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Amazon Evaluation

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Amazon Evolution
Corina Benavides
University of Phoenix
10/17/10
Dr. Veronica Sims

In my reading of Amazon: “From Book Seller to Service Provider “Amazon has been able to diversify their business in such a way that will lead to an increase in both book sales and services offerings.
I think Amazon is not moving away from its core competency of being a leading online retailer. I think because Amazon’s profits were falling and the business was suffering from inconsistent profit growth, Amazon had to strategies a way to sustain its business market positioning, and profit growth. The way Amazon strategized their positioning was by analyzing their current use of business offerings to the public. When analyzing what Amazon was using in terms of their business offerings, services, and processing capacity, inside company sources a.k.a. company executives evaluated the companies needs and assets. One major asset was Amazon’s two billion dollar infrastructure that was not used to its full capacity. According to the article Amazon: “From Book Seller to Service Provider” only 10% of Amazon’s processing capacity was being used at one time and that information begs the question, what is Amazon doing with the other 90%? With this information Amazon executives came up with a business strategy. Amazon developed three online business services that would use their existing processing system. The three services are S3, EC2, and The Mechanical Turk. The S3 offers costumers the storing of data on Amazons disk drives for a fee. The EC2 offers costumers processing power for a fee. The Mechanical Turk offers customers a combination of processing power along with content and imaging scanning by paid people. Amazon receives a commission of 10% for offering The Mechanic Turk service to companies. These three business offerings were built to stabilize the companies profit loss,…...

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