�

Table of Contents

3QUESTION 1: ANALYZE AMAZON.COM USING THE COMPETITIVE FORCES AND VALUE CHAIN MODELS �

11Question 2: Discuss how Amazon has responded to pressures from its competitive environment �

12Question 3: Describe the ways in which Amazon.com provides value to its customers �

14Question 4: Describe Amazon's evolving business strategy and explain why Amazon.com decided to change its strategy �

18Question 5: Do you think Amazon can continue to be successful? Explain your answer. �

20Question 6: Using an appropriate diagram: explain how Amazon utilises technology to conduct business with suppliers and customers �

24Bibliography �

�

QUESTION 1: ANALYZE AMAZON.COM USING THE COMPETITIVE FORCES AND VALUE CHAIN MODELS

The Five Forces

According to Porter there are five areas of the external environment that affect the profitability of the firm.

Amazon.com Welcome New Hires!

English: Amazon warehouse in Glenrothes, Fife; sou...

Figure 1

Porter's Competitive Forces Model

Figure 1: In Porter's competitive forces model, the strategic position of the firm and its strategies are determined not only by competition with its traditional direct competitors but also by four forces in the industry's environment: new market entrants, substitute products, customers, and suppliers.

Supplier Power

This force describes the ability of the firm's suppliers to dictate the terms under which they operate. Weak suppliers may have to accept the terms that the firm offers, which allow the firm to appropriate some of the value of the product for itself, effectively taking some of the profit from a firm higher up the production chain. However, strong suppliers can push prices of their goods higher than the firm wants to pay and reduce the profit margins.

Amazon's suppliers range from the publishing and media houses to electronics' manufacturers. Amazon buys all their books, videos and audio...