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Business 189 – Professor Shirley
Presented By: Alma Rios, Jeremy lacsa, José R.
Vigil, Farhaad Sheikh, Kunal Patel
Agenda
o Introduction
o EFE Matrix
o IFE Matrix
o IE Matrix
o SWOT Matrix
o Quantitative Strategic Planning Matrix
o Recommended Strategy
o Organizational Structure
o Organizational Culture
o Product Positioning Map
o Target Market
o Strategy Evaluation Report

                                           Jeremy
EFE Matrix
Key External Factors                           Weight   Rating   Score


Opportunities


The number of buyers over the internet is
                                                0.25     4.0      1.0
growing


Forecasting increase in US ecommerce            0.2      4.0      0.9


Threats


eBay, OverStock (NewEgg, CDW, etc)              0.35     4.0      1.4

Government regulations and instability on
internet products and sales in international    0.05     1.0     0.05
economies.

Low market entry barriers                       0.15     2.0      0.3


Totals                                           1               3.65


                                                                        Jeremy
IFE Matrix
Key Internal Factors                Weight   Rating   Score

Strengths

Customer Relationship Management     0.18     3.0      0.6

Strong Focus on R&D
                                     0.20     3.8     0.84

Diverse Products                     0.13     2.5     0.375

Logistical advantage
                                     0.15     4.0     0.76

Weaknesses

High Debt Ratio                      0.16     2.9     0.58

Risk of Introduction of Wrong New
                                     0.09     1.9     0.19
Category

Free Shipping affects bottom line    0.09     2.7     0.27

Total                                 1               3.615



                                                              Jeremy
IE Matrix

             Strong   Average      Weak


             (3-4)    (2.0-2.99)   (1-1.99)


  High
                          II          III
  (3-4)

Medium
               IV         V          VI
(2.0-2.99)

  Low
              VII        VIII         IX
(1-1.99)


                                              Jeremy
SWOT Matrix
                                       Strengths - S                          Weaknesses - W

                                       1. Customer Relationship               1. High Debt Ratio
                                       Management                             2. Risk of Introducing a New Product
                                       2. Strong Focus on R&D                 or Service
                                       3. Diverse Products                    3.Free Shipping affects bottom line
                                       4. Logistical advantage

Opportunities - O                      SO                                     WO
                                       S4O2 - Use logistic advantage to       O1,W3 - Leverage Amazon Prime
1. The number of buyers over the       reach consumers in new countries       subscriptions to absorb the cost of
internet is growing                    S1, O1 - Increase human interaction    free shipping.
2. Forecasting increase in US          within the website.                    O1,W2 - Create an online school that
ecommerce                              S1O2 - Provide a loyalty program to    provides certifications
                                       provide an incentive to both new and
                                       existing members


Threats - T                            ST                                       WT
                                       S1T1 - Maintain a strong relationship to T1,W1 - Increase Bond offerings to
1. Growth potential of direct          increase consumer loyalty.               gain further lead over competitors.
competitors (eBay, Overstock           S2,T3 - Set up affiliates with mom and T1,W2 - Capitalize on Government
Newegg, CDW, etc.)                     pop shops for brick and mortar in        use of cloud services to form
2. Government regulations and          store buying                             relationships.
instability on internet products and
sales in international economies.
3. Low market entry barriers

                                                                                                            Jose
Quantitative Strategic Planning Matrix
                                                                            Establish a loyalty
                                                      Increase human       program to provide       Create an online
                                                     interaction within    further incentive to   school that provides
                                                        the website.      both new and existing       certifications
                                                                                members
Key Factor                                Weight       AS        TAS         AS         TAS         AS         TAS
Strengths                                From IFE
Customer Relationship Management           0.18        4.0       0.72        4.0        0.72        4.0        0.72
Strong Focus on R&D                        0.20        2.0       0.40        2.75       0.55        4.0        0.80
Diverse Products                           0.13        0.0       0.00         3.0       0.39        4.0        0.52
Logistical advantage                       0.15        0.0       0.00         0.0       0.00        0.0        0.00
Weaknesses                               From IFE
High Debt Ratio                            0.16        0.0       0.00        0.0        0.00        1.0        0.16
Risk of Introduction of Wrong New
                                           0.09        3.0       0.27        2.0        0.18        1.0        0.09
Category
Free Shipping affects bottom line          0.09        2.0       0.18        2.3        0.21        1.0        0.09
Sum of Weights                               1.00                1.57                   2.05                   2.38
Opportunities                             From EFE
The number of buyers over the internet is
                                             0.25      4.0       1.00        4.0        1.00        4.0        1.00
growing
Forecasting increase in US ecommerce       0.20        4.0       0.80        4.0        0.80        3.0        0.60
Threats                                  From EFE

