Strategic Management Essay Example | Topics and Well Written Essays - 2000 words - 8

Strategic Management - Essay Example Another advantage was that one of the largest book wholesalers was located in nearby Rosenberg, Oregon. Amazon.com began with an initial collection of 200,000 titles, which no other online bookstore could claim to have at that time. The company’s shares were offered at an IPO price of $18.00 on NASDAQ (Symbol AMZN), after going public in May, 1977. Amazon grew steadily but slowly in the late 1990s, and comparisons with the faster growth of similar dotcom companies of the period created initial resentment among investors. Amazon was implementing a unique strategy of not expecting profits for five years, which paid off when the dotcom bubble burst and Amazon came out as one of the few survivors. The company recorded profits for the first time in the last quarter of 2002, a meager but symbolically crucial $5 million or 1 cent per share. Amazon diversified its product lines and expanded overseas, making profits of $35 million in 2003, $558 million in 2004 and $359 million in 2005. Shareholders received reasonable returns on investment, and following the merger with SBC Communications, the company’s shares entered the S&P 500 index in the place of AT&T on 21st November, 2005. â€Å"In the most basic sense, a business model is the method of doing business by which a company can sustain itself -- that is, generate revenue. The business model spells-out how a company makes money by specifying where it is positioned in the value chain.† (digitalenterprise.org). Amazon.com began its business at a time when the internet has just started to entrench its roots into the economy by capitalizing on the enormous opportunity it provided to remove the twin obstacles of time and distance. Amazon’s business model is based on pampering the customer to the status of a king by tracking their tastes and using this information to create a unique customer experience. Thus they have succeeded in cultivating a relationship