Product diversification and services Core business of the company

The development of product diversification was implemented gradually and evenly. The company correctly defined the opportunity to increase the profit by expanding its assortment, primary by sales of electronics and computers. This segment is the largest one on quantitative measures and it provides the most significant share of income of Amazon. The company did not dwell on books trading and thanks to this fact it had developed from narrow-purpose on-line book shop to giant supermarket where everyone can find what he or she wants.

There are several reasons why Amazon was able to outperform its competitors and become the leader in the industry. Firstly, it is the long-run orientation of management. The one very nonstandard step of Amazon was the concession of the right for other retailers to operate on their trading area. Jeffrey Bezos, the founder of the company, considers Amazon.com as a market place where besides Amazon other players can conduct their activities. They get an opportunity to independently conduct their pricing policy and govern their special conditions of selling and delivery. Therefore, more than one seller can be responsible for trading the same product.

Of course, using this approach company can lose share of profit in current moment of time but it gives company the opportunity to attract more consumers, attain their disposition and keep them buying additional goods together with sought-for. Moreover, we want to emphasize regular clearance sales with significant price concession (Today’s Deals) conducted by Amazon, which also let the company support customer loyalty.

During the dot-com boom, no one e-retailer really considered the logistics, that time it seemed more important to attract customers and not to provide services of a high quality, Amazon was seriously engaged in the problem of logistics. For now, Amazon is a worldwide retail platform, and they do not care anymore what exactly to sell, largely due to the flexible, scalable, and highly automated logistics integrated with the storage, transport and demand management functions, which were possible to be implemented by the introduction of the latest technological innovations and cooperation with the possibilities of the company’s websites.

Secondly, Amazon is always improving. The company just crazy about customer’s needs. Amazon.com was the first to introduce such an option as the customer product reviews, which has become legendary for all online stores. Even the negative reviews are posted there. It is known that the producers initially resisted the introduction of this function as they thought that the introduction of such an option may have a negative impact on sales due to a large number of negative reviews. However, subsequent experience has shown that the reviews only increases sales. After that multi-criteria ratings were introduced.

But even at this point the store is not stopped. A little bit later individual recommendations based on previously purchased items and pages viewed were applied, and the "Wish List" that could be made by the user himself.

For promotion of complementary products the option "Frequently Bought Together" was recently introduced. This novelty exploded across the internet once again and was copied by all major e-commerce websites. In the end, fighting for the consumer time, so called "one-click purchase" was implemented. It did not require the buyer to fill multiple order forms.

Most recently, surpassing Google in the field of services, providing automatically text recognition and books digitizing, Amazon introduced a search within the book that simplifies the procedure of selecting the desired book (for example, a buyer who is interested a particular phenomenon, not always can find an appropriate book only by title, but using an inline search he is able to obtain the information even about the content of a specific chapter.)

Year by year, the company opened and bought web-sites, which partially overlaps functions of the Amazon.com, and now the company owns the following sites which sell products via the Internet: