Question

Amazon has grown from a small online book seller to a retailer and service provider that has changed both physical and online retailing. The opening case of Chapter 6 (“Amazon’s Successful Growth Through Its Corporate Diversification Strategy”) describes a series of actions the company has taken as it has grown through diversification. Please feel free to supplement this short case with further research. In answering the questions below, support your reasoning with the concepts and terminology from Chapter 6.

1. What logic supports Amazon’s decision to create its own shipping services (e.g., air and truck transport)?

2. What logic supports Amazon’s decision to purchase Whole Foods?

Answer 1

Answer 1. Amazon's decision of creating it's own shipping services is one of the list helpful and logical decision. Starting it's own shipping services helps Amazon to lower it's cost of production. It also enable it to become independent and not depend on any third party to deliver ifa goods to the customer. By starting it's own shipping services, Amazon is able to provide fast delivery to customers, this way it is able to make long term relationship with the customers.

Answer 2. Amazon's decision to purchase whole food depicts that it's wants to expand its business operations and attract more and more customers. Buying whole food is a smart move. Through this, Amazon is able to attract customers of whole food also and increase its customer base.