1. Why did Amazon consider international expansion in the first place?

Is international expansion
a key success factor in Amazon´s industry?

Internet growth was 2,300 per cent in 1994. Amazon’s main strategy considered keeping low
amount of inventory stock (to minimize the inventory risk) in many strategically important
locations, as the U.K. or Japan, which allowed them quick access to vast amount of countries all
around the world. That makes international expansions a key strategy to success for amazon.

2. Why did Amazon choose the United Kingdom as its first foreign entry location? Why not other
countries such as Canada and Australia?
I think, particular reasons for Amazon choosing UK as the first country to entry and the success
of Amazon in UK are:

1. Diverse suppliers operated in UK were selling different groups of goods, which made them
weak against Amazon’s approach, and made UK market more attractive.

3. What strategies did Amazon use in the United Kingdom? Did these strategies make sense?

1. Amazon suggested best selection of most popular (among the UK citizens) goods (Books, CD,
computer hardware, software and videos), which was a smart step.
2. Amazon was importing these groups of products one after another, which looks as a strategy to
minimize the risks, and it fully justified itself.
3. Smartly planned promotions and free-delivery campaigns made Amazon primary supplier of
various products for affordable price and conditions, which perfectly suits the UK middle class
group, which is big there.

4. Why did the company choose to enter Japan after the United Kingdom and Germany?

Amazon.co.jp became the first website in an Asian language and the fourth international store
for Amazon. Prior to the entry, Japan was Amazon’s largest export market, bringing annualized
sales of $34 million. – Which means there was no western company operating in that market
before

Amazon focused on customer service to grow its customer base. Over 70 per cent of the
population in Japan used the Internet.

Approximately 99 per cent of the population fully comprehended only website content in the
Japanese language. Amazon developed a Unicode-enabled platform for its Japanese language
site, in collaboration with Basis Technology, a software service provider with expertise in Asian-
language information processing. While Japanese consumers enjoyed Western products and
lifestyle, most goods were attached to their own culture.

In July 2003, Amazon launched an electronic store with tens of thousands of products, and later
that year opened the home and kitchen market.

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 5. To extent the competition power of Amazon, Amazon used:

 Offered books in English at a bargain compared with Japanese retailers.

 Amazon focused on customer service to grow its customer base, developed a Unicode-
enabled platform for its Japanese language site to service Japanese.
 Formed alliances and made acquisitions.

By using these methods, Amazon could increase its core power to complete.

6. From all the international entries of Amazon, there is a very distinct model or usual practice
of how Amazon gets into that market. First of all, while Amazon enters a certain market it will
only sell parts of its whole products (books). Then will develop into other kinds of goods (CDs,
games). After that, will launch services, which cater to local customers through setting up
services, opening fulfillment and customer service centers.
Although, to perform better at the local market and also to impair its local competitors.
Amazon will acquire certain retail companies, In the UK, China, India. It is very helpful for the
company to enter a new market by acquiring local competitive companies.

7. Nowadays, the oversea expansion is no longer successful as it did in the past 10 years for
Amazon. The company now faces a very common dilemma of globalization, such as the markets
of China possess a unique environmental and cultural distinction, what is more.
Amazon could slow down the step to expand with international strategies to handle the
difficulty in America and Europe with foreign markets. Amazon could lose pertinence towards
each of them.

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