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Trascrizione

Institutional setting

The internationalization path of Amazon

USA: Liberal Market Economy

Free Enterprise System

  • Private property
  • Freedom of choice
  • Motivation of self interest
  • Competition
  • Limited government

Low degree of government intervention

Competitive market

  • The Internet made it possible to banish geographical boundaries, allowing anyone with an Internet connection to use the service directly from the comfort of their homes.
  • The dotcom boom in the United States and its expansion globally facilitated Amazon’s internationalization process
  • E-commerce company

The Uppsala Model

  • The Uppsala Model describes foreign market entry as a learning process
  • Initial commitment of resources to a foreign market
  • This leads to an increase in local market knowledge
  • Continuation of this cycle until sufficient market knowledge gained for expansion
  • Implication that companies start their overseas expansion in a nearby market as an attempt to minimize the psychic distance.

History

Conclusion

Geographical aspect and psychic distance

  • Set up in 1994
  • Online Book Retailer
  • Expansion of Range
  • Incorporated as a Company
  • Multinational Operations
  • Warehouses and Customer Service Centers all over the World
  • Sales Revenue Model

  • Collaborations
  • Home Country Culture
  • Investment in UK
  • Strengthening Delivery Networks

Expansion generally occurs first in countries which are geographically close and culturally similar.

However this was not the case for Amazon.

Amazon's expansion into France and Japan in 2000.

Expansion into Canada thereafter, in 2002

This was despite Canada being closer geographically and in terms of psychic distance

Institutional influences

Bibliography

Market Entry

  • Dot com bubble
  • Rise of many companies online
  • Free market
  • Cost competition
  • Radical innovation
  • Business practices
  • Anticompetitive practices
  • Weak labour protection

Hanschke, H. (2015). Strikes at Amazon German warehouses up to Christmas. [online] Reuters. Available at: http://www.reuters.com/article/us-amazon-com-germany-idUSKBN0U40SY20151221 [Accessed 17 Mar. 2016].

Satariano, A. (2014). Amazon Worker Issues Mount Amid Labor Department Scrutiny. [online] Bloomberg.com. Available at: http://www.bloomberg.com/news/articles/2014-06-14/amazon-worker-issues-mount-amid-labor-department-scrutiny [Accessed 17 Mar. 2016].

Singh, N. (2011) Localization strategies for global e-business, Cambridge, Cambridge University Press

Zohari, T. (2012) ‘The Uppsala internationalization model and its limitation in the new era |’, Business, Digit Pro, [online] Available from: http://www.digitpro.co.uk/2012/06/21/the-uppsala-internationalization-model-and-its-limitation-in-the-new-era/ (Accessed 14 March 2016).

Thomas, D. and London (n.d.) ‘Amazon steps up European expansion plans’, Financial Times, [online] Available from: http://www.ft.com/cms/s/0/97acb886-c039-11e5-846f-79b0e3d20eaf.html#axzz42KOhjMD4 (Accessed 14 March 2016).

  • In terms of traditional foreign market entry, Amazon did not follow the Uppsala Model.
  • Amazon's internationalisation strategy was to directly acquire companies in foreign markets without local market knowledge
  • Germany, UK, China etc
  • Initially, Amazon expanded into Canada and operated there without a single Canadian employee

The internationalization of amazon

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