Case Analysis

Essay by PaperNerd ContributorUniversity, Master's November 2001

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About In July 1995, the time when the Internet usage was growing at 2300 percent a year, Jeffery Bezos launched his venture,, on the Internet. By the end of 1996, his firm was one of the most successful Web retailers, with revenues reaching $15.6 million. As revenues surged quarter after quarter, Bezos decided to take his company public. To date, his attempts to transform the traditional book-retailing format through technology that taps the interactive nature of the Internet has been very successful. Now is growing to become the center of e-commerce. However, continues to face many formidable challenges such as big competition in the industry, building up the unique core competencies to compete with the competing businesses and keeping up with the new developing technologies.

External Environments: Opportunities and Threats The competition in the Internet business is very high because there are almost no barriers to entry due to the flexible and non- regulated environment.

The suppliers, which in this case are the publishers, can exert power over firms because they are a credible threat to integrate forward into the book-selling industry, by dealing directly with customers. There is also the potential for publishers to be ¡°disintermediated,¡± because computer literate writers can now publish and distribute their own works online and eliminate the existence of the physical books. This increases the substitute products and the bargain power of the customers because instead of getting a book, customers can search the Internet and read what those computer literate writers had published, at no cost. Also, the competition in this industry is very vigorous. For example, is expanding their selection to become the center of e-commerce, and Barnes and Noble reacted to action by concentrating in gaining a larger...

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