costs. He believed that scale would prove to be a significant differentiator over time, and it has. The intensive level of development effort on the core intellectual property of Amazon, namely the distributed order management, supply chain, logistics an d integration to wholesales, also has been the catalyst of many of the ancillary services the company also is selling during the case study's timeframe.

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By creating a scalable platform that could extend beyond just online retailing, Amazon had completely disrupted e-commerce. This soon attracted the world's largest competitors in the e-commerce, retailing and distribution industries. The decision before Jeff Bezos and his executive team is whether to compete head-on with eBay with an auction business or capitalize on their extensive infrastructure expertise and launch a B2B-based trading exchange. The Amazon senior management team will need to weigh the intensive level of intellectual property required to succeed in an auction business, while looking at how they can capitalized on the decades of expertise in distributed order management, logistics, retailing and the orchestration of multiple distribution channels with the B2B trading exchange......

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