Amazon's Competitive Forces and Value Chain Model

INFORMATION SYSTEMS
MANAGEMENT

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Contents
Introduction............................................................................................................... 1
Amazon’s competitive forces and value chain model............................................................1
Competitive forces................................................................................................... 1
Value chain model................................................................................................... 1
Amazon’s evolving business strategy............................................................................... 2
Different markets in which Amazon.com is expanding..........................................................3
Competitive advantage of Amazon.com............................................................................3
Product marketing....................................................................................................... 3
Future success............................................................................................................ 4
Conclusion................................................................................................................ 4
References................................................................................................................ 5
Introduction
In the time when the e-commerce has a critical role to play in the modern day business,
companies like Amazom.com are leading the industry (Ritala, Golnam & Wegmann, 2014).
Not only the competitive power of Amazon has become extensively better but it has also

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improved the ways in which they enhance the customer satisfaction. This report is going to
illustrate the ways in which Amazon is working its competitive power and on its business
strategy along with the markets in which they can expand. Company’s 5P’s has been
provided in the report.
Amazon’s competitive forces and value chain model
Competitive forces
 It has small producers as their main suppliers which help them in reducing the cost of
items they are selling.
 Use of advanced technologies especially marketing technologies better than
competitors.
 Huge financial resources and investors base that helps in making investments
whenever they find opportunities.
 It is everything store hence people find it first option when they have to purchase
anything (Rothaermel, 2013).
Value chain model
Primary activities
 Inbound logistics: Since this company has long-term arrangements or contracts with
their vendors that ensure the availability of merchandises, specific payment terms or
the extension of credit limits. This firm takes the full responsibility of their customer
service, logistics and also return of product.
 Outbound logistics: Amazon uses the concept of overnight delivery and ensures that
products are delivered to the customers on time and with proper care (Peppers &
Rogers, 2013).
 Marketing and sales: Their marketing expenses are increasing every year. The major
component of their marketing and sales initiatives is the message their deliver through
their marketing where they promise the largest section of services and products, fast
delivery of products, fast delivery of products along with super customer services.
 Operations: Amazon.com operates at the international levels. They are looking for
other countries as well for their expansion. Continuous rise in the international sales
of the company has been noticed.