An example of an E-Commerce success and its causes

E-commerce success can be seen in Amazon.com, Inc, one of the first major companies to sell goods through the internet. Amazon.com is an online book retailer, which later also involve in selling other products, such as DVDs, electronics, toys, games, home improvement items, software and video games. The success of Amazon.com is due to three strategies that have been used, including cost-leadership, customer differentiation and focus strategies (Saunders, 2001, pp.122-123).

Amazon.com used the cost-leadership strategy by differentiating itself primarily on the basis of price. It offers a considerably lower price with the same quality products when compared to other companies. Their second strategy is customer differentiation. Amazon.com provides current and prospective customers with differentiation of design, quality and convenience.Amazon.com always selects a differentiator that is different among the competitor and this enable their consumers to recognize and differentiate its product from other competitors. The third strategy, focus strategy, takes one of the two earlier strategies and applies it to a small area of trade within a market. Amazon.com focuses on outstanding customer service as a portion but not the whole market as each portion of the market has its own demand and requirement.

With these three strategies, Amazon.com is able to stand as one of the pioneer in e-commerce.