amazon.com business model

- Company Overview

- Business Model - Additional Material: Articles

Contents… !

Early Beginnings…!

• Amazonwasfoundedin1995 !

• JeffreyPreston"Jeff"BezosistheChairmanofAmazon.com !

SOWHATDOESAMAZON.COMSELL?!

Amazon.comsellslotsandlotsofstuff!

YoucanGETAnything&EverythingatAmazon.com !

Foundedin1994SeaDle,

USA

WentPublicin1997

1999:AmazonAucKon,Zshops

2005:Pinzon

2007:AmazonMP3AmazonFresh

2008:FilmProducKon,AmazonCurrencyConverter

2006:VotedNo.1InCustomer

Service2010:Amazon

Studios

2011:AmazonAppstore

AmazonCloudPlayerKindleTouch

2000:AmazonMarketplace

1.)Amazon’sBusinessModel

FIRMINFRASTRUCTURE:CentralCustomerDataWarehouse

HRMANAGEMENT:EmployeeUniqueBenefits

TECHNOLOGYDEVELOPMENT:HighInvestments,UnknownOpportuniKes,HardwarefromHP

PROCUREMENT:UsingSBU:BookSurge,DistribuKonCenters

INBOUNDLOGISTICSReturn

unsolditemstosupplier,collect

customerinfo.

OPERATIONSGood

PaymentSystem,24

hourWarehouseOperaKon

OUTBOUNDLOGISTICSClose

ProximitytoMotorways,ReachforSpecificlocaKons

MARKETING&SALESDiscounts,RecommendaKons,

InteracKveshipping

SERVICEReturn

Policy,PriceComparison M

ARG

IN

MAR

GIN

1.)ValueChainAnalysis

Amazon.comusesamulK‐levelede‐commercestrategy

Business Foundation and Model !

2.)CompeKKveAnalysis

DIRECTCOMPETITORS

• EBay• Barnes&Noble

2.)CompeKKveAnalysis

INDIRECTCOMPETITORS

• GAP• L.L.Bean• Google.com

E-Retailing Strategic Group Analysis !

• “EarthsBiggestSelecKon”• DailyAucKons• BulletProofCustomerService

• SynergisKcEffectof…

2.)CompeKKveAnalysis COMPETITIVESTRATEGY

1.  Shopping Convenience

2.  Ease Of Purchase 3.  Speed 4.  Decision Enabling

Information 5.  Wide Selection 6.  Discounted Price 7.  Reliability of Order

Fulfillment

2.)CompeKKveAnalysis

3.)GrowthStrategies

BUSINESSMODEL

• VirtuousCycle

• $14BillionRetailMachine

• Direct‐to‐consumerOnlineModel

• ReapBenefitsofTechnology

Expansion

• CategoryExpansion

• InternaKonalExpansion

4.)MarketSegments SEGMENTATION

• BasedonActualPurchaseBehavior

• EachnewpurchaseslightlyaltersrecommendaKons

• CollaboraKveFiltering

• SellerCustomers:1.3millionacKvecustomers

• DeveloperCustomers:UseAmazonWebServices

• LoyaltyProgram:AmazonPrime(FeeBased)

5.)ValueProposiKon

Convenience

Price

SelecHon

CustomerService

SYNERGISTICEFFECT

WhatmakesAmazonaGiantisintheDetails?

CustomizeBuyer’sExperience

CustomerTracking PersonalShopper

Cookies

4.)ValueProposiKon CUSTOMERVALUE

• RecommendaKons:Regular,GimGiving

• Community:Listmania

• IndividualSellers‐AmazonMarketplace

‐Amazonzshops

‐AmazonAucKons

Time‐sensiHvediscounts.ANeraspecifiedperiodofavailabilitytheofferdisappears.

Amazon’s Gold Box!

6.)RevenueModel REVENUE

• OnlineBookstoretoOnlineShopping• AmazonMarketplace:fixedpriceonlinemarketplace

• 64%revenuefrombooks,musicvideo

• AmazonAdvantage:10‐15%ofSales

• AffiliatePartnershipMarkeKng

‐Amazonpayscommissiontositeowner

• NegaKveoperaKngcashflowcycle‐Amazonispaidbycustomers

beforeitneedstopaysuppliers

Article 1 !

Amazonmaybenefitasdigitalgoodssalesjump

• Fastestgrowingcategorythisholidayseason

• KindleFireTablet‐$199

• Aggressivepricing–VolumeSales

• Increasingavailabilityofdevices

• IncreasingDownloads• Trendexpectedtorisein2012

Article 2 !

Amazon’sAWSStorageGatewaytoconnectwithCloud

• AmazonWebServicesannouncedtheGatewayforreliable&Cost–effecKveStorageontheAWSCloud

• AmazonElasKcComputeCloud:ForaddiKonalcapacityduringpeakperiods

• WillreducecostofdatastorageandcompuKnginfrastructure