Growth potential of direct competitor      0.35        3.0       1.05        3.5        1.23        3.0        1.05

Government regulations and instability
on internet products and sales in          0.05        1.0       0.05        1.0        0.05        2.5        0.13
international economies.
Low market entry barriers                  0.15        3.0       0.45        3.0        0.45        3.0        0.45
Sum of Weights                             1.00                  3.35                   3.53                   3.23


Sum of Total Attractiveness Score                                2.46                   2.79
                                                                                                          Jose 2.80
Final Recommended
Strategy
 Introduce Online Certification Course for Amazon
  Vendors – Amazon University
 Expand & Grow!
    Unrelated Diversification
    Strategic Alliance with the University of Phoenix
    Teach Amazon Vendors how to be effective by offering
    Logistics, Customer Service, & Transactions




                                                         Jose
Current Organizational Structure
                             (Multidivisional Structure)
                                        Board of
                                        Directors


                                         Jeff Bezos
                 Corporate R&D          Founder and            Corporate HQs
                                            CEO                    Staff




                                             CEO
  CEO                   CEO                                       CEO                 CEO
                                           Business
Marketing             Operations                               Development           Editorial
                                          Expansion



  Advertising
Communications       Warehouse Ops.
   Strategic                            Business development     Software design,   Web site design
                     Customer Service
 Relationships                             New product &        development and     Editorial content
                      Special Orders
                                        service development       maintenance        Book features
                    Customer Programs




                                                                                     Krunal
Proposed Organizational Structure




                                    Krunal
Amazon Leadership
                    Principles
   Customer Obsession
   Ownership
   Invent and Simplify
   Are Right, A lot
   Hire and Develop the Best
   Insist on the Highest Standards
   Think Big
   Bias for Action
   Frugality
   Vocally Self Critical
   Earn Trust of Others
   Dive Deep
   Have Backbone; Disagree and Commit
   Deliver Results
What’s it like to work for
           Amazon?
 For a Senior Manager? Employee’s are treated as
  absolute equal in the work place.
 For an Engineer? It’s draining.
 For a Warehouse Employee? White Collar sweat shop




                                                    Farhaad
Amazon Culture Improvement
        Proposal
 A continuous seeking of the optimal balance between
  flexibility and control (Work-Life Balance)
 Responsibility and personal empowerment
 Commitment to one’s group, the company and to
  one’s fellow citizens




                                                Farhaad
Product Positioning Map




       Higher Quality




                          Lower Price




                                Alma
Product Positioning Map - Proposed




       Higher Quality




                               Lower Price




                                     Alma
What stage do you think the E-
commerce market is in?
Current Target Market

Shoppers
 Early Majority Internet shoppers
 College Students
 Price conscious shoppers
 Early adopters (kindle)
Sellers
 Third party retailers
 Online sellers
Developers
 Web developers




                                     Alma
New Target Market

Shoppers
 Late Majority and Laggard Internet Shoppers
 Early Majority Internet shoppers
 College Students
 Price conscious shoppers
 Early adopters (kindle)
Sellers
 Current Low Performing Sellers
 Third party retailers
 Online sellers
Developers
 Web developers
                                                Alma
Balanced Score Card

Area of Objectives                         Target            Target     Primary
                                                             Deadline   Responsibility
Growth                                     15% Increase      Q4 2014    Marketing
•Improve sales through Amazon              Service
certification incentive                    Revenue

Quality                                    85% positive      Q4 2012    Marketing/
•Reinforce to customers the customer-      survey                       Customer Support
driven vision

Innovation                                 Create            Q3 2013    Research &
•Provide an online certification program   curriculum with              Development/
for users                                  University of                Management
                                           Phoenix
Consumer Confidence                        75% of sellers    Q4 2014    Marketing
•Ensure customers that Amazon sellers      are certified
are certified and trustworthy




                                                                                    Jeremy
Balanced Score Card

Area of Objectives                         Target            Target     Primary
                                                             Deadline   Responsibility
Growth                                     15% Increase      Q4 2014    Marketing
•Improve sales through Amazon              Service
certification incentive                    Revenue

