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Can Amazon Survive an Economic Downturn ABSTRACT Amazoncom is the largest online retailer Amazon has yet to produce a profit and it has seen its market capitalization drop tremendously over the past year Without any profits and no cash Amazon will be doomed for failure Can Amazon survive an economic downturn by becoming profitable increasing market share and fighting off competition Without any profits and cash Amazon will be doomed for failure INTRODUCTION Started in July 1995 Amazoncom Amazon immediately became the largest online retailer Amazon has a constantly growing database of over 29 million customers in more than 160 countries The company built a foundation as an online bookstore but has quickly began selling other items such as CDs videos DVDs etc SUMMARY Three Basic ForcesRevenue Market Share and Defense The driving forces behind Amazons strategic direction are not any different from the driving forces behind most companies Amazon wants to conduct business indefinitely Moreover Amazon wants to increase revenue and market share and fight off competition Amazon must become profitable in order to remain in business longterm Investors want to see results Investors are really getting tired of valuing internet companies on the basis of potential profits and Amazon definitely is no exception to this Increasing revenue is extremely important for Amazon now considering the current state of the economy Amazon can no longer put market share ahead of profits Amazons share price is currently trading around its low of 13 If Amazons share price continues to go down it will be strapped for cash Over the past year several internet companies have closed their virtual doors for business as their cash flow has dried up Amazon could be facing the same fate as some of these companies if it doesnt begin to produce profits Competition is heating up as brick and mortar companies begin to do more business over the
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