Amazon

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Introduction
Amazon was supposed to be the new revolution in online shopping for retail. Unfortunately for Amazon it did not work out that way. They have made some changes in order to compensate for their losses. Their main goal now is to be a service provider. They still offer retail products but, that part of the business lost out to other web sites such as e-bay.com and youtube.com.

Moving Away from Their Core Competency
Amazon was forced to find a new way to compete with online retail websites. In order to do this they found a way to sell a service provider for their competitors. They now sell storage services, processing power, and a human powered processing center that does work that computers are not able to do. This actually worked well for Amazon. Millions of web based companies pay for this service. The service is said to save the companies that have been using Amazon a good amount of money. In my opinion I think this was a smart move on Amazons part. They had to find a new service to provide in order to compete with other websites. I think that this was thinking outside of the box and more than likely saved the company from going out of business.

Components of Amazon

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Amazon has incorporated three main components in their company the S3, EC2 and, the Mechanical Turk. These components are the new core of Amazon. The S3 or the simple storage service allows other companies to store data that they need to run their online service. Amazon charges .15 cents per gig per month to store information with them. The EC3 or the elastic compute cloud is a service that Amazon rents out at a rate of .10 cents per the hour per gigabyte. Companies can use this service to store all kinds of back up information that their business needs. This is not only making money for Amazon but, is also saving companies that use this service money. The Mechanical Turk is a service that is also provided by Amazon that uses real people to do the work that a machine would not be able to do. Companies use the Mechanical Turk to post for people to do work online Amazon receives a 10% commission for this service.

Management Problems That Can Arise
Since Amazon is completely dependent of their online customers many issues can occur. When you are dealing with large amounts of information it is important to be extremely organized. Everything can come down to human error. People in management need to have a high amount of knowledge of what is going on. They also need to be able to hire people who are capable of handling the job that is required of them. When in management if something goes wrong on the bottom of the chain it will be your responsibility. In order to be able to control these problems before they happen management needs to be fully equipped to handle the Amazon systems.

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Conclusion
In conclusion Amazon has added new services in order to compete with other web based retailers. Amazon originally set out to be the world??™s largest online retailer but, failed because of other competition. They found a new way to provide an online service by providing for their competitors. I think that this showed that Amazon had a good imagination for product. The product seems to work.