Jeff Bezos the founder of Amazon.com the largest online retailer in America developed the Kindle in 2007 to continue the diversification in business. The company dealing with electronic commerce started business as an online book store but has since diversified to include other businesses. It soon started selling electronics, computer software, MP3 downloads, DVDs, CDs, video games, furniture, toys and apparel. The company’s core values and objectives were geared towards making it the largest in online business. This could be achieved through the diversification and sale of new products in the market thus having a competitive advantage over other rivals. The company determined to always maintain considerable market share in online business, through Bezos launched the Amazon kindle. This decision and idea by Bezos really proved to be decisive and systematic in diversification meant to ensure the company ventured busy markets. The idea was systematic and in conformity with the company’s mission as evidenced by the company’s time and time again efforts to outcompete rival companies especially Apple which is indeed a giant tech industry. At first, the company launched a downloading service the Amazon MP3 music, then bought Audio.com a top shelf audio book vendor and continued diversification to many other products. The decision to launch the third generation Amazon kindle indeed proved critical in diversifying business. Bezos was determined to develop products that could bring natural evolution to the world of technology. This consequently led to the decision that was very systematic and intuitive of launching the Amazon kindle. The Amazon kindle is really revamping the online industry although the company still manages to get considerable sales from Apple iPods. In a recent report the sales from Amazon’s hard cover books were outnumbered by the sales accrued from the sale of books for the kindle. The kindle which is an e-book reader can download content and store e-books, Microsoft word documents, RSS feeds and digital pictures over the whispernet. The developed of the Amazon kindle has really brought changes in the publishing industry whereby the long-form reading can be digitized. Bezos’ decision was critical in enabling books to become analog through technology as were music and video. Further, after launching of Amazon kindle an initial thinking of Bezos, the company was able to command a considerable market share in the e-book market (Schermerhorn, 14).
The e-book market has seen entries by other companies such as the Barnes & Noble with the Nook and Apple Company with the iPad which id indeed popular. By venturing into the market that is hugely owned by Amazon kindle, a competitive risk is apparent. Although Amazon kindle commands a big market share the entry of other firms definitely brings forth the aspect of competition. Earlier, the e-book environment was characterized by monopolistic control but now changes have occurred turning the industry into being competitive. It is evident that these new companies will actually provide the competition risk to Amazon Company with regard to business in the e-book market. The new players in the market have indeed come up with products that will really provide perfect competition in the industry. For instance, the e-reader application (stanza) unleashed in the iPhone Apple store by the Apple company is very competitive. Through this e-reader application, the benefits of both open and closed architectures are being balanced by the Apple Company. It is evident that this form of e-reader application really provided competition to the kindle e-reader. In order to compete with the Apple’s iPad, Amazon had to upgrade its kindle e-reader and by May 2009, the “kindle for iPhone and iTouch” a free application was introduced (Schermerhorn, 14).
The venturing of other players in the e-market actually brings a competitive risk absent in earlier business to the Amazon Company. The presence of Apple’s iPhad has really provided a strong rivalry in the market of e-readers. This consequently calls for strategic measures especially in decision making to make sure that Amazon continues to command considerable market share. The strategic threat from Apple is really ideal and mistakes by Amazon with regard to decision making can bring far reaching implications and negative outcomes. For the company to wade off the strong competition challenges brought forth by Apple there is no room for mistakes in decision choices. The CEO should come up with decisions that will ensure continuity in control of e-reader market. Such decisions should involve how to come up with other e-reader applications that are unique and possessing additional features. The new e-reader applications for the Amazon should clearly depict differences when compared to Apple’s iPhad. The management should not assume that because they had huge e-reader market share and experience before other competitions ventured the business, the situation will still remain so. Such mistakes can cost the company heavily because the competition risk provided by the rivals is great. In addition, Amazon should not wait for other competitors to introduce new products so that it can copy by upgrading theirs as was the case when Apple introduced iPhad (Schermerhorn, 14).
The company has been launching new initiatives as it continues with business such as lowering product prices considered as more patient approach. This is seen as a measure to make the company even stronger and healthier and better positioned in serving the customers. Further, the company has made significant investments in new services as well as media in an attempt to achieve experience and global growth in commerce world. This diversification enables the company to have advantages with regard to competition. The acquisition of Zappos a strong rival company was a good strategic decision towards maintaining the command of market share. However, the involved in such significant ventures can be a potential source of competition risk (Schermerhorn, 15).