Question

Amazon is an example of a very successful online retailer. Their business model has expanded from simply selling books online to being the online retailer for everything on the Internet.  

1. What is the main business model for Amazon?
2. Explain each of the eight elements of their business model. . Please dont upload that's already on internet . To best answers I always give upvote.

Answer 1

1)The main business model followed by Amazon is the platform business model as a core as core model with several other units operating within it. A platform business model is a base usually created to facilitate exchange between two or more groups which are independent. Like sellers and buyers. Amazon consumer model is based on three customer value proposition: Low prices, Fast delivery speed , Vast selection. There are other models running in this core model like revenue model, low cost, etc.

2)The business model describes the thought process as to how an organization captures, creates, and delivers value.

The main component of a business model:

a)Value Proposition: This implies how an organization will fulfill the needs and requirements of the customer. Like Amazons characteristics of quick delivery which is usually one day now is its value proportion.

b)Revenue models the name implies it is associated with earning of money. How to increase revenue. Amazon follows the Sales Revenue Model which implies when the volume of sales increases so the revenue.

c) Market Opportunity: It includes an organization's intended market space along with the overall opportunities available to a firm in the market.

d)Competitive Advantage-If we talk about Amazon's competitive advantage then is a low-cost product. Amazons sold the product at a very low price which certainly has become a barrier for a new entrant. With its huge seller base and efficient logistics Amazon has created a huge loyal customer base.

e) Market Strategy: Amazon is always on its toes to come up with new things like it started prime membership, then Prime hence it is always moving as per the need of the time.

f)Organizational Development: Amazon has built its capacity to change and achieve greater effectiveness by developing, improving, and reinforcing strategies, structures, and processes.

g)Management Team: It not only manages its seller but also the employees as the core strength of Amazon. They are the ones who make everything possible at Amazon and direct it towards its mission. Employees of the organization are responsible for making the model work.