Answer must be in 300 words or more.

Amazon.Com When Jeff Bezos founded Amazon.com in 1995, the online retailer focused just on selling books. Music and videos were soon added to the mix. Today, you can purchase a wide range of media and general merchandise products from Amazon, which is now the world's largest online retailer, with over $85 bil- lion in annual sales. According to Bezos, Amazon's success is based on three core factors: a relentless focus on delivering value to customers, operating efliciencies, and a willingness to innovate. Amazon offers customers a much wider selec tion of merchandise than they can find in a physical store, and does so at a low price. Online shopping and purchasing is made easy with a user-friendly in terface, product recommendations, customer wish lists, and a one-click purchasing option for repeat customers. The percentage of traffic that Amazon gets from search engines such as Google has been falling for several years, whereas other online retail ers are becoming more dependent on third-party CIUPUI 4 LUTYWYyye search engines. This indicates that Amazon is in- creasingly becoming the starting point for online purchases. As a result, its active customer base is now approaching 250 million. To deliver products to customers quickly and accurately, Amazon has been investing heavily in a network of distribution centers. In the United States alone there are now over 40 such centers. Sophisti- cated software analyzes customer purchasing pat- Eterns and informs the company what to order, where to store it in the distribution network, what to charge for it, and when to mark it down to shift it. The goal is to reduce inventory-holding costs while always hav- ing product in stock. The increasingly dense network of distribution centers enables Amazon to reduce the time it takes to deliver products to consumers and to cut down on delivery costs. As Amazon grows it can support a denser distribution network, which it turn enables it to fulfill customer orders more rapidly and at a lower cost, thereby solidifying its competitive ad- vantage over smaller rivals. To make its distribution centers even more efficient, Amazon is embracing automation. Until recently, most picking and packing of products at Amazon distribution centers was done by hand, with employees walking as much as 20 miles per shift to pick merchandise off shelves and bring it to packing stations. Although walking 20 miles a day may be good for the physical health of employees, it represents much wasted time and hurts produc- tivity. In 2012, Amazon purchased Kiva, a leading manufacturer of robots that service warehouses. Post the acquisition, Kiva announced that, for the next 2 to 3 years, it would take no external orders and instead focus on automating Amazon's dis- tribution centers. Kiva robots pick products from shelves and deliver them to packing stations. This reduces the staff needed per distribution center by 30 to 40%, and boosts productivity accordingly. On the innovation front, Amazon has been a leader in pushing the digitalization of media. Its in- vention of the Kindle digital reader, and the ability of customers to use that reader either on a dedicated Kindle device or on a general-purpose device such as an iPad, turbocharged the digital distribution of books-a market segment where Amazon is the clear leader. Digitalization of books is disrupting the es- tablished book-retailing industry and strengthening Amazon's advantage in this segment. To store digital media, from books to films and music, and to enable rapid customer download, Amazon has built huge server farms. Its early investment in cloud-basedin- frastructure has turned Amazon into a leader in this field. It is now leveraging its expertise and infrastruc- ture to build another business, Amazon Web Services (AWS), which will host websites, data, and associated software for other companies. In 2014, this new busi- ness generated over $2.5 billion in revenues, making Amazon one of the early leaders in the emerging field of cloud computing. Jeff Bezos is on record as stating that he believes AWS will ultimately match Amazon's online retail business in sales volume. Sources: "Amazon to Add 18 New Distribution Centers" Supply Chain Digest, August 7, 2012; A. Lashinsky, "Jeff Bezos: The Ultimate Disrupter," Fortune, December 3, 2012, pp. 34-41; S. Banker, "The New Amazon Distribution Model Logistics Viewpoints, August 6, 2012; G. A. Fowler, "Holiday Hiring Call: People Vs Robots," The Wall Street Journal, December 10, 2010, p. BI. Read the case study on Amazon.com (see Appendix_Week_5_Tutorial_Amazon.com_Case) and answer question 5.3. Question 5.3. Do you think that Amazon has any rare and valuable resources? In what value creation activities are these resources located? How sustainable is Amazon's competitive position in the online retail business? (Selected for Assessment) THE END