Td7 amazongroup1


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Td7 amazongroup1

  1. 1. STRATEGY Case Study: AMAZON.COM TD7, Groupe 1: Benjamin DEUNET, Firdaous FARTAT, Julien EMONIDES, Guillaume GALLI, Orianne GAMBINO
  2. 2. 1)’s Stragey during the period 2007 to early 2010 Expansion of the core Business (physical media): • Development of the Digital contents (MP3 Music Store, language software products). • The widest selection of products (shoes, handbags, Jewellery, Motorcycle Store) • BtB ( shopping for start up and growing businesses)
  3. 3. 1)’s Stragey during the period 2007 to early 2010 With a constant strategy of Innovation and Investment • Building new technologies (Kindle, Kindle 2, Amazon Web Services, Amazon Elastic Block Store, ) • Virtual salesperson and personalized services… • …In order to offer a better customer experience. • Lowering operating costs => lower prices
  4. 4. 1)’s Stragey during the period 2007 to early 2010 Acquisitions and Partners, a key of success: • Relationships with Publishers (Christian Publishers, Simon&Schuster) • Partnership with suppliers (Warner Music, Sony Music Entertainment) • Acquisition with online store (, Abebooks) • And PC game distributor (Reflexive Entertainment)
  5. 5. 1)’s Stragey during the period 2007 to early 2010 Logistical management • New Warehouses (Opening of a new 600000 square feet fulfilment centre in Hazleton 2008) • 19,7 million square feet of properties all over the world
  6. 6. 2)’s Strategic capabilities Resources Competencies o Technology infrastructure o Competitive prices o Bezos Jeff o Quick delivery o Strategic implementation o wide choice o Develop accessibility o Customers centric o Strategic approach to recruitment o Customer experience o Strategic acquisition o Strategy of scope
  7. 7. 2)’s Strategic capabilities Competencies: • Competitive prices and Cost leadership strategy:( Economies of scale) Amazon provides the widest range of products to achieve the economies of scale and benefit from the low costs of displaying those products on its online marketplace • Superior quality services and products: Amazon delivers the best quality services and offers one of the lowest and fastest shipping.. • • Wide selection of goods and services : Amazon offered the widest selection of product from its vast selection of retail products to amazon’s software and cloud computing offerings
  8. 8. 2)’s Strategic capabilities • Convenience: amazon continually strived to please its customers. Amazon has a brand reputation for great customer service • Strategic acquisitions. Amazon has been successfully acquiring new firms to bring the new products, services, capabilities, assets and skills to the business. Amazon is today capable of offering cloud services, can develop its information management and customer relationship • Costumer experience: with its advanced technology Amazon found new ways to improve costumer experience.
  9. 9. 2)’s Strategic capabilities Resources: • Strategic approach to recruitment : Amazon recruits qualified labor: • Amazon recruit a former Wal-Mart vice president • Amazon is located in Seattle as there was a large supply of computer software available • Jeff Bezos expertise and personality
  10. 10. 2)’s Strategic capabilities • Technology infrastructure: amazon invests heavily in innovation to improve efficiency, lowering operating costs and enabling the company to offer lower prices to customers. • Amazon web services and digital contents • Efficient logistics and distribution: (Accessibility development) Amazon has a number of fulfillment warehouses in each market it operates thereby the goods could be distributed faster and with lower cost.
  11. 11. 2)’s Strategic capabilities Efficient logistics and distribution: (Logistic, Speed and innovation) • V: it provides competitive advantage to Amazon because the competitors do not currently have. Besides the cost allows amazon to make the returns expected • R: efficient logistics and distribution (access to innovation and speed ) are rare and uniquely possessed by few companies • I: Other companies find that very difficult to imitate and obtain because it’s really complex to have a huge number of warehouses and it’s really hard to access to innovation. It needs a massive investment • N:Non substitutable
  12. 12. 3) Evaluate Amazon’s diversification strategy • Amazon was at the beginning only an online bookstore but they rapidly diversify their activities by acquire others companies or launch news systems. • They have a huge technology improvement policy and invest a lot in that sector in order to launch new concept such as kindle in 2007 or the cloud computing. They want to personalise every consumers experience and to invent new consumption models. • Beside they try to increment the range of the offer with new sites for mode or multimedia services for example.
  13. 13. 3) Evaluate Amazon’s diversification strategy That is a good policy because: • Diversify their activities and their customers (BtoB and BtoC) secure their cash flows face to crisis. • Book industry is in a period of restructuration because, like the music sectors, digital books will replace effective books. • Operating advantage by controlling the software they used (investments) • But theses huge amount of investments can put the company in jeopardy because compared to their competitors (ebay) they have a very low profit margin and a reduction of the sales would have an impact on cash flows and for instance on the investments in new technology.
  14. 14. 4) Strategy for Amazon going forward • The last figures shows that net incomes has decreased from 1 152 millions to -39 during the 2010-2012 period. The reason could be the high level of Investment compare to the low profit margin. • The technological advantage is no longer sufficient. The solution could be the reduction of Investment in order to favor cash flows. • Continue the diversification (market and services)