The porter’s 5 Forces Model is a simpy but powerfull tool for understanding where power lies in a

business situation. It helps understanding both the strenghth of the curent competitive position and
factors affecting the strategy development. Jeffrey Bezos started Amazon.com in 1994. Amazon.com
is greatly concerned with customer desires. One of it’s objectives is the personalization of client’s
wishes. Amazon.com is aimed to provide the best buying experience on the internet. Here is the 5
forces model for amazon.

BUYER POWER
1.

Consumers that buy goods in

amazon.com tend to become The low average of clients switching from
regular clients due to the low amazon.com products and services to
prices that amazon.com can those of the competience is satisfactory.
Low prices is the principle
offer, which is hard to reach by
attraction that amazon.com offers
the competence.
to each individual buyer

Amazon.com has marked advanteges with most

of their providers (books,audio,technology) for
the reason that these companies do not charge
their product until the moment that
amazon.com sell them
 2.

Amazon.com pays suppliers for those products

SUPPLIER POWER
only 35 days after the item has been sold.
Nevertheless companies are pepared and
ready to provide services and product to
amazon.com

Amazon.com has switced it’s primary operational

sysyte, from windows-based to linux-based, this
movement is estimed to save more than 15 millions
of dollars to the company.

Amazon.com is one of
3. the first companies into
e-commerce field

This gives to amazon.com

COMPETITIVE RIVALRY a certain level of
tranquility into the market

Amazon.com has inovated

along the years reaching
highest level of customers
satisfaction which can assure
their position into the market
for future years
4.
THREAT OF SUBSTITUTION

Therefore, amazon.com does not present

The name of amazon.com is well
threats of substitution at least in the
recognized and trusted into the field
short time

5.

THREAT OF NEW ENTRY

Internet has shown that a simple idea well This can be the proof
developed can offer an extraordinary that a threat of new
results, such as facebook, youtube and entries into the market is
twitter. These companies have developed possible
their website in a short period of time
with incridible final results.
Amazon EB strategy :

Achieving customer loyalty and repeat purchases has been key to Amazon’s success. Many dot-coms
failed because they succeeded in achieving awareness, but not loyalty. Amazon achieved both. In
their SEC filing they stress how they seek to achieve this. They say: "We work to earn repeat
purchases by providing easy-to-use functionality, fast and reliable fulfillment, timely customer service,
feature-rich content, and a trusted transaction environment.

Key features of our websites include editorial and customer reviews; manufacturer product
information; Web pages tailored to individual preferences, such as recommendations and
notifications;technology; secure payment systems; image uploads; searching on our websites as well
as the Internet; browsing; and the ability to view selected interior pages and citations, and search the
entire contents of many of the books we offer with our “Look Inside the Book” and “Search Inside the
Book” features. Our community of online customers also creates feature-rich content, including
product reviews, online recommendation lists, wish lists, buying guides, and wedding and baby
registries."

In practice, as is the practice for many online retailers, the lowest prices are for the most popular
products, with less popular products commanding higher prices and a greater margin for
Amazon.Free shipping offers are used to encourage increase in basket size since customers have to
spend over a certain amount to receive free shipping. The level at which free-shipping is set is critical
to profitability and Amazon has changed it as competition has changed and for promotional reasons.

Amazon communicate the fulfillment promise in several ways including presentation of latest
inventory availability information, delivery date estimates, and options for expedited delivery, as well
as delivery shipment notifications and update facilities.

This focus on customer has translated to excellence in service with the 2004 American Customer
Satisfaction Index giving Amazon.com a score of 88 which was at the time, the highest customer
satisfaction score ever recorded in any service industry, online or offline.
2. How can small companies survive against these giants?

Answer:

- Small company need to develop a great website. And it must be mobile enabled, because many of
your clients will see you for the first time on their smartphones. The good news is this….You can have
a great website for less than $500 by using WordPress and purchased templates. It’s almost as easy to
build a website as it is to program a DVR. If you can type and follow instructions, you can build a good
website. If you practice a bit, and get some amazing pictures and graphics to backup your content,
you can have an excellent website!

- small company need to populate that website with great content. If you don’t have the ability to
generate great content, find great content and ask permission of the author/creator to add it to your
website. Often, you’ll find that writers are happy to gain another outlet for their writing, and it
creates more “noise” for them online.

- owning and operating a small companies means that you can react more quickly to challenges that
arise. You don’t need to take decisions through multiple layers of management, or through bosses
who want to “correct” your ideas or concepts. If it’s a great idea, put it out into the ozone and see
what people think of it. You may be very, very surprised how supportive your readers and clients are
of the work that you do