Amazon

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AMAZON

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Amazon

  1. 1. Market Success Story Syndicate Group No.6 November 2007
  2. 2. Agenda <ul><li>Who are Amazon? </li></ul><ul><li>Interesting facts to keep you awake </li></ul><ul><li>How they achieved success? </li></ul><ul><li>But… vulnerabilities </li></ul><ul><li>Conclusion </li></ul>
  3. 3. Who are Amazon? <ul><li>Amazon.com (NASDAQ: AMZN), a Fortune 500 company based in Seattle, Washington USA. It was one of the first major companies to sell goods over the Internet and was one of the iconic stocks of the dot-com bubble. </li></ul><ul><li>Since its creation in 1995 when Amazon began as an online bookstore, they have significantly expanded the product offerings, international sites, and worldwide network of fulfillment and customer-service centers. </li></ul><ul><li>A blend of traditional retail principles and innovative application of marketing practices </li></ul><ul><li>Now after twelve years, Amazon has $11 billion USD </li></ul>
  4. 4. Financial Performance <ul><li><WHICH GRAPH?> </li></ul>
  5. 5. Amazon Vision <ul><li>‘‘ Earths most customer centric company </li></ul><ul><li>- Start with customers and work backwards’’ </li></ul>-Jeff Bezos, Founder
  6. 6. Interesting facts to keep you awake <ul><li>What was the first name for the company (before Amazon)? </li></ul><ul><li>Cadabra Inc. </li></ul><ul><li>Where does the ‘Amazon’ name come from? </li></ul><ul><li>The name reflected the vision of Jeff Bezos, to produce a large scale phenomenon like the Amazon river. </li></ul><ul><li>How much money has Amazon spent on real state (headquarters, warehouses, etc)? </li></ul><ul><li>Amazon owns zero real estate! </li></ul><ul><li>In 2003 Amazon passed the $5 billion sales mark – it took Wal-Mart 20 years to achieve this. Amazon has only 13,900 employees (2006) , Wal-Mart has 1.9 million employees (2007) . </li></ul>
  7. 7. Interesting facts to keep you awake <ul><li>Which does Amazon do with main competitors (big traditional bookstores) ? </li></ul><ul><li>Create a partnership! Amazon markets and distributes their books online in return for a commission online (Waterstones – UK, Borders – US) </li></ul><ul><li><ANYTHING ELSE> ? </li></ul><ul><li><ANYTHING ELSE> </li></ul>
  8. 8. “ Be afraid of our customers, because those are the folks who have the money. Our competitor are never going to send us money” - Jeff Bezos, Founder.
  9. 9. “ We don’t make money when we sell things; we make money when we help customers make purchase decisions” - Jeff Bezos, Founder.
  10. 10. “ But if your focus is on customers, you keep improving” - Jeff Bezos, Founder.
  11. 11. “ Data is King at Amazon”
  12. 12. “ Today automation replaces intuition”
  13. 13. “ Amazon is not merely a store, but an immense repository of facts”
  14. 14. “ If we can get this to work, it will be big” - Jeff Bezos, Founder.
  15. 15. What makes Amazon successful <ul><li>Copy Chart from Darren’s Presentation </li></ul>
  16. 16. Who is clicking…..? ’Be afraid of the customers, because those are the folks who have money. Our competitors are never going to send us money’’ – Jeff Bezos <ul><li>Customer is the King – Create an experience for him </li></ul><ul><li>‘ Culture of Metrics’ Customer’s each ‘click’ on website is recorded- a valuable asset for Amazon </li></ul><ul><li>Allows clear sensing of customer needs & preferences </li></ul><ul><li>Formation of ‘S Team’ to address strategy issues </li></ul><ul><li>Customer is the key at all levels in the Organisation </li></ul><ul><li>Customer Loyalty and repeat purchase </li></ul><ul><li>Amazon do not over emphasise competitors – It has turned some of them like Borders in to collaborators </li></ul>
  17. 17. Whole World is market place….. <ul><li>Strategic change in vision from being an online bookstore in 1995 to becoming world’s largest online store </li></ul><ul><li>Leveraged on the strength of brand value and business model </li></ul><ul><li>Very low fixed costs </li></ul><ul><li>Geographical expansion in Canada, Western Europe, Japan & most recently China. </li></ul>
  18. 18. Amazon’s three pillars of innovation ’Relentlessly focus on customer experience by offering low prices, convenience and a wide selection of merchandise’ – Jeff Bezos <ul><li>Add Picture from Darren’s presentation </li></ul>
  19. 19. Amazon …an experience <ul><li>Selection </li></ul><ul><ul><li>Wide product range </li></ul></ul><ul><ul><li>Books, videos, many more …and they have a category ‘Crazy Things’ under Toys & Games ! </li></ul></ul><ul><li>Convenience </li></ul><ul><ul><li>Selection available on your screen </li></ul></ul><ul><ul><li>Various price ranges – New & Used </li></ul></ul><ul><ul><li>Delivery in shortest possible time </li></ul></ul><ul><li>Prices </li></ul><ul><ul><li>Prices revised daily </li></ul></ul><ul><ul><li>Many times Free Shipping </li></ul></ul><ul><ul><li>‘ Goldbox’ – Discounts on new categories </li></ul></ul>
  20. 20. Relationships matter <ul><li>Customers </li></ul><ul><ul><li>Effective Process management </li></ul></ul><ul><ul><li>Satisfied Customer </li></ul></ul><ul><ul><li>Low costs </li></ul></ul><ul><li>Competitors </li></ul><ul><ul><li>Turn them into collaborators </li></ul></ul><ul><ul><li>Superior Technology Platform – value for competitors to use the platform, advantage for Amazon to offer wider choice </li></ul></ul><ul><li>Collaborators </li></ul><ul><ul><li>Amazon Marketplace – Customers and retailers can sell their new and old items </li></ul></ul><ul><ul><li>Amazon Merchants – Larger third party Merchants </li></ul></ul><ul><ul><li>Amazon Affiliate Programme- Link on Amazon site – fees to Amazon </li></ul></ul>
  21. 21. Difficult terrain for The Mighty River <ul><li>Presence in new markets- Lack of local knowledge and practices </li></ul><ul><li>Better known local brands </li></ul><ul><li>Too many new categories may result in loosing focus </li></ul><ul><li>Pace of change in technology and high level of investment required to upgrade- may impact customer service levels </li></ul><ul><li>Impact on image – service levels of associates </li></ul><ul><li>Strain on operational, management & financial resources </li></ul>
  22. 22. Conclusion <ul><li>Amazon – Certainly a success story </li></ul><ul><li>Customer at heart of everything they do </li></ul><ul><li>A model for innovative implementation of Marketing Strategic Pathway </li></ul><ul><li>Not just big ….spectacular </li></ul><ul><li>Needs to optimise growth to avoid ‘overexpansion’ </li></ul><ul><li>Dependency on collaborators is high </li></ul><ul><li>Remember there are ‘Anti Amazon’ sites on WWW </li></ul>
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