Type of strategy a company follows and the efficiency in which it is implemented is directly related to the growth of the company.
If the strategy is highly efficient but it is not implemented in an optimum manner then it is hard for a company to reach its desired market value and attain desired profits.
The growth strategy followed by amazon is an excellent one as the aim is to attain a major market share but not to attain major profits.
There are usually two types of strategies followed:
1. Profit oriented
2. Sale oriented
By observing the previous market trends it is proven that it is a very rare combination of high profit and high sales unless and until the company has an extraordinary product with doesn’t have its rivals present in the market.
For example iPhone by apple is such kind of a product where the company holds its maximum possible profit as well as they have excellent sales volume.
The innovation made by the CEO and founder of amazon to commercialize the idea of reselling of books was an extraordinary one
It is not about amazon or any other company that has a market presence or market brand name or market share for its product, rather it is about implementing its current market strategy in such a way that it excels in field of sales as well as over all customer satisfaction.
If any company that works for its customers on minimum profit or zero profit market models is goanna ripe its fruit in near future for sure.
“Steve Jobs once remarked that customers don’t know what they want until Apple shows them. “((Forbes.com, 2014), (The New Yorker, 2014)
(Yarow, 2011) )
Similar was the strategy by amazon, they innovated things like ebooks, book lending online model , e book reader , leads them to a similar vision.
After the WWII the market we have is a customer-oriented market where the era of “relationship in marketing” (D. Steven White, 2010) comes into existence and market sales strategy is decided with respect to customer views.
The amazon kindle fire e-reader which is one of the top selling products by amazon (time, 2014) where there is no such efficient rival in the industry, so they can earn as much as desired profit from it and have bulk sale volumes.
Lets consider a case of profit oriented company, the company wants high profits with high reputation, total market share, market value of the company, they want such kind of image of the company that if its total sales volume is less still its profit is optimum, i.e., they want to sell less and earn the desired profit in them.
The disadvantages of this type of company is that if the market shifts or if the market strikes by recession these company’s balance sheet is highly affected, but in the case of high volume and low