Topic > Amazon Europe Strategy - 1777

Amazon Europe Strategy In 2003, Amazon Europe faced the challenge of restructuring its distribution network to meet growth demands. After five years of operating across three independently managed organizations in the UK, Germany and France, the company recognized the need to adapt its business structure and market positioning. Although many areas of the supply chain had already been optimized, there was still plenty of room for further improvements. European markets were expanding rapidly and it was certain that the current structure would not be sufficient, even in the foreseeable future. Amazon's goal in EuropeThe original goal, set in 2002 at US headquarters, was for Amazon Europe to "catch up" with US operations by 2007. To achieve the goal, three key measures were considered to implement: expand product offering (similar to US range); create new Marketplace activities (Amazon's platform for additional business sectors); introduce Amazon to other European markets. When considering one or more of the above options, the company was also faced with the task of determining the level of centralization of its activities. Depending on the specific structure of the network there would be the possibility of grouping tasks that are carried out individually in each of the existing markets. The key would be to find the balance between using synergies for efficiency and maintaining sufficient flexibility in each country to adapt to market specificities. The development of Amazon in the United States as a modelSpeed, simplicity and enjoyment for the customer were the initial drivers of Amazon in the United States in 1995, and after its rapid success it soon claimed to be the "largest bookstore on Earth". Inventories were kept at low levels, as the company depended on wholesalers to carry inventory and supply books on demand. Direct relationships were soon established with publishers, who, although they did not prove to be as efficient as wholesalers from the supply point of view, offered slightly higher discounts. Typical order fulfillment times for Amazon customers ranged from four to seven days. In the first three years of the company's existence, distribution center capacities increased, the number of titles in stock grew, and major investments were made in logistics (particularly in the back office). . Thanks to the expansion, delivery times have been reduced and customer service has been improved. As competition continued to intensify, Amazon pursued a massive growth strategy, both in product selection and physical infrastructure (6 additional DCs opened).