Case Analysis

Essay by EssaySwap ContributorUniversity, Master's February 2008

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There has been a major development in the Book industry in the past few years that has created quite a commotion. This development was the online virtual bookstore. Until this time, the biggest problems facing bookstores was delivering the right amount of books to the bookstores and alerting the customers of new titles that they would be interested in. Traditional bookstores mostly work on a consignment basis so that bookstores would be able to carry a large amount of inventory without the high overhead. Virtual online bookstores eliminated this problem. Virtual bookstores have the ability to order their books when they are needed. This is accomplished because virtual bookstores do not need to maintain inventory for their customers to physically examine. All the examining is done through the Internet. They can also inform their customers of new book titles by emailing updates to them. was founded in 1994 by Jeff Bezos and is the leader in the virtual bookstore revolution.

He founded this company on the premise of offering a larger variety of books at a lower cost than the normal bookstores. This is clearly an example of an integrated cost leadership/differentiation strategy. Amazon offers great value to its customers by providing them with a unique product and service. There are over one million titles that customers may choose from at the Amazon site. All the way from the most popular titles, to the most obscure, customers are able to find the right book and purchase it to be delivered within a few days. Some of the large bookstores may carry only a fifth of that number and will sometimes charge an extra fee for placing a special order for a book. Also Amazon offers synopses, excerpts and book reviews by professional book critics as well as user reviews...