Amazon.com, Inc was incorporated on 28 th May 1996 with an objective of offering products and services online through its website ( Amazon.com, Inc. Form 10-K .) . The corporate is operational through its North America, Amazon Web service and internationally as the significant segments. The company offers merchandise and products purchased from vendors for resale. The Company also manufactures and sells electronic devices in the local and the international market. Amazon.com Inc, through its subsidiaries, Whole Food Market, Inc, trades in food products. The company also offers database service and advertising. It provides a platform for businesses to sell their products on its website and their websites. This paper is an analysis on Amon.com, Inc acquisition strategy and the results of the undertakings.
Profitability Influence of Three Amazon.com Growth Strategies
The measure of profit drivers informs developing strategies to improve them while maintaining minimal cost levels ( Amazon.com, Inc. Form 10-K .). Amazon.com, Inc’s policies to make the business activities more profitable involves increasing sales creatively, the cutting down costs and finding a way to save money. The Company also prioritizes strategies chosen and selects the most imp torrent based on expected yield.
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Generic Strategy Competitive Strategy
Amazon.com, Inc pursues a competitive advantage strategy in developing the business activities in the midst of stiff competition in online marketing ( Amazon.com, Inc. Form 10-K .). Amazon.com, Inc being the largest retailer conducting its business in the world proves to be exemplary competitive. Implementation of an effective generic strategy enables Amazon.com to penetrate the global market easily. The company provision of e-commerce services to customers outside the United States allows Amazon.com to grow international. The generic competitive approach enables Amazon.com e-commerce platform to offer goods and services at an affordable rate.
Amazon applies a cost leadership as a generic strategy for a competitive advantage ( Amazon.com, Inc. Form 10-K .). Due to the large size of the organisation, Amazon can benefit from economies of scale. The scaling down of operational cost is Amazon’s objective in the generic competitive strategy. Amazon.com, Inc has in force an advanced networking and computing modern technologies to maximise operational efficiency.
Market Development and Penetration Strategy
Amazon utilises market development as its intensive growth strategy. Amazon initially began offering its online services in the United States ( Amazon.com, Inc. Form 10-K .). Currently, it extends its boundaries to Canada, United Kingdom, China, and India. Market penetration is an intensive growth strategy in the online business Amazon.com conducts. The objective is intensified on generating revenues from the current markets and taking advantage of the increasing consumerism. Market penetration is also responsible for the rapid initial development of the market in the United States. The strategy increases sales which in turns increase the income bracket.
Product Development and Diversification
Diversification is the least important among Amazon revenue improvement strategies ( Editorial, 2018 ). Amazon has grown through an intensive growth strategy based on new businesses ( Amazon.com, Inc. Form 10-K .). The company grows through the acquisitions of Audible which is a significant producer of audiobooks. Amazons acquisitions aim to build the e-commerce business through a strategy by applying aggressive acquisitions.
Profitability of Amazon.com Acquisitions and Investments
Amazon.com has substantially invested in more than 128 companies which have taken it two decades. Safaba Translation Solutions which is a machine based Pittsburgh translation firm has six years being part of Amazon ( Editorial, 2018 ). The machine facilitates the translation of text messages from one language to another saving on operational cost and improving effectiveness. Amazon also acquired Evi Technologies for more than twenty-six million US dollars finally purchasing its intellectual property ( Editorial, 2018 ). The intellectual property is the ability to translate sound into text and generation of voice response which enables Amazon to create its digital assistants. The feature aids the Amazon capability to offer more e-commerce services. The customers get to trust the platform, and they are guaranteed reliance upon which in turn increases turn over and altimetry the profitability of the company.
The company has an investment in clothing and accessories through Alexa Funding Recipient ( Amazon.com, Inc. Form 10-K .). The company sell apparel through e-commerce and also develop fashion technologies.
The company has a yield a substantive amount of income for the company since the products can gain a significant market share. Amozon.com is also part of investors in Owlet Babycare who develop smart socks that monitor infants vitals. Amazon injected fifteen million US dollars in the company, and they advertise through Amazons platforms yielding double profits for the company.
Effects of Equity Investment and Impairments
Amazon.com usually invest excess funds in investment with intermediate-term and fixed income securities, and triple-A rated money market funds ( Amazon.com, Inc. Form 10-K .). The financing included in the financial statement as cash and cash equivalents or marketable securities. The equity investment is accounted for by utilising equity method of accounting if the investment gives Amazon.com ability to exercise but not control ( Amazon.com, Inc. Form 10-K .). The effects of Amazon.com equity investment is that the company get to enjoy profits at no additional cost.
The companies Amazon.com invest in also utilise its e-commerce channel to market their products offering multi-income platforms for the company ( Amazon.com, Inc. Form 10-K .). The plan undertaken by Amazon.com to invest in equity investment and impairments were creatable strategies since Amazon.com does not have to incur the opportunity cost of holding cash. The company also solve the problem of stocking excess cash in financial institutions or fewer return investments. The company also embarks on the strategy as a portfolio so that in case of poor performance, multiple sources of income will substitute for the equilibrium.
European Market Growth and Amazon.com Profitability and Earnings
The growth of the European market can have a significant impact on the earning and profit earned by Amazon.com. Amazon.com recently overtook Google as America’s second largest company by public market capitalisation. Amazon seems to be earning it profitability not only from it core local foundations but also from cloud computing, advertising, and subscription services. Amazon seems to be doing well, and growth in the European market will be another platform to enlarge its business venture activities.
The endeavours are mostly supported by the diversity of the European market that takes the e-commerce activities to an advanced level. The profit and earning for Amazon.com from Europe are also in line with its current big push for Prime in Europe by buying someone thousand three small warehouses that will act as it distribution points. The new distribution lines are meant to expand Prime now and its one-hour delivery service system for Prime members. Amazon will take advantage of the market opportunity available in Europe and mostly Germany in the delivery of groceries.
References
Amazon.com, Inc. Form 10-K .
Editorial, R. (2018). $ $ Company Profile | Reuters.com. Retrieved from https://www.reuters.com/finance/stocks/company-profile/AMZN.O
