Case Study- Management Theory and Practice

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Case Studies Case Study 1: Innovative Business Idea: Amazon.com

"Ultimately, we're an information broker. On the left side we have lots of products, on the right side we have lots of customers. We're in the middle making the connections. The consequence is that we have two sets of customers: consumers looking for books and publishers looking for consumers. Readers find books or books find readers." - Jeff Bezos, founder of Amazon.com

Amazon.com, Inc., the world’s largest online retailer, is a multinational e-commerce enterprise. Headquartered in Seattle, Washington, it was started by Jeff Bezos in 1994. The name Amazon was adopted from the biggest river on earth. Amazon.com was initially started as an online book store. However, the enterprise eventually diversified into different other products, such as DVDs, CDs, MP3, computer software, video games, electronics, apparels, furniture, food, and toys. Within a span of 16 years, the enterprise has achieved overwhelming success. In 2010, Amazon earned USD 34.204 billion as revenue. In the beginning, Amazon did not have its own delivery network. Therefore, the products were delivered to customers, after receiving orders, to the post office by Jeff Bezos by his family car. In the year 1995, Amazon opened its first virtual store with more than 1.1 million titles. In 1997, Amazon went public on NASDAQ by raising more than USD 50 million. By December 1998, the enterprise reached a market value of USD 5.5 billion.

Amazon.com is formed after a combination of most innovative entrepreneurial ideas of the last century. Jeff Bezos, the founder of the enterprise, did not have any prior experience in the book business. However, he realized the huge business potentiality of selling books online. Jeff Bezos had a notion that an online book store can accommodate a large number of titles as compared to any other physical store. Apart from this, an online bookstore enables customers to order any book of his preference.


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