Quality                                    85% positive      Q4 2012    Marketing/
•Reinforce to customers the customer-      survey                       Customer Support
driven vision

Innovation                                 Create            Q3 2013    Research &
•Provide an online certification program   curriculum with              Development/
for users                                  University of                Management
                                           Phoenix
Consumer Confidence                        75% of sellers    Q4 2014    Marketing
•Ensure customers that Amazon sellers      are certified
are certified and trustworthy




                                                                                    Jeremy
Conclusion




             Jeremy
Q&A
References

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Amazon: Strategic Management

  • 1. Business 189 – Professor Shirley Presented By: Alma Rios, Jeremy lacsa, José R. Vigil, Farhaad Sheikh, Kunal Patel
  • 2. Agenda o Introduction o EFE Matrix o IFE Matrix o IE Matrix o SWOT Matrix o Quantitative Strategic Planning Matrix o Recommended Strategy o Organizational Structure o Organizational Culture o Product Positioning Map o Target Market o Strategy Evaluation Report Jeremy
  • 3. EFE Matrix Key External Factors Weight Rating Score Opportunities The number of buyers over the internet is 0.25 4.0 1.0 growing Forecasting increase in US ecommerce 0.2 4.0 0.9 Threats eBay, OverStock (NewEgg, CDW, etc) 0.35 4.0 1.4 Government regulations and instability on internet products and sales in international 0.05 1.0 0.05 economies. Low market entry barriers 0.15 2.0 0.3 Totals 1 3.65 Jeremy
  • 4. IFE Matrix Key Internal Factors Weight Rating Score Strengths Customer Relationship Management 0.18 3.0 0.6 Strong Focus on R&D 0.20 3.8 0.84 Diverse Products 0.13 2.5 0.375 Logistical advantage 0.15 4.0 0.76 Weaknesses High Debt Ratio 0.16 2.9 0.58 Risk of Introduction of Wrong New 0.09 1.9 0.19 Category Free Shipping affects bottom line 0.09 2.7 0.27 Total 1 3.615 Jeremy
  • 5. IE Matrix Strong Average Weak (3-4) (2.0-2.99) (1-1.99) High II III (3-4) Medium IV V VI (2.0-2.99) Low VII VIII IX (1-1.99) Jeremy
  • 6. SWOT Matrix Strengths - S Weaknesses - W 1. Customer Relationship 1. High Debt Ratio Management 2. Risk of Introducing a New Product 2. Strong Focus on R&D or Service 3. Diverse Products 3.Free Shipping affects bottom line 4. Logistical advantage Opportunities - O SO WO S4O2 - Use logistic advantage to O1,W3 - Leverage Amazon Prime 1. The number of buyers over the reach consumers in new countries subscriptions to absorb the cost of internet is growing S1, O1 - Increase human interaction free shipping. 2. Forecasting increase in US within the website. O1,W2 - Create an online school that ecommerce S1O2 - Provide a loyalty program to provides certifications provide an incentive to both new and existing members Threats - T ST WT S1T1 - Maintain a strong relationship to T1,W1 - Increase Bond offerings to 1. Growth potential of direct increase consumer loyalty. gain further lead over competitors. competitors (eBay, Overstock S2,T3 - Set up affiliates with mom and T1,W2 - Capitalize on Government Newegg, CDW, etc.) pop shops for brick and mortar in use of cloud services to form 2. Government regulations and store buying relationships. instability on internet products and sales in international economies. 3. Low market entry barriers Jose
  • 7. Quantitative Strategic Planning Matrix Establish a loyalty Increase human program to provide Create an online interaction within further incentive to school that provides the website. both new and existing certifications members Key Factor Weight AS TAS AS TAS AS TAS Strengths From IFE Customer Relationship Management 0.18 4.0 0.72 4.0 0.72 4.0 0.72 Strong Focus on R&D 0.20 2.0 0.40 2.75 0.55 4.0 0.80 Diverse Products 0.13 0.0 0.00 3.0 0.39 4.0 0.52 Logistical advantage 0.15 0.0 0.00 0.0 0.00 0.0 0.00 Weaknesses From IFE High Debt Ratio 0.16 0.0 0.00 0.0 0.00 1.0 0.16 Risk of Introduction of Wrong New 0.09 3.0 0.27 2.0 0.18 1.0 0.09 Category Free Shipping affects bottom line 0.09 2.0 0.18 2.3 0.21 1.0 0.09 Sum of Weights 1.00 1.57 2.05 2.38 Opportunities From EFE The number of buyers over the internet is 0.25 4.0 1.00 4.0 1.00 4.0 1.00 growing Forecasting increase in US ecommerce 0.20 4.0 0.80 4.0 0.80 3.0 0.60 Threats From EFE Growth potential of direct competitor 0.35 3.0 1.05 3.5 1.23 3.0 1.05 Government regulations and instability on internet products and sales in 0.05 1.0 0.05 1.0 0.05 2.5 0.13 international economies. Low market entry barriers 0.15 3.0 0.45 3.0 0.45 3.0 0.45 Sum of Weights 1.00 3.35 3.53 3.23 Sum of Total Attractiveness Score 2.46 2.79 Jose 2.80
