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Third, the company's management faced challenges in changing the internal culture of Amazon.com away from market share gains to profitability gains, and this would require intensive changes in the structure, processes, roles and responsibilities, and systems of the company.
Opportunities
There are many opportunities for Amazon.com however to continue growing during this phase of their history. First, the commercializing of their technologies through Amazon Web Services, One Click Ordering and other technological innovations have proven to be effective in generating a higher level of customer loyalty than had been possible when the online store was undifferentiated from competitors (Gupta, Lehmann, Stuart, 2004). Second the consistency and predictability of their execution due to systems integration and fulfillment processes working is generating a higher degree of trust in the company. Third, partnerships are providing incremental revenue and illustrate an emerging strength of the company for being able to scale globally. Fourth, there is the overall increase in online retail spending that is occurring as consumers begin to increasingly look to the Web as a means of convenience and time savings.
Threats
The amount of change required internally at...
These are threats as the competition will eventually force Amazon.com to move up-market to retain more margins in order to attain profitability faster. There is also the threat of competition for Barnes & Noble and other book resellers online; in addition to Ingram Book Distribution themselves who during this time period discussed creating online stores for its brick-and-mortal bookstore customers as well. There are also the uncertainties of the operating costs and the fluctuation in energy pricing, which is going to directly affect the costs of fulfillment as Amazon.com contracts with UPS, Fed Ex and other freight forwarders as well. Lastly the threat of not ensuring a high degree of scalability with integration points with suppliers during a holiday season could potentially harm their credibility and lead to lost customers as well (Gupta, Lehmann, Stuart, 2004).
References
Sunil Gupta, Donald R. Lehmann, Jennifer Ames Stuart. (2004). Valuing Customers. JMR, Journal of Marketing Research, 41(1), 7-18. Retrieved December 1, 2008, from ABI/INFORM Global database. (Document ID: 536757571).
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