Amazon Case

Traditionally, books were bought only at physical stores. Brick and mortar stores typically stock only popular and best selling books due to geographical limitations. Amazon.com stocks a wide range of books incorporating all categories, which are not available in brick and mortar book stores as Amazon is not bound by physical limitations. Customer's can now order any kind of a book from a wide range of categorized selection from any part of the world with a click of mouse using their computers. Hence, it can be concluded that Amazon has completely revolutionized and changed the market for books.

The three technological invariants, "digital representation", "computing power" and "modularity" play a vital role in Amazon's business model and can be described as follows. Amazon is one of the largest online sellers of digital media like downloadable music, e-books and movies etc. Commercial digitization and sale of songs, movies and books on Amazon.com was a result of increase in computing power, which made sufficient bandwidth available for online transfer of above digital media and enabled customers to own sufficiently powerful general purpose computers that could run software which is capable of decoding and utilising the digital media.

Amazon over the years has increased its technological capability and computing power, which has helped Amazon to be a top online retailer and provided the organisation with competitive advantage. Amazon uses the acquired technological capability for endeavouring new business ventures like providing external retailers a cyber space to sell their products on Amazon.com for a fee and fulfilment to customer on commission basis. Amazon also offers a number of pay as you go services including computer power and data storage to other companies, which is also known as "cloud computing". The above business ventures help Amazon to increase its profitability, as the existing technological infrastructure is enough to make the above services available and it doesn't have to invest extra revenue.

Following are the risks faced by Amazon as it offers more products and services:

* Product saturation due to several similar products in one category which might result in customer getting confused and switching to competitor

* Amazon search engine might get incapable of accessing the growing database

* Increased cost of doing business as Amazon will need to update its data centres

* Inadequate supply chain management due to increased number of products