Question

1. Which theory of trade does your Amazon utilize (mercantilism, absolute advantage, comparative advantage, product life cycle, strategic trade, and national competitive advantage)?

2. How does this theory of trade benefit Amazon personally? How did it benefit business globally?

3. Does Amazon import or export physical goods or services? If so, describe how.

Answer 1

1)Comparative advantage does not imply a better product or service, though. It only shows the firm can offer a product or service of the same value at a lower price.

Amazon(AMZN) is an example of a company focused on building and maintaining a comparative advantage. The ecommerce platform has a level of scale and efficiency that is difficult for retail competitors to replicate, allowing it to rise to prominence largely through price competition

2)

The first and foremost factor for a sustainable competitive advantage is to position your brand in a consumer’s mind. The ways to enter the mind is by:

a) Becoming a leader in an existing product/service category

b) Becoming the first entrant in any new product/service category. In other words, you need to create a new category that differentiates you from the rest of the market.

Amazon has been performing hundreds of activities to ensure its unique value propositions to customers. The company customizes these activities to meet its low price guarantee and a greater value of convenience to the customers. Over a period of time, those activities became unique to Amazon and laid the foundation for sustainable competitive advantage. Which benifits it personally

Also , The program offers an opportunity to expand business to international markets. With global selling, providing access to hundreds of millions of amazon’s international customers in and million's of products at different prices with different brand values .hence it benifits business globally

3)

Exporter of record (EOR):

Generally, the shipper is the exporter of record. Amazon will not act as the exporter of record. You may be able to contract with your customs broker or freight forwarder to act as the EOR.

Importer of record (IOR):

The importer of record is responsible for ensuring that the shipment is successfully imported into the destination country. Responsibilities include filing legally required documents and paying assessed import duties and taxes. It is important to note that Amazon, including the fulfillment centers, will not serve as the importer of record for any shipment of FBA inventory. Any FBA inventory shipment attempting to make entry with Amazon as the IOR will be refused and returned at the shipper's expense—no exceptions.