Discuss the Pros and Cons of Amazon's Growth and Business Diversification

Discuss the pros and cons of Amazon's growth and business diversification

The purpose of this paper is to discuss overall business growth and the impact of Amazon becoming a family brand, determine the possibility of Barnes and Noble and Borders extending their markets, and determine what Amazon.com would need to do to expand their distribution chain. Amazon has done an outstanding job in making the business of buying books online convenient and less time consuming. The advantages of Amazon are that they provide a cost-effective way of meeting the needs of the American people when it comes to buying products online, and reach the global markets with their goods and services regardless of geographic location, making it easier for someone to shop 24/7 online without leaving the comfort of their home. In addition to all of the above, Amazon Supplies a wide variety of products within a few clicks, providing assistance in building relationships though online communication, offering different payment methods making it easy and safe to shop online, regardless of location. The technology that Amazon uses help speeds up the process of purchasing products online. Amazon now allows customers to upload product video reviews and express their shopping experience.

"Despite the largest online retailer with annual sales in excess of $10 billion, Amazon has not shown the consistent profit that investors have expected" (Rainer and Turban, 2008). This is a disadvantage to their investors; on the other hand, customers are not at a disadvantage when it comes to the profit. Amazon has broken into the market; selling books, movies, music, electronics, apparel and computer services. In my opinion, advantage of Amazon diversifying their products, allows them to sell different kinds of product online to their customers and increasing their net profits. If Amazon has not diversified their products, they would lose their opportunity to increase their market share and build the company reputation of being the one online business. One recommendation I would subject is that Amazon can better develop and increase their marketplace, if they want to keep up with growing competition.

Determine the impact if Amazon.com had split up and become a family of brands, each witdifferent public face but all run by the same parent company.

I believe that if Amazon becomes a family brand, such as "Amazon "for books, "Supertoys" for toys, Amazon would have a problem integrating into the marketplace, because no one would recognize the names and all the brands name would look the same in the marketplace. Amazon name is popular and name that customer can easily recognizable. According to case study by Vadim Kotelnikov; "Amazon.com has steadily increased its spending on advertising and promotion to make its brand stronger and build brand equity"( Vadim Kotelinikov, 2010). When a company presents its brand it becomes a vital part of the company success and profit, making the company brand different from other companies. Amazon as a company has a reputation to uphold, similar to a person reputation, they much focus on building services that are created in detail for the customer. One of the greatest things Amazon offers is automated customization for its customers and users. In today's society customization is in high demand for everyday consumers. The name Amazon speaks volume to the consumers seeking their product because it is well known and Amazon stands behind their customer service.

Determine if Barnes and Noble or Borders can extend their markets in the same way that Amazon.com has. Explain your rationale

Anything is possible; if companies knew their competitor's, objective in the marketplace and successful strategize their company; company can stay on top of their competitors. It would be impossible for Barnes /Noble and Borders to extend their markets to compete with Amazon. In reading about Barnes/Noble and Borders, I did not know they filed bankruptcy in February of this year and I through they were key players of the book retail industry. Border had long been the front runner in big book store market; however, in recent years they have not been able to change with modern world. Borders was very slow to get into e-commerce marketplace, initially relying on Amazon as their e-commerce branch, they were slow to respond to decreased customer demand for things like CD's and DVD's, and unable to successfully break into the e-reader market (Bosman & De La Merced, 2011). As far as the near future goes the future of Borders as a company is uncertain and expanding now would be impossible. Borders have experienced slow growth over the year, which gave Amazon.com the profitable increase to be the top leader of the e-commerce