Amazon, founded by Jeff Bezos is the largest and most successful Internet-based retailer in the
United States The world. Amazon started as an online book retailer in 1994 in Washington and moved ahead to becoming a global leader in e-commerce with a very wide selection of products, amazing customer experience, world wide network of fulfllment, 28,000 + plus employees and a business that has “stickiness” ( i.e being able to bring customers back – again, again and again ) Amazon utilizes the Cost Leadership Strategy to gain competitive advantage, this doesn’t only place the company as a leader in it’s industry but also attracts customers for them.
They also make use of EDLP ( Every Day Low Price ) technology. If you haven’t read my post on Strategies to gain competitive advantage for your business, kindly read here To become such a successful brand, there are some behind the scene strategies that the company makes use of inorder to kick competitor’s butt and gain large market share. This post is not to “big up” amazon, rather, it is to “expose” the behind the scene strategies used by the company, so, hustlers, entrepreneurs, small and medium businesses can take advantage of a proven model.
‘To ‘Get Big Fast’ by investing aggressively in new product categories and new businesses, by spending money on brand awareness and getting new customers.’
‘To leverage technology and the expertise of our invaluable employees to provide our customers with the best shopping experience on the Internet.’
To be earth’s most customer centric company; to build a place where people can come to find and discover anything they might want to buy online.’
‘Not to discount a small number of products for a limited period of time, but to offer low prices everyday and apply them broadly across our entire product range.’
Amazon’s Core Value Proposition
The below diagram explains the Strategy used by Amazon.com. I will try to break i down as follows : Inorder for the company to experience Growth, there is a need to create a Lower Cost Structure which will translate to Lower Prices for their customers and in turn improve Customer Experience which is tied to the fact that customers can browse through a wide Selection of Products with Convenience which is made possible by the numerous independent Sellers on the Amazon.com platform. All this combined together brings Traffic to the website and makes them a global leader in e-commerce.
Another interesting strategy by Amazon is it’s ability to improve, innovate and leverage on its success to build and introduce new categories for its business as the years go by. As stated earlier, it started off as an Online Book Retailing Store in 1994. In 1999 it added the Auctions & zShops.
With bigger dreams and aspirations to become a one-stop shop for books , it opened it’s doors to independent authors with the introduction of its Marketplace in 2000. To enable it provide faster deliveries to its ever increasing customer base it created Strategic Partnerships & Logistic Services in 2001. Amazon launched it’s full flesh E-commerce Platform/ Web Services in 2002 and introduced the E-book / Kindle in 2007. 2009 and 2013 saw the introduction of Amazon Publishing and Amazon Autorip respectively…and the list goes on. 🙂
One thing to grab from Amazon’s business model evolution above, is it’s ability to evolve, improve, innovate and not get too comfortable with it’s successes. Hustlers and small business owners can take a close look at Amazon’s Vision, Mission, Objective, Strategy and Value Proposition to create the underlining principles and building blocks that forms their business.