Strategy for growth

by Gordon on Monday 15th October, 2012

Business strategies to achieve growth may focus on different things – for example, new product development, cost reduction, competitive pricing or customer relationships. The global engineering group, IMI, uses the knowledge and expertise of its people to meet the needs of its B2B (business to business) customers, providing tailored products and services to achieve competitive advantage.

Amazon, the multinational e-commerce business, has launched its new Paperwhite e-reader and an associated book lending scheme in the UK, Germany and France.  Its Chief Executive has confirmed it will not make a profit from sales of its latest Kindle tablet and e-reader devices. (BBC, 11th October 2012)

CEO Jeff Bezos told the BBC, ‘We sell the hardware at our cost, so it is break-even on the hardware. We want to make money when people use our devices, not when people buy our devices.

Mr Bezos said that part of the reason his strategy worked was that when people buy a Kindle, they read four times as much as they did before they bought the Kindle, ‘They don’t stop buying paper books – they continue to buy both types of books.’

Colin Gillis, a New York-based technology analyst at BGC Partners, said, ‘Amazon’s push into offering free digital media content is designed to correlate with its wider sales activity.  Prime [Amazon’s membership programme which includes the opportunity to borrow and read thousands of books for free from the Kindle Owners’ Lending Library] has been the core way for Amazon to keep its customers loyal.’

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