Amazon Case Study #2 (Case Study Sample)

Amazon Case Study
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Amazon has made a name for itself as a marketing revolution. Although it started out as an online bookstore, it now sells thousands of items and its website has over 6 million visitors. It now serves the whole world as opposed to United States of America alone. However, even with its massive growth over the last 20 years since it was established, the future is not certain (Fernie, Fernie, & Moore, 2015). It looks like Amazon has grown as much as it can, and now the options for growth are declining. To sustain its growth and relevance, the firm has continually reduced its prices for its goods as well as its shipping costs. The problem with this is that shareholders are not happy with this as they see this as a loss of revenue. Amazon can launch its next growth bout in many ways. For instance, because the firm now is a fully-fledged retail giant, it can consider having shops. This may look like a retrogressive step especially considering that the trend seems to be towards online retailing and from brick-and-mortar retailing. However, many factors would make this a good opportunity for Amazon.
To access those who may not be comfortable shopping online
Although online shopping has been there for long enough, there are people who still are not comfortable doing online shopping (Fabio, 2014). This is because of several factors. To begin with, some people do not like the experience of online shopping and would rather be in a brick-and-mortar shop where they can sample the goods. This is especially so with regard to some items such as fashion and apparel. Buying fashion and apparel items is a touch-and-feel affair and many customers for these products are less willing to buy online (Stobart & Blondé, 2014). By not having an online shop, Amazon is missing a large market segment that it can easily tap by just having and brick and mortar shop. Amazon has already made a name for itself in retail sector and this can be useful in making sure that if it starts a brick-and-mortar shops, it will be successful.
To complement and supplement the online store
As the online retailing has continued to grow, it has become very evident that the best model is where a brick-and-mortar shop complements the online store. Unlike during the earlier days of online retailing where experts were speculating that online retailing would edge out the traditional brick-and-mortar, it is now clear that brick-and-mortar stores for retailing are not only going to remain relevant for a very long time, but that they supplement the online stores.
To compete with other retailers using both the online and brick-and-mortar stores
By having only an online retail store, Amazon is having the same strategic disadvantage that brick and mortar who do not have online retailing have. As online retailing has continued to change the world of retailing, retailers who fail to implement an online store fail to gain strategic advantage as those that do have an online store. Just in the same way that brick and mortar stores lose strategic advantage by not having an online store, Amazon is having the same strategic disadvantage as it is not able to reach to a very important market. Having only an online retail platform would only be sensible for the kind of business model that Amazon had in its maiden years, which included just books. As a fully-fledged retailer of all sorts of goods, the firm will benefit a lot by having a brick-and-mortar shop. This will help it to compete well with other brick-and-mortar retailers such as Wal-Mart. Wal-Mart has managed to take its retailing online while at the same time remaining intact with its brick-and-mortar strategy. If Amazon was to be able to compete well with such established retailers as Wal-Mart, it has to have a brick and mortar platform.
To deal with shipping charges
Running an online retail platform comes with many advantages such as cutting on costs associated with hiring too many staff to staff the brick and mortar shops, the cost of holding stock and the cost of renting premises for brick and mortar shops (Hauser & Weldon, 2014). This is what online retailers such as Amazon has as an advantage against the brick and mortar retailers. However, it is good to note that the traditional brick-and-mortar retailers have also invaded the online retail platform thus benefiting from the advantages of the online retail platform while at the same time maintaining the advantages that come from having a traditional brick-and-mortar platform (Krafft & Mantrala, 2009). Meanwhile, Amazon, with its online-only platform, fails to harness the advantages of having a brick-and-mortar shop. Although using an online-only model helps the firm to save on the costs associated with having a brick and mortar platform, it also brings some complication with regard to shipping costs. Having to pay the bill for shipping cost may be cheaper for Amazon, but it definitely is a complicated affair that can lead to losses. In fact, one of the issues that Amazon is facing currently is with regard to shipping cost and having a better model of the way shipping costs should be shar...