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Amazon.com Technology strategy

             In the Competitive Forces Model, Porter feels that the most strategic plan a company can take part in is to cooperate with other firms in the similar industries in order to lower costs and create a better product. The Competitive Forces model is used to "describe the interaction of external influences, specifically threats and opportunities, that affect and organization's strategy and ability to compete" (Laudon 96). Amazon faces many threats such as competing book and music sellers. Amazon's main threat is the risk of competing book and music sellers. .
             1) New Market Entrants - New online service providers are being added daily to the internet trying to market a "better product" to consumers. Because Amazon has name recognition they are able to attract more customers therefore have more of a change to directly connect consumer to publisher.
             2) Suppliers- Amazon can be the mediator between suppliers and customers. With a highly sophisticated information technology program Amazon is able to use lower prices to attract customers. .
             3) Substitute products- Individuals want two different things when looking for reading material. 1) They want it fast and inexpensive 2) they want to sit down, relax, and browse for other materials. Amazon can deliver a fast inexpensive product, but retailers like Barnes and Nobles and Borders offer the threat of atmosphere. Amazon will have to make up for lack of comfort by an increased efficiency.
             4) Customers- Recently the market has seen a current trend toward internet shopping. There is a threat that a technology backlash could occur leaving suppliers very upset about the amount of information and money that was contributed towards a joint operation with Amazon.com.
             According to Porter, the Value Chain Model highlights specific activities in the business where competitive strategies can be best applied and where information systems are most likely to have a strategic impact.


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3. Business Overview - Amazon

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6. Amazon.com

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