  • 8. Final Recommended Strategy  Introduce Online Certification Course for Amazon Vendors – Amazon University  Expand & Grow!  Unrelated Diversification  Strategic Alliance with the University of Phoenix  Teach Amazon Vendors how to be effective by offering  Logistics, Customer Service, & Transactions Jose
  • 9. Current Organizational Structure (Multidivisional Structure) Board of Directors Jeff Bezos Corporate R&D Founder and Corporate HQs CEO Staff CEO CEO CEO CEO CEO Business Marketing Operations Development Editorial Expansion Advertising Communications Warehouse Ops. Strategic Business development Software design, Web site design Customer Service Relationships New product & development and Editorial content Special Orders service development maintenance Book features Customer Programs Krunal
  • 11. Amazon Leadership Principles  Customer Obsession  Ownership  Invent and Simplify  Are Right, A lot  Hire and Develop the Best  Insist on the Highest Standards  Think Big  Bias for Action  Frugality  Vocally Self Critical  Earn Trust of Others  Dive Deep  Have Backbone; Disagree and Commit  Deliver Results
  • 12. What’s it like to work for Amazon?  For a Senior Manager? Employee’s are treated as absolute equal in the work place.  For an Engineer? It’s draining.  For a Warehouse Employee? White Collar sweat shop Farhaad
  • 13. Amazon Culture Improvement Proposal  A continuous seeking of the optimal balance between flexibility and control (Work-Life Balance)  Responsibility and personal empowerment  Commitment to one’s group, the company and to one’s fellow citizens Farhaad
  • 14. Product Positioning Map Higher Quality Lower Price Alma
  • 15. Product Positioning Map - Proposed Higher Quality Lower Price Alma
  • 16. What stage do you think the E- commerce market is in?
  • 17. Current Target Market Shoppers  Early Majority Internet shoppers  College Students  Price conscious shoppers  Early adopters (kindle) Sellers  Third party retailers  Online sellers Developers  Web developers Alma
  • 18. New Target Market Shoppers  Late Majority and Laggard Internet Shoppers  Early Majority Internet shoppers  College Students  Price conscious shoppers  Early adopters (kindle) Sellers  Current Low Performing Sellers  Third party retailers  Online sellers Developers  Web developers Alma
  • 19. Balanced Score Card Area of Objectives Target Target Primary Deadline Responsibility Growth 15% Increase Q4 2014 Marketing •Improve sales through Amazon Service certification incentive Revenue Quality 85% positive Q4 2012 Marketing/ •Reinforce to customers the customer- survey Customer Support driven vision Innovation Create Q3 2013 Research & •Provide an online certification program curriculum with Development/ for users University of Management Phoenix Consumer Confidence 75% of sellers Q4 2014 Marketing •Ensure customers that Amazon sellers are certified are certified and trustworthy Jeremy
  • 20. Balanced Score Card Area of Objectives Target Target Primary Deadline Responsibility Growth 15% Increase Q4 2014 Marketing •Improve sales through Amazon Service certification incentive Revenue Quality 85% positive Q4 2012 Marketing/ •Reinforce to customers the customer- survey Customer Support driven vision Innovation Create Q3 2013 Research & •Provide an online certification program curriculum with Development/ for users University of Management Phoenix Consumer Confidence 75% of sellers Q4 2014 Marketing •Ensure customers that Amazon sellers are certified are certified and trustworthy Jeremy
  • 21. Conclusion Jeremy
  • 22. Q&A

Editor's Notes

  1. Growth -