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Case
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Reference no. 214-073-1
Prize winner
Authors:
Jeremy Ghez (HEC Paris)
Published in:
2014
Length:
12 pages
Data source:
Published sources
Abstract:
This case explores the microeconomic determinants of Amazon’s success as well as the market forces that can potentially undermine the firm’s development in the future. So far, Amazon’s ever-changing business model and portfolio of activities have allowed the company to continuously adapt to new market dynamics and new business realities. Whether this will be the case in the future depends on Amazon’s ability to adapt to new competitive challenges and to clear current and future regulatory hurdles. In particular, while some headlines suggested that the rise of Amazon was inescapable and that this meant the demise of traditional retailers like Wal-Mart, it now appears that Jeff Bezos’s rivals are fighting back. Similarly, these same headlines about Amazon’s rise tend to overlook the potentially far greater challenges that Amazon may need to face from other GAFA firms as well as from Alibaba. Ultimately, the sheer size of Amazon could set regulatory issues that the firm will need to face. This case has been featured on our website, click to view the article.
Learning objectives:
1. Help participants understand what a meaningful microeconomic analysis of a firm and of an industry can mean. 2. Apply the concept of creative destruction to a real-life case. 3. Think about what microeconomic theory has to say about 'markets' can shed light on how Amazon’s marketplace works. 4. Illustrate the various degrees of competition that microeconomics is interested in through a concrete example.
Settings:
World, Retail, 2010-2014 essentially, More than 88,000
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