Analysis of Amazon Company Business Aspects

Subject: Company Analysis
Pages: 3
Words: 846
Reading time:
3 min
Study level: College

Amazon company is a well-known Interned-based enterprise that primarily sells goods online and practices e-commerce. The company was based in 1994 by Jeff Bezos, and now is one of the largest business structures in the United States and the world. Aside from the online store, Amazon has physical stores, streaming service, advertising business and other structures. The business model of the company is diversified due to its scope and size. This essay claims that along with the business model, vision and mission of the company make it highly successful, and justifies it with three tests of Winning strategy.

Operating income of Amazon is driven from service sales, such as revenue sources, subscription, and web services. Therefore, the business model is a combination of various business structures. Regarding value proposition, Amazon offers most convenient, wide-ranged, and affordable products and services to its customers. It applies leveraged technology that no longer needs stock inventory, while competitors deal with costly stock inventory (“Spend less. Smile more”, n.d.). Revenue model of the company is mainly based on commissions and fees from making the borrowers and sellers meet. Other revenue sources include Kindle marketplace, Amazon Prime and Web subscription, and Amazon Prime service. With the effective use of advanced technologies, the company pioneered contactless stores, named “Amazon Go”. Moreover, the company is scalable and not human or capital intensive, so it can enter new markets smoothly.

The company has a clear vision and mission that lead it to global development. Its mission statement is to “serve consumers through online and physical stores and focus on selection, price, and convenience” (“Spend less. Smile more”, n.d.). The vision of Amazon is “to be Earth’s most customer-centric company, where customers can find and discover anything they might want to buy online, and endeavors to offer its customers the lowest possible prices.” (“Spend less. Smile more”, n.d.). It can be said that the company fulfills its mission through its goods and services that are used worldwide. The company’s CEO, Jeff Bezos applies a customer-oriented approach as well as focuses on shareholders when making operations and changes in the business. For example, his annual letter to the shareholders informs about the enterprise’s distinguishing aspects and its performance. He attaches the first letter of 1997 to the annual letters to show the core values of the company and its development during a long period.

The success of Amazon company can be tested by three Winning Strategy tests. The competitive test illustrates how well the business structure results in a strategic performance. Its business strategy, ideas, innovations, technological research and partnerships make Amazon a trillion-dollar company. The enterprise’s core strategy is to enter new markets, such as logistics, ride-hailing, and food delivery services, that are going well (“Spend less. Smile more”, n.d.) As such, the company aims to strengthen its patent portfolio, which is its main advantage over its competitors like Netflix. Compared to Netflix, Amazon has a wide range of goods and services. Moreover, the strategy ensures the brand loyalty of customers. This is because customers are well-acquainted with the brand previously, thus they will buy new products or use new services undoubtedly.

Another test is the goodness of fit test that examines the fitness of company’s strategy to its function. As a company with high income and established partnerships, Amazon can afford its ideas and even do research, contributing to the global technological development. In 2020, the enterprise had the most high index of the brand valuation, suggesting about its effective strategy (“Spend less. Smile more”, n.d.). The company’s growth and brand image also provide basis to assume that its strategy fits the situation in Amazon perfectly. Moreover, vision and mission of the company state what they provide to customers and what problems they solve, offering a variety of services and products. This demonstrates the enterprise’s attitude to its customers and applies its strategy effectively.

The last test is performance test that analyzes the financial performance of the business strategy. In 2019, Amazon had over $280 billion in revenues and over $11.5 billion in net profits (“Amazon: annual net income”, 2021). It demonstrates that the company’s strategy of entering new marketing and patenting goods is working successfully. The official reports of Amazon show steady growth of the company, and that the main source of income is its online services (“Spend less. Smile more”, n.d.). The strategy provides optimal growth for the company when dealing with various business types and structures. Kindle along with Amazon Prime sales are also increasing considerably due to the current pandemic, as customers start to read and watch series at home more (BBC News, 2021). The company could adapt to such changes, thus having a financial success.

To conclude, Amazon is the world’s fast-growing e-commerce company that provides good and services. It ensures convenience, quality, and affordability for its customers, increasing brand loyalty and brand valuation. Due to its strategy of constant expanding and applying new technologies, Amazon gains strategic as well as financial success. The company’s strategy passed three tests of a Winning strategy that are competitive, goodness and performance tests.

References Spend less. Smile more. (n.d.). Amazon. Web.

Amazon hopes pandemic habits stick after profits triple.(2021). BBC News. (2021). Amazon: annual net income 2004–2020.