es that Amazon is unlikely to grow sales rapidly enough to cover the costs of carrying its current infrastructure. However, Moody's believes that Amazon may be able to generate cash from sources other than retailing. The Company has an opportunity to use its reputation in fulfillment, bolstered by the initial success of its recent alliance to fulfill online orders for Toys "R" Us, to generate high-margin fee revenues and absorb operating costs" (Reamer, p. 5).The aforementioned opportunity will not come without challenges. Amazon has been facing increased competition. The Company's primary competition is Barnes & Noble, Inc. (BKS) and eBay Inc. (EBAY). "The site that is rapidly becoming known as The Place To Find Anything is eBay. Trouble is, it doesn't have the simplicity that Amazon does. That's still the image that many people have of eBay. They see it as a Turkish bazaar, where the stuff is garbage, you have to haggle for a price, and no one can be trusted. eBay is taking steps towards creating simplicity, however" (Lund, p. 2). Additionally, eBay and Barnes & Noble both are financially sound to compete with Amazon. "Amazon has done a solid job of aggregating products and making the experience simple, but its debt has put itself into a position of weakness" (Lund, p.1). Lastly, Barnes & Noble is in the somewhat enviable position of being a "bricks-and-clicks" or "clicks-and-mortar" establishment. This mitigates the threat of security concerns. If a consumer did not feel comfortable purchasing online, he/she could go into the physical store location and make the purchase. However, since Amazon only has "virtual storefronts", the Company does not have the high overhead associated with having physical sites. So, there are advantages and disadvantages to only being online.Next, an internal factor evaluation (IFE) matrix will be performed that summarizes and evaluates the major strengths and weaknesses in the functional a...
