Amazon.com

Definition

Amazon.com is a multinational technology company primarily known for its e-commerce platform, which offers a vast array of products and services. It has transformed the retail landscape by enabling online shopping and has expanded into various sectors, including cloud computing, digital streaming, and artificial intelligence.

5 Must Know Facts For Your Next Test

1. Amazon.com was founded by Jeff Bezos in 1994, initially starting as an online bookstore before expanding its product offerings to millions of items.
2. The company pioneered the use of customer reviews and personalized recommendations, significantly influencing consumer behavior in e-commerce.
3. Amazon Web Services (AWS), launched in 2006, has become a leading player in the cloud computing industry, contributing substantially to the company's revenue and profitability.
4. Amazon's subscription service, Amazon Prime, offers members benefits like free shipping, streaming services, and exclusive deals, enhancing customer loyalty and retention.
5. The company's market capitalization frequently ranks it among the top companies globally, reflecting its significant impact on both retail and technology sectors.

Review Questions

• How has amazon.com changed consumer behavior in the retail sector?
  • Amazon.com has fundamentally altered consumer behavior by making online shopping convenient and accessible. Its user-friendly interface allows for easy product searches and comparisons. Features such as customer reviews and personalized recommendations have influenced how consumers make purchasing decisions, shifting preferences from traditional brick-and-mortar stores to online platforms.
• Evaluate the role of Amazon Web Services (AWS) in amazon.com's overall business strategy.
  • AWS plays a crucial role in Amazon's business strategy by diversifying its revenue streams beyond e-commerce. As one of the leading cloud computing platforms, AWS contributes significantly to Amazon's profitability and positions the company as a key player in the tech industry. The success of AWS allows Amazon to invest further in its core retail business while enhancing its competitive edge through advanced technology solutions.
• Assess the implications of amazon.com's pricing strategies on market competition and consumer choice.
  • Amazon.com's pricing strategies have significant implications for market competition and consumer choice. By employing dynamic pricing and offering frequent discounts, Amazon pressures competitors to lower their prices or enhance their services. This competitive environment fosters greater consumer choice as customers can compare prices easily across different platforms. However, this strategy also raises concerns about market monopolization and the long-term sustainability of smaller retailers who struggle to compete with Amazon's scale and resources.

Related terms

E-commerce: The buying and selling of goods and services over the internet, which forms the core of Amazon's business model.

Market Capitalization: The total market value of a company's outstanding shares, often used as a metric to evaluate a company's size and growth potential.

Price-to-Earnings Ratio (P/E): A valuation ratio calculated by dividing a company's current share price by its earnings per share (EPS), providing insights into how much investors are willing to pay for a dollar of earnings.