Amazon.com,Inc. is an American electronic commerce company in Seattle, Washington.
Jeff Bezos founded Amazon.com, Inc. in 1994 and launched it online in 1995.
Amazon.com was the first company to move book retailing from the bricks and mortar industry on line. In addition, no company so far has done more to show how the Web overturns conventional assumptions about distribution than Amazon.com. The Economist (2000) noted that the name Amazon.com has become synonymous with e.commerce and it is one of the few Internet brands recognised world over. It added that the company is the most visited e.commerce Website in the
Advantages in e.commerce depends on three main factors: continuous innovation, speed of implementation and patenting.
Why Amazon.com so success?
Rapid and continuous innovation in the electronic commerce area has been Amazon’s heritage. For instance, in 1995 Amazon was the first company to truly harness the power of the rapidly expanding Internet to provide an online book retailing service to consumers. Amazon has also been the first company to enable consumers to search for, and order, hard-to-find books as easily as best sellers. Amazon followed up this innovation rapidly by offering its customers “one-click”. The “one-click” programme streamlines the buying process by storing detailed customer information, including credit card numbers. Furthermore, Amazon has been the first online company to use collaborative-filtering technology, which analyses a customer’s purchases and suggests other books that people with similar purchase histories have bought. Such valuable information has proven very effective in capturing new markets online and mass customisation. In addition, Amazon has been the first online company to introduce two innovative processes to facilitate customer purchases. Amazon has also been the first online company to provide customers with reminders and tracking of their orders through e-mail alerts. Consequently, Amazon’s innovative history suggests that the company could become a dominant provider of online shopping behaviour in the future. As such, Amazon has stayed ahead of the competition by rapid and continuous innovation.
From innovation advantage to patent advantage?
Innovations have to be patented in order to protect themselves from imitators. Trippe
(2000) argued that what is becoming increasingly important in e.commerce is not “who’s first to market, but who is first to patent”. Amazon.com has hired a large number of lawyers to patent its innovations. Amazon.com, after a three-year wait, has received a patent for “affiliate programmes”. It also holds the patent on “one-cli
ck” buying. The issue of patenting innovations in
e.commerce, however, is a complex one. Speed of imitation
is a second challenge. The speed of the e.commerce industry leaves no time for implementing a barrier based on patenting: patents will be out of date by the time they are issued. Similarly, while priceline.com holds a patent for “reverse auction” concept, imitators, including Amazon.com, have used the concept since its development.
Conclusion, Amazon has become
three times the internet sales revenue of runner up Staples.Inc. due to continuous innovation, speed of implementation and patenting.
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