Rethinking the strategy of Amazon.com

Michael S.H. Heng
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Michael S.H. Heng: Vrije Universiteit Amsterdam, Faculteit der Economische Wetenschappen en Econometrie (Free University Amsterdam, Faculty of Economics Sciences, Business Administration and Economitrics

No 7, Serie Research Memoranda from VU University Amsterdam, Faculty of Economics, Business Administration and Econometrics

Abstract: The strategic challenge facing Amazon.com is that it is not able to convince the investment community that it is able to generate profits in the long run. The doubt of investors is well grounded. This paper argues that Amazon should make a strategic shift to operate as a provider of technical services and business consulting in the area of business-to-consumer e-commerce. At the same time it should reduce the range of the items sold on-line to, say, books and CDs, and treat this part of its business as a kind of research and development activity. Its avant garde status as e-commerce innovator and its track record in customer satisfaction have tremendous market value and can serve as an 'open sesame' to enter the huge market of e-commerce consulting. Its continuing survival and (hopefully) future profitability hold deeper implications for other dot.com companies and B2C e-commerce.

Keywords: Amazon.com; financial market; B2C electronic commerce; strategy (search for similar items in EconPapers)
JEL-codes: G11 L81 M13 (search for similar items in EconPapers)
Date: 2001
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Citations: View citations in EconPapers (2)

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