Running head: AMAZON.COM EVOLUTION
University of Phoenix
Amazon.com??™s initial strategy was to become the largest online bookseller in the United States. The vision and core competencies are the essentials to making a business work. There are three characteristics that identify core competencies. First, a core competence will make a company able to grow across different fields. A second characteristic includes the ability to contribute to the customers assumed benefits of the product or service. Finally a core competency should be difficult for a rival to imitate. Amazon.com??™s core purpose is to offer everything it can to their customers. This purpose is so the customer does not have to go anywhere else but to only one amazing website. Amazon.com??™s core competency lies within their systems. The vision of the company is to operate for the customers. Amazon.com??™s systems enable them to offer the customer almost anything through their website. Their core competency is developed through their overall vision of what customers want now and in the future. By using these two ideas in conjunction with one another, Amazon.com will be able to survive among competitors who do not see the future clearly. It is clear that Amazon.com is not moving away from its core competency of being a leading online retailer it is expanding and growing as the customers??™ needs expand and grow.
Amazon.com is competing with Google and Microsoft to build a web-based, global competing platform which includes computing storage and the renting of processing power. Hardware has always been available as a service through dedicated hosting providers, but it was never so well abstracted until Amazon introduced S3 (Simple Storage Service) and EC2 (Elastic Compute Cloud) with dedicate hosting Amazon makes it painless. Amazon spends massive funds to obtain information superiority. Such efforts could represent new growth areas and smart diversification moves for the web giant. Or they could prove to be costly distractions. However, there is a big problem: Should a company stay focused on the core competencies and competitive advantages that made it great, or should it diversify to keep up with, or attempt to surpass, its peers It??™s one of the trickier questions facing Internet companies because the barrier to entry is so low for many online business models. Like a classical economics theory, companies should leverage existing expertise or assets into new businesses to generate returns. It??™s extremely difficult to figure out what asset, such as customer relationships, product design or manufacturing prowess, to leverage. Meanwhile, companies need to balance the requirements of running their current businesses with the demands of operating new ones. In a fast-changing market, you must innovate and diversify to keep up, but on the other hand there are risks of diversifying too much. The opportunities are real. Amazon now generates millions of dollars in revenue from Amazon Web services but they still have to stay ahead of the innovation curve, and keep optimizing for growth. Amazon??™s gamble is that its name recognition will help it garner additional sales in these new areas is a wise strategy.