Amazon`s Big Data Strategy
| Case Code: ITSY077 Case Length: 15 Pages Period: 2003 - 2013 Pub Date: 2014 Teaching Note: Not Available |
Price: Rs.400 Organization: Amazon Industry: E-commerce Countries: US Themes: Big Data, Analytics, Market Research |
Abstract Case Intro 1 Case Intro 2 Excerpts
Background Note
Amazon was founded in the year 1994 by Jeffrey Preston Bezos (Bezos). It started its operations at a time when the reach of the Internet was increasing and the Internet was being considered as a potential business medium. Understanding the trend, Bezos came up with the idea of selling books through the Internet. He felt that books were the best products to sell online as millions of titles were in print and an e-commerce site could house and sell many more books than the conventional brick-and mortar bookstores. Bezos calculated that the common brick-and-mortar stores could not house more than 200,000 books at a time and aimed to build a large online bookstore which would be bigger than any physical bookstore in the world.
Amazon was initially funded with the money that Bezos borrowed from friends and relatives. Bezos and his wife, along with some employees, built the website and tested it for over a year before launching it (Refer to Exhibit I for Timeline of Amazon). Amazon was finally opened to customers in the year 1995. Like many other technology giants, it was initially run from a garage – the one in Bezos’ Washington home. At the time when Amazon started its operations, the book retailing market was highly fragmented and there was no major player except Barnes & Noble, Inc. Barnes & Noble had one-tenth of the total market share but no online presence.
Amazon thus got the first mover advantage and faced very little competition in its initial days of operation. Right from when it began its business operation, Bezos focused on customers and believed that customer loyalty was the key to penetrating the market and increasing sales. Amazon started to ship goods to all the 50 states in the US and 45 other countries within a month of its launch – and all this while still working from Bezos’ garage. Amazon’s popularity grew through word-of-mouth as customers recommended it to others. Within four months of its launch, Amazon was selling more than 100 books a day.
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