Amazon kindle.docx
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Amazon kindle.docx
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Amazonkindle
StrategyAnalysisofAmericaAmazon.Com
Contents
1.Introduction---------------------------------------------------------------------------------3
2.Externalenvironment----------------------------------------------------------------------3
2.1Industry’sbusinessandeconomictraits--------------------------------------------3
2.2Competitiveforces---------------------------------------------------------------------4
2.3Drivesandforcesofindustrychange------------------------------------------------6
2.4Marketpositionofindustryrivals---------------------------------------------------7
2.5Predictingthenextstrategicmovesrivalsarelikelytomake--------------------7
2.6Keyfactorsofsuccess------------------------------------------------------------------7
2.7Industryoutlook-------------------------------------------------------------------------8
3.Internalenvironment------------------------------------------------------------------------8
3.1HowwellistheAmazon’sstrategyworking----------------------------------------9
3.2SWOT------------------------------------------------------------------------------------9
3.3ValueChain------------------------------------------------------------------------------11
4.Strategyissue--------------------------------------------------------------------------------13
5.Conclusion-----------------------------------------------------------------------------------13
6.Reference------------------------------------------------------------------------------------15
1.Introduction
Inthisreport,wewilldiscusssomeissuesaboutAande-readerindustry.AisthepioneeringbookstoreontheInternetthatfirstopenedinJuly1995byJeffBezos[1]
(Velasco,2000).Amazonhasdevelopedakindofe-readercalledKindle,whichhasenlargeditssaleseffectivelyandefficiently.
Followingisthestructureofthisreport.First,wewillanalyzethemacroenvironmentandindustrylevel,whichisalsoknownasindustry’sexternalenvironment.Second,wearegoingtodiscusstheinternalenvironmentofthefirm,includingresources,capabilitiesandcompetencies.Then,wehavetoidentifythemajorstrategicissues.Lastistheconclusion.
2.Externalenvironment
2.1Industry’sbusinessandeconomictraits
Whenitcomestomarketsizeandgrowthrateofthisindustry,wemustsaythatalthoughthisindustryisnotquitelarge,ithasbeendevelopedatfullspeedwithintheseyears.Itcanbeeasilyseenthattheindustryhasgetintothepositionofsaturationandstagnation,whichmeansthemarkethasbeenfullofthecompetitionandthedevelopmenthasbeenlimitedalready.Thesecondtraitisthattheindustryhasactuallybeendominatedbyafewlargecompanies,suchasAmazon,Barnes,NobleandSony,whichhasbeenfocusedonin2010.Theorderisalsotheirmarketshare,asisknowntoallthatAmazonistheleadermainlybecauseofitsseveralkindsofkindle[2](ascitedinGriffey,2012,p.14).Accordingtosomesurveys,thedemandofe-readersisactuallynotverylarge,amajorityofpeopleusethatforleisure,furthermore,highpriceisalsooneofthemainbarriers[3](Foasberg,2011,p.108).Thefinalpointisinnovation,whichhasbeenplayingacrucialroleine-readerindustry.Fortheinstance,theLCDscreenhasbeenreplacedbye-ink,whichfunctionstoprotecteyesandmakereadersbeabletoreadinthesun.Therefore,thepaceoftechnologychangeisquitefastandR&Disprettyimportant,whichhasledtotheshortproductlifecycleintheindustry.
2.2Competitiveforces
Inthissection,wewillusethefive-forcesmodelofcompetition[4](Porter,1979,pp.137-45)toanalyzethecompetitionenvironmentofe-readerindustry.
Competenceofe-readerindustry
2.2.1Thecompetitiveforceofbuyerbargainingpowerandseller-buyercollaboration
Thepressurefrombuysisverystrong.Aswecansee,buyers’switchingcostisverylittle,becausealltheyhavetodoisjustthrowouttheoldoneandthentobuyanewone.Thequantityofbuyersareatmiddlelevel,bute-readerhasbeenacceptedbyincreasinglyamountofconsumers.Furthermore,manylargelibrariesstarttopurchaselargevolumesofe-readers,whichhasbeengraduallyutilizedbyacademiclibraries.Thelastpointisthat,consumersalwayscanwaitforaffordableprice,becausee-readersarejustanassistance,butnotessentialtodailylife.
2.2.2Thecompetitiveforceofsubstituteproducts
Thecompetitiveforceofsubstituteproductsisstrongaswell.Thebiggestcompetitoroutsidee-readerindustryisApple,especiallyipadandiphone,whichnotonlyhavecolorscreenbutalsohasallofthefunctionbelongingtoe-readers.Anothercompetitorispaperbooks,acertaingroupofindividualslikethefeelingofrealpaperandtheweightofrealbook.Thatistosay,somekindofbooks,suchasacademicbooks,cannotbesubstitutedbye-books,atleastrecently.
