Amazon.com is on of the leading entertainment retailers on the Internet. Recognized for its speedy expansion through strategic mergers and acquisitions, the company has still been unable to turn a profit. Amazon's lack of profitability may be due largely to its massive expansion which has worked to weaken its competitive strength against its competitors and has stretched its resources too thin.
Alternatives for Amazon
The best alternative would be for Amazon to end any further mergers or acquisitions, eliminate any new alliances and concentrate on its most productive divestitures. The wide array of business operations that the company must maintain is responsible for the company’s continuous lack of liquidity, a condition that threatens to destroy the entire company. Amazon should sell-off some of its less productive acquisitions to increase its assets. It should also reduce or eliminate its practice of making direct purchases. While the company’s inventory may initially figure as an asset, the growing potential for lack of sales due to trend changes and a lagging economy may turn inventory into a liability.
This alternative is prefered because it would allow Amazon to gradually move out from under the burden of growing debt, and the negative image it has attained as a company with a major lack of business focus.