Buyer Power
Buyer power in the book retail industry is very high. This fact can be directly associated with the significant amount of substitutes and intense rivalry in the industry. As mentioned earlier, if a consumer is looking to purchase a book he/she has many options. The amount of buyer power ultimately depends on the need or desire for the book (cited in University of Texas at Dallas.com n.d.).
Supplier Power
Supplier power in the book retail industry would be considered moderate. Book retailers can purchase books from over 1,700 publishers as well as wholesale distributors. Publishers have control over the distribution of titles (through copyright protection), the list price and the retailers' cost price. These limitations do afford the publishers some supplier power over the book retailers (cited in University of Texas at Dallas.com n.d.).
Amazon.com Competitors' Analysis
Two of Amazon's largest competitors are the Barnes & Noble and the Borders Group, Inc.
Borders Group, Inc. is the second largest operator of book and music superstores based on sales and number of stores. It offers customers over 650,000 titles and 10 million book, music and video items in stock and ready for immediate shipping from Border's distribution center (Durkin, MA, Kass, C, Modi, T & Ulin, M 2000).
Barnes & Noble is the largest bookstore chain in the world. . From its fledgling beginning of one store in 1971 Barnes & Noble acquired and ran several mall based bookstore chains including B. Dalton Bookseller, Doubleday Book Shops and Scribner's Bookstores. It carries a range of 60,000 to 175,000 titles. In 1997, Barnes & Noble once again expanded its operations to make books available to customers through the Internet (Durkin, MA, Kass, C, Modi, T & Ulin, M 2000).
Several aspects of these two largest competitors posed a threat to the company. Barnes & Noble launched its online store in 1997. If it succeed because of its unique operating channels such as the retail stores, the Internet, 1-800-THE BOOK and mail order, it would capture some of initial customers and develop some brand loyalty (Durkin, MA, Kass, C, Modi, T & Ulin, M 2000).
On one hand, Borders.com has offered books, music, CDs and videos. Such actions would be also a threat to Amazon.com because the company expanded its product line to include music. Thus, it is expected that the competition between Amazon.com and Borders.com will be increased sharply in the diversified products market (Durkin, MA, Kass, C, Modi, T & Ulin, M 2000).
Analysis of Amazon.com
Amazon.com identifies the key success factors in its business model such as a strong brand, providing customers with outstanding value and a superior shopping experience, massive sales volume and realizing economies of scale (Durkin, MA, Kass, C, Modi, T & Ulin, M 2000).
Amzon.com is the only bookseller in the world's top 500 websites, according to Media Metrix. Additionally, according to one analyst report, Amazon.com is estimated to have over 80 percent of the online bookstore market (cited in Durkin, MA, Kass, C, Modi, T & Ulin, M 2000).
However, Jeffrey P. Bezos' vision, founder of Amazon, has evolved much further than just being the earth's biggest bookstore. The vision is to be the world's biggest one place-shopping stop for online shoppers and to become a premier general online retailer by leveraging its existing brand and business model (cited in Durkin, MA, Kass, C, Modi, T & Ulin, M 2000).
Amazon.com has several core values which play a crucial part in the success of the company. The first one is excellent customer service based on extraordinary technology. The company provides various services such as book reviews from other customers and from staff. In addition, many featured books contained descriptions, snippets of reviews and interview posted by authors (Durkin, MA, Kass, C, Modi, T & Ulin, M 2000).
Convenience and price is the second core value of the company. It sells books through Internet and has its own distribution system. Similarly, Amazon does not have to spend too much money on real state and other operation because it is pursuing Internet-based business. Thus, it can reduce its inventory expenses (Durkin, MA, Kass, C, Modi, T & Ulin, M 2000).
On one hand, the company has several key resources and capabilities to meet the challenges presented by opportunities and threats. These resources and capabilities have thus far allowed the company to be the world leader in the special retail industry. Jeffrey P. Bezos, founder and chairman of Amazon since 1994, is the driving force behind the company. He is a valuable resource that gives the company the competitive advantage with above-average return (Haddad, N & Sheth, J 2001).
This online bookstore focus on University textbooks and college textbooks market. It does very well in students market. Prices are very good and all are Brand new textbooks there.