The business environment showcases utmost competitive pressures than ever. Competition pressures are inevitable hence companies have been left with no option but strive to embrace distinctive strategies to ensure attainment of a sustainable competitive advantage over the competitors. Over the last three years, Amazon has initiated numerous growth strategies to matching the competitive pressures of the global market. In 2015, Amazon embraced corporate partnerships as a growth strategy to expanding its market share and sales. For example, on venturing into the Chinese market, the Amazon.com partnered with Alibaba.com the Chinese market dominator to broaden its market coverage (SEC, 2016). Also through its partnership with the TaskRabbit Company Amazon.com was able to venture into the cleaning industry, a strategy that has seen an increment in the revenue with Amazon becoming a one stop shopping point (SEC, 2016).
Amazon.com has taken advantage of the technological advancement to develop its growth strategy whereby the company uses the video streaming to give its customer a long lasting experience with its wide range of products. Through the subscription on the video advertisements, the company has been able to offer discounts and avail the products close to the customer at an affordable price. The increased technology adoption can be seen from the growing cost of technology resources from $9275 in 2015to $12540 in 2015 (SEC, 2016). Amazon.com has, thereby, cut the shipping costs and shipping time through its growth strategy to increase the use of the company platform on online shopping. By this strategy the company has been able to infiltrate peoples daily lives into becoming wholly dependent on the platform hence has positively affected the profitability of Amazon.com.
For the last five years, Amazon.com has acquired and invested in numerous companies as part of its growth strategy. Starting in 2011, Amazon reported an increase in its total acquisition amount from its 2010 record of $228 million to $771million in 2011 (SEC, 2016). Among the major acquisitions include the European Movie subscription service called the Love Film and The Book Depository, a UK indie Bookseller. As per the 10-K reports published by the Amazon.com at the end of 2011, these costs were expensed just as incurred hence did not pose a significant effect on the company's financial operations (SEC, 2016).
Acquiring goodwill of $103 million and intangible assets of $83 million, Amazon.com saw an immense impact from its acquisition of numerous companies in 2013. In 2015, Amazon.com acquired several companies at a cost of $690 million that saw the company gain a goodwill of $482 Million that are said not to have posed a significant financial implication on the financial operations (SEC, 2016). The principle aim of these acquisitions was to increase the companys productivity, technological advancement, expand customer base sales, an action focused on improving the profitability of the enterprise. Their impacts can be seen from the increased sales from $7.08 million in 2014 to $79.2million in 2015 (SEC, 2016).
The companys acquisitions fail to pose an immense impact on the profits of the company, but neither does it affect the company negatively. Much of the implications are asset based with the company having more assets acquired over the last five years as showcased by rising from $54million in 2014 to $65million in 2015 (SEC, 2016). Alongside the increased assets, the company has gained massive good will attached to the assets acquired. From Amazons 10-K reports, the goodwill increased from $3.3million in 2015 to $3.7million in 2015. The investments thereby stand to be beneficial to the company with the greater resources seeing the company have an increased customer base and increased customer loyalty a strategy that guarantees long-term sustainability for the enterprise.
Just like any other company, the growth of the European market pose a significant effect on Amazon's profits. Having acquired large enterprises with significant influence in the market, the company stands to benefit greatly from the growth of the European market (Dowson, Larke, & Mukoyama, 2012). A market is created for Amazon, and increased sales are the aftermath, and the company shall have increased sales from the international market which stands at 47% of its total sales. The growth of the European market shall thereby come out as beneficial to Amazon.com.
Dowson, J., Larke, R., & Mukoyama, M. (2012). Strategic Issues in International Marketing. London: Routledge.
SEC. (2016). Amaxon.com Inc. Washington DC: United States. Retrieved from https://www.sec.gov/Archives/edgar/data/1018724/000101872416000172/amzn-20151231x10k.htm
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