2.2.3Thecompetitiveforceofsupplierbargainingpowerandsupplier-sellercollaboration
Thecompetitiveforceofsuppliersarequiteweak.Let’stakebooksasanexample.Therearenumerousbooks,suchasnovels,biography,academicbooks,comingoutcontinuouslyeveryday.Thusbooksareoneofthemaininputoftheindustry.Firstly,booksareavailableeverywhere.Secondly,sellers’switchingcostisquitelow,sometimestheyhavetopayforbreakingthecontracts,sometimesthereisnorestrictionsatall.Lastbutnotleast,industrymembersarealsoabigthreattothesuppliers,fortheemergenceofintegratebackward,suchasAmazon,theyhaveconservedaplentyofbookswhichistheirownresources.
2.2.4Thecompetitiveforceofpotentialnewentrants
Theforceisweakaswell.Oneofthemainreasonisthatthebarrieristoohigh,suchasthelackofhigh-techandknow-how.Anotherpointistheindustrymembersaretoostrong,Amazonisthebiggestonlinebookstore,whichistheactualforcesupportingkindle.InadditiontoKindle,therearemanyotherfamousbrandsuchasSonyandNoble.Brandloyaltyhasalsobeenconsidered.
2.2.5Rivalryamongcompetingsellers
Theinnercompetitionisstrongaswell.First,theseveralbigbrandsofe-readerareactiveinupdatingandpromotingtheirproducts.Second,innerindustrydifferentiationisprettysmall,mainfunctionisalwaysthesame.Third,therequirementisgrowingslightly,mainlybecausethepriceisalittlehigh.Thelastpointistheswitchingcostislittleofcustomers.
2.3Drivesandforcesofindustrychange
Drivingforcesarethemajorunderlyingcausesofchangeinindustryandcompetitiveconditions[5](Gamble,2011,p.58).Thechangeofe-readerindustrymainlyduetoR&Dandthechangeofpeople’slifestyle.
IntermsofR&D,developmentoftechnologyhasmadethedesignofe-readerbecomemoreattractiveande-inkscreenhasmadepeoplebeabletoreadwithoutthehurtofeyes.Technologyalsohasloweredthemakingcost,whichhasmadee-readerbeaffordabletothepublic.However,thecopyrighthasbeenthreatandcompanieslikeApplehavebeencomingtosharethemarket.Thelastpointisactuallyquiteserious.
Intermsoflifestyle,peopleprefermulti-functiondevicessuchasipad,whichcomeswithfunctionsmuchmorethane-reader,becausefinancialdevelopmentmakepeopleaffordmoreexpensivedevices.
Inconclusion,thedrivingforceshasincreasedthedemand,madecompetitionmoreintensiveandledtohigherindustryprofitability.However,asisknowntoall,theindustryhasalreadybeenmatureandthedevelopmentislimited,themostimportantissueisthecopyrightandbrandloyalty,companiesshouldbefocusedontheresourcesofe-booksandbrandloyaltydeveloping.
2.4Marketpositionofindustryrivals
Themarkethasbeendividedbyseveralseniorbrands,suchasAmazon,Barnes,NobleandSony,thusitishardforlittlebrandstosurvive.Amazonistheleaderofallofthebrands,whichhasoccupiedthelargestmarketshareinAmerica,mainlybecauseofitsconvenientdesign,affordablepriceandwell-establishedbrandloyalty.BarnesandNobledonothavethelargee-bookresourceasAmazonwhileSonyhasmanyotherhigh-techdevicesandignoredthenichemarketofe-reader.
2.5Predictingthenextstrategicmovesrivalsarelikelytomake
ThemostimportantrivaloftheindustryisApple.AlthoughAppledoesn’tproducee-reader,yetalmostallofitsproductshavethefunctionofreading.OnepointisthatApplecanmakeitsipadmoreportable,anotherpointisthatApplewouldcompeteforthecopyrightwithAmazonbecauseofitsstore,whichcanprovidealargenumberofbooksforconsumersaswell.
2.6Keyfactorsofsuccess
Keysuccessfactorarethestrategyelements,productattributes,competitivecapabilities,orintangibleassetswiththegreatestimpactonfuturesuccessinthemarketplace[6](Gamble,2011,p.67).Firstly,tech-relatedfactorisessential.Itishigh-techinnovationandupdatethatdeterminewhetherthebrandorproductcanattract,orevendominantthemarket.Secondly,distributionisalsocrucial.ItisstrongdistributionsystemthatmakesKindleandAmazonbesuchpopular,becauseitissaidproductscanbesenttoreceiverswithinoneday.Thirdly,marketingcanmakeproductmoresuccessful,suchastheestablishmentofbrandimage,whichcanattractplentyofconsumerstobeloyaltoacertainbrand.ThefansofKindleissuchanexample.Finally,thecapabilityandskillsofproductmatter.Alltheuniquetraitsofe-readeristhereasonwhyconsumerschooseit.Forexample,comparedwiththeforthrightofKindle,ipadisnotonlyexpensivebutalsohastoomanyannoyinginformationwhichisquitedisturbed.
2.7
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