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Amazon.com


             4.1.4) Technology.
            
             • Most business to business has high technology especially in the area of networking systems.
            
             • Major firms use large database to track & predict customer purchases.
            
             • Advance in computer and internet technology increases the usage of computers.
             5.0) Industry Analysis (Hill & Jones, 1998).
             Rivalry-intense.
            
             • Industry life cycle, U.S-mature, Asian and Western Europe-growing.
            
             • Internet life cycle-growing.
            
             • Rivalry among competitors is high because of small dominant companies on the internet.
            
             • High rivalry among online companies such as B&N, Wal-Mart and Toys-R-Us.
            
             • Intense rivalry with B&N, who tried to purchase Amazon's main supplier.
            
             • Amazon emphasizes on product differentiation, which enable it to build brand name and image.
            
             • High exit barriers because of high capital required for technological advances.
             Threat of new entrants-low.
            
             • Online books sale is at the growing stage of the business life cycle.
            
             • Competitors cannot enter market because big firms have significant minority interest in market.
            
             • Through strategic alliances, firms would expand market share by making it difficult for new firms to enter.
            
             • Strong companies in the U.S make it unattractive to enter.
            
             • Threat of new entrants low due to heavy capital investment needed.
             Bargaining power of buyers-low.
            
             • Consumers surf the internet sites to compare products and prices, then opts to buy at local businesses.
            
             • High switching costs as Amazon focuses on product differentiation, i.e. quality, service and customer satisfaction.
            
             • Strategic location and product differentiation make customers loyal to Amazon.
            
             • Backward integration unlikely as high capital resources needed to enter industry.
             Bargaining power of suppliers-moderate.


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