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Essay / Amazon - 802
Would Amazon.com achieve its aggressive goal of becoming cash flow positive by the end of 2001? Despite a growing customer base, a recognizable brand, and an innovative business model concept, Amazon.com found itself unable to achieve profitability. Facing the threat of bankruptcy, Amazon.com founder and CEO Jeff Bezos was confident his online retail company would turn a profit by the end of 2001. Understanding the challenges ahead, aggressive leadership de Bezos positioned the company for future success based on several key elements. factors including: the company's upward trend in net sales, strategic business partnerships and proprietary information technology-enabled assets. From 1997 to 2000, Amazon experienced positive net sales growth, making this upward trend likely to continue in 2001. Although operating expenses in ordering, marketing, and technology also increased, but these expenses were necessary to solidify Amazon's future growth and profitability opportunities. In 1998 and 1999, Amazon "spent more than $429 million to build a state-of-the-art digital commerce infrastructure and operations connecting nine fulfillment centers and six customer service centers located in the United States, Europe and Asia" ( Applegate, 2009, para. This strategic spending on technology and restructuring suggests that future operating costs would likely stabilize and the company would eventually turn a profit. In 2000, Amazon announced its partnership with Toys "R" Us, Inc. This strategic partnership enabled Amazon to use its retail technology to build and host the Toys "R" Us online store alongside its digital fulfillment centers and state-of-the-art customer service that it purchased in 1998-1999 (Applegate, 2009, para. 1). This partnership in the middle of paper infrastructure allows the company to create and maintain value over time. Works Cited Applegate, L., Austin, R. and Soule, D. (2009). Corporate information strategy and management: Texts and cases. 8th ed. Boston: McGraw Hill, 2009. Can Amazon make it happen? (2000, July). Retrieved from Bloomburg Businessweek: http://www.businessweek.com/printer/articles/75604-can-amazon-make-it?type=old_article Retrieved online: March 5, 2014. Lambeth, J. (January 23, 2002). Amazon turns a page with its very first profit. Retrieved from The Telegraph: http://www.telegraph.co.uk/education/3293111/Amazon-turns-a-page-with-first-ever-profit.html Accessed online: March 5, 2014. Lashinsky, A. (November 16, 2012). Amazon's Jeff Bezos: The Ultimate Disruptor. Excerpt from Fortune & Money: CNN Money: http://management.fortune.cnn.com/2012/11/16/jeff-bezos-amazon/ Accessed online: March 5, 2014.