«Amazon: The External Market» - Great Essay Sample

«Amazon: The External Market»

clearly be shown by the high margin of sales obtained in the country. There has been over $10 billion in sales from the country. This information is highly motivating to any person who has invested in the business. The information can also highly motivate any possible investor to venture into that type of business since the niche is encouraging. The country has approximately 17,000 retail stores which also provide a relative and promising way through which the large population can get the books and meet the high demand of the books. However, there may be a population there that may not be met since not the entire population is satisfied with the service or the approach used by this retailers, this brings in the Amazon company which is a promising company that meets the clients demands by delivering the books to their door steps after they order the books online. This meets the demand of this people who can now shop or loan the books online at a premium.

In terms of sale of books in the retail industry it is somewhat different from what is in the United States at the moment. Whereas in the United States the industry is dominated by large companies that sell books and related products, in Japan the industry is dominated by small retail stores. This increases the rate of competition since the more the stores that offer the products there is high competition which has to be met by the quality of services or the prices offered by this companies. In the last year end the company that made most sales is the maruzen company which made about $ 850 million. This amount is large in relation to the other retails but the chunk is small since the country wide total sale was about $10 billion. This leads to the fact that the sales were low and that there is really high competition in order to add up to that figure of total sale.

The main users of the Amazon is the large number of book readers who use the internet and are accepting change from the old traditional system of buying books from stores or borrowing them from libraries. In Japan alone the number of internet users has been rising over the years with a high percentage increase in the internet users by over 20% in 2002, this is good for the Amazon Company since it shows that the people are quick to change and are ready to accept the new system of buying and borrowing books. This internet system also captures the young population who like using the internet and supporting new ideas. The books have also changed from the earlier physical hard copy system of books to the soft copy of books. This books are flexible and reliable since all u need is a device that can be used to view the book. This has made a staggering high sale since people are ready for change.

The main advantage that the company has over the other suppliers is the services which have been viewed as excellent and have acquired different awards in terms of the services. The internet services also give the company advantage over its competitors since people now do not have to go to their stores to buy the books or borrow them and can now get the same service at their comfort at home.

Internal analysis


In terms of its competition with retail traders it has a larger stake in the internet which is the latest trend of carrying out businesses. This is a good thing because by the time these small retailers decide to go into this new system the Amazon Company will have already established itself and created a good clientele already. This gives it a head start in this type of trading and doing business.

The company also delivers goods to the peoples door steps; this is somewhat different from other retail traders. This makes it far much easier to the customer, they now don’t have to hustle to go and look for the books in the stores. They now get the books and have them delivered to their place of residence. This convenience makes it far much convenient than the traditional system. The company has taken advantage of this idea of convenience and made it its main seller of its idea of retailing books. This enables it to meet its competition with ease since the type of service is hard to come about.


There is a huge competition with the new company in Japan, Rakuten. Currently the company may seem as small but it has the company a bit worried. In comparison of the two, Amazon keeps inventory but the Rakuten company does not instead it they deal with the small traders. This can be worrying since the company is building efforts on the small traders who are a large competition to the Amazon Company.

Books offs is another challenge to the existence of the company. Book offs are cheap used books that are sold or lend at a cheaper price than the new books. This is challenge since the cheapness enables people to buy them at a much lower price compared to the ones sold online.  

Resources over competitors

The company has an advantage over it competitors when it comes to product offering. The large variety of different resources is the reason the company is doing well, the company attained $1.4 billion in sales in the year 2007. These sales were high because the sales were not just from book sales but also from related products. Amazon also sells music, DVDs and computer software’s. This gives it advantage over its competitors who dwell in selling books only.

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Free shipment for its clients over a certain period has also enabled the company to grow and be able to beat its competitors. This service was not being offered by the retail sellers enabling it to do better than the competition.

The company also has an Amazon market place where the people can buy and sell used products. This enabled Amazon to sell products and allow interaction of its customers unlike its competitors who only sold books.

Compliments to its partners

The company also incorporated with over 70,000 convenient stores to enable its customers to pay for the purchase of items bought online in the event they were afraid of internet fraud. This way people were comfortable in purchasing the products.


Opportunities the company should strive to peruse

The company offers a wide range of products, it is this reason the company has done well in relation to its competitors. The company should therefore venture into looking for more products that are on high demand and are likely to sell well and increase the value of the company. This type of products may include music, games, software’s and other computer related products that are currently the current trend. By doing this company has an upper hand to its competitors, this will enable the company increase the profit margins. By increasing the products it also helps realize potential products that can bring in high profits. This way the company can at the long run come up with products that are in a position to bring the company high profits.

The company should concentrate in reducing the shipment cost. The shipment cost is major tie breaker between the company and the competitors. By reducing the shipment cost the company can increase the number of users who fear that cost is somehow high. For a moment the company was offering free shipment but later started charging for this service. The company should look for a way to reduce or cut on this cost and maybe it will have an upper hand to its competition.

The company allows the option of’ looking inside’; the company should capitalize on this. This is because once the client has a sneak-peak of the books or the items they want to purchase the urge of obtaining the products are created. This agitates them to acquire the products. Seeing a view of the larger picture motivates them to acquire the product, own it and be able to go through it with no restrictions.

The company should pressure the government into implementing law when it comes to the sale of book offs. Book offs are a major competitor to the growth of the company. The books sold here a cheaper since they have been used. However this is termed illegal, the company should develop ways that it will pressure the government to restrict this trade. By doing this the company can dominate the market and be able to vast its growth to different parts of the country.

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Since discounting is illegal, the company should look for other alternatives rather than discounting that reduce prices of products. Like use of tariffs and seasonal sales. This encourages people to buy the same products at much lower prices than before. This way it will beat its competition and also meet the need of its clients.

The company should also look for modern marketing strategies that leap it ahead of its competitors, for instance the creation of an application that can be incorporated in a phone making it even easy to transact and get the required services. Doing this will enable the company to deal with the clients even easily and more closely.  



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