What do you think is the most critical strategic issue confronting Amazon? Explain your answer . Amazon.com was launched in the year 1995. Its headquarters is situated in Seattle in the United States of America. In the beginning, the company sold books as its main business (Saunders 2009, p. 3). However, since then the company has extended into selling CDs, DVDs, computer software, electronics, and other household appliances. The company has spent a huge amount of money on building their brand. Along its growth path, the company has encountered numerous challenges. This section focuses on the most critical strategic issues confronting the company. One of the major challenges faced by amazon.com is stiff competition. During its earlier years of operation, there were few online retailers unlike it is today. Over time, several players have entered the market eating into the company’s customers. Currently, there is enormous pressure being put on the company from the rivals (Scally 2012, p. 5). A few years ago, several online retailers merged with the aim of competing against Amazon on the online business. These companies were the Ingram Book Group, Barnes, and Noble. Through merging, the companies gained a competitive advantage. Apart from online competitors, the company still faces indirect competition from offline retailers. Another major challenge that affects Amazon’s operations is disintermediation (Saunders 2009, p. 5). For instance, the company faces immense threats from producers and publishers who are now targeting consumers bypassing the role that the company should have played. If companies that are relying on Amazon for their distribution begin distributing their products and services online as some have already done, the company will become obsolete in the future unless they invest in other sectors. Other challenges faced by the company are changes in technology and the risk of heading in the wrong direction. Drawing on relevant topics in this unit, what do you consider Amazon’s strategic capabilities? Explain your answer. Based on the relevant topics in this unit, I consider acquisition, alliances, strategic partners, and offering to be the company’s strategic capabilities. Since the establishment of the company, it has always been on the lookout for fresh markets, which embrace technological applications. With this strategy, the company has been able to collaborate with several emerging companies outside the publishing industry. For instance, the company has expanded its operations to retailing CDs, DVDs, computer software, electronics, and other household appliances over the years (Saunders 2009, p. 8). Equally, through acquisition, the company has managed to purchase Junglee and PlanetAll (Spector 2000, p. 12). By acquiring the above companies, the company has been able to enter into the European market. Junglee enables the company to do an evaluation shopping on the internet. On the other hand, PlanetAll acts as a prompt website for the company reminding customers to purchase their gifts through its website. Similarly, by collaborating with drugstore.com, the company has been able to retail pharmaceuticals expanding its line of products. By signing agreements with other online companies, the company has been able to direct hotlinks to its mother website.