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Amazon.Com Case Study

Essay by   •  August 9, 2011  •  Case Study  •  801 Words (4 Pages)  •  1,015 Views

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Amazon.com

In today's globalized business world, companies are faced with challenges that force them to go beyond their initial purpose and expand into other venues in order to prevail. Seattle based e-retailer Amazon.com simply began as an online bookstore. Its overwhelming success transformed the company into one of the leading retail and technology giants. However, Amazon.com's overwhelming success may turn out to be its weakness as well.

Amazon started out as primarily a retail store. It has since expanded and marketed new business resources for individuals and organizations. After discovering they were only using about ten percent of its processing capacity, Amazon decided to make parts of its infrastructure available to companies and individuals to help them run the technical and logistical parts of their business (Rainer & Turban, 2008). Amazon is not moving away from its core competency, but adding new competencies. The company is still best known for its online retail side with sales in excess on ten billion dollars. However, because the company spent 12 years and about two billion dollars designing and building their infrastructure, but only use ten percent of it, they felt a lot of time and money was being wasted. This led the company to the decision of selling services as well as books. Providing business services allows Amazon to be more competitive among its competitors. The new age of internet technology is fast approaching and Amazon strives to be one of the top performers in the industry.

Amazon.com competes with Google and Microsoft as an electronic commerce company with its Base, Book Search, Maps, and Checkout applications. Electronic commerce is the buying and selling of products, services, or information via computer networks, including the Internet. (Rainer & Turban, 2008) It also develops software products and services to compete with Microsoft, this is evident in the fact that amazon.com chooses to build instead of buy virtually every piece of technology it uses, though, illustrates the fact that it resembles a software company more than it does a merchant. This technological architecture gives Amazon.com control of every aspect of the customer experience, from design to service. So far, amazon.com has invested roughly $1.1billion in its technology platform. (Haeberle 2003)

Investing in one of the biggest and most reliable infrastructures in the world, Amazon.com utilizes only ten percent of its infrastructure on its online store. Because of such huge leftover capacity, the company seeks growth in new business. Three services Amazon now offers are the Simple Storage Services (S3), the Elastic Compute Cloud (EC2), and the Mechanical Turk (Rainer, 2008). S3 is a data storage system. Using EC2, customers rent out processing power, and the Mechanical Turk service combines processing power with networks of real people. Amazon faces data

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