A business model-based study on the sustainability of internet newcomer: The case of Amazon.com
Authors:   Asia-Europe Perspective Association, Kim Janghoon , Kim Jootae 
Published: June 2018

It has been interesting issues that find out the source of competitive advantage to create abnormal rate of return in strategic management. In other words, strategic management has been finding way to create sustain competitive advantage as a source of above-average rate of return. This study is to search for the source of sustainability of internet newcomer. In accordance with business model perspective, it was recognized that the sustainability could be resulted from business model evolution of dot.com player. According to the result of case analysis, Amazon.com could successfully extend online bookstore, online retailer, web service, and marketplace model to business model convergence, in due order. Early stage,online bookstore model is to sell books to target customers at a low price via Amazon.com site. The model could build favorable brand image as a result of carrying on viral marketing and cost reduction, i.e. first-mover advantage. Next, online retailer model is to build best practice as a low price, high volume that basic commodities, or consumer goods are heavily sold at cheap price. This one tried to apply online bookstore success formula to other product items. Unlike the first two models, Amazon Web Service(AWS) Model intends to rent its own IT assets like servers to external customers -individual and corporate. AWS could expand cloud computing which is a kind of sharing service to take out a lease on servers to corporate clients. Whereas, Amazon Marketplace is a unique business model in that agency service are offered to build, operate and sustain e-marketplace system for corporate clients to build e-Commerce platform. This model was designed to share business activities like buying, payment, shipping or after-service with external customers. At last, e-book business looks like simply business model to sell Amazon Kindle to the target customer. On the contrary, the model represents business convergence in that it was to sell digital hardware and contents simultaneously. Furthermore, it could lead to create business ecosystem to attract several participants such as customer, publisher, writer, manufacturer, retailer, and telecom service provider. However, business forecast of the e-Book is lingering issue to wait and see expected outcomes in the near future. Until now, as a result of business model evolution, Amazon.com has been capable of delivering individualized customer experience to target audience, integrating its own core competence into newly business model. That is, success or failure of business model evolution depends on resource building mechanism how to exploit existing competence or explore new resources. After all, internet newcomer can have ability to sustain competitive advantage to create total customer experience to individual customers. The study is to provide practical implications for firms or managers of e-business industry in Korea. Future research are required to carry on empirical study or multiple case studies in order to generalize the above results.