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| Words: 2080 | Submitted: 31-Aug-2012
96.4% | Number of pages: 7 | Filetype: Word .doc
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Amazon has the first mover advantage in online bookselling industry. In the onset of 2004, it is named to be number one in on-line service, has six website servers, 32 million customers in 150 countries, 900,000 associate programmes linking up or having contents of Amazon. However, it can influence the general and industry environment (a possible strength/ weakness creation) or be influenced in return (a possible opportunity/ threat eruption). Its objective then should not be strictly based on competitive action and responses implementing its mainstream strategic plot of expansion through customer innovation. This paper presents PEST and Five Forces Analysis, internal resource audit, value chain analysis and core competency identification of Amazon. It will show why the firm needs to modify and adapt its strategic outlook relative to its environment and internal resource and capabilities.
Although internet security and systems have improved, the wide inequality of technology distribution in the global arena undermines the endeavors of technology- and innovation-based firms like Amazon. Apparently, sales of these companies will be limited to the top 20 countries that posted an average of at least 50% of internet penetration against the bottom 200 of less than 5%. The more-or-less 90% of global population without internet access is aggravated by the top 20’s similar condition although prospects for the latter of becoming potential on-line customers are definitely higher than the bottom 200.
Further, building the technological environment for the bottom 200 could be a relatively easier national concern than building the necessary human capital to facilitate and use such infrastructure. This fact goes beyond the budget limitation of institutional segments (government, businesspeople, and academic foundations) and requires subsequent, if not preceding, popular culture approval. The less tolerant cultures like that of Chinese to Western aspirations is an example of e-commerce challenge belittling the power of technology against the rule of cultural supremacy that is conservative of modernism uncertainty that could attack political and cultural beliefs of local population.
Finally, the importance of technological education for both customers and businesses is an indispensable platform required to augment internet penetration and socio-political resolutions. Amazon’s case charges against email forgeries in 2001 and 2002 implied the adversary effects of e-commerce to consumers and legal services providers alike including the government’s capacity to earn. With incentive to learn the technology skewed to profit-based opportunists, legitimate benefits attributable to core stakeholders will only be sub-optimal and could ultimately pilot to discourage customer reliance on online shopping leading to unnecessary costs accruing to technology providers (litigation, advertisements) and government (monitoring).
In the less internet penetrated countries, foreign direct investments not simply portfolio capital is needed to stimulate the demand for e-commerce at a significant level. This move would be limited to open countries while close countries could be approached through amplified political relationships, possibly ...
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