Amazon Case

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Amazon Case

  1. 1. Amazon.com INC Presented to: Mr. Zaffar Manan
  2. 2. Amazon.com <ul><li>Earths Biggest Book Store </li></ul><ul><li>CEO and Founder Jeff Bezos </li></ul><ul><li>Internet based companies (Yahoo, Google) </li></ul><ul><li>Named After the mightiest river in the world </li></ul><ul><li>Fast Becoming worlds Biggest anything Store </li></ul>
  3. 4. Internal Factors
  4. 5. Strengths <ul><li>Large customer database. </li></ul><ul><li>Worlds Biggest Book Store. </li></ul><ul><li>Efficient Web Browsing. </li></ul><ul><li>Amazon has proven themselves to be the most successful retailer online. </li></ul><ul><li>Enables customers to compare prices across different products being sold by amazon. </li></ul><ul><li>Product Offering is easily understandable. </li></ul><ul><li>Customized home pages for website Members. </li></ul><ul><li>Effective promotions and advertisements. </li></ul><ul><li>Expansion has propelled Amazon.com in innumerable directions. </li></ul>
  5. 6. Weaknesses <ul><li>Lack of business skills in all products being sold . </li></ul><ul><li>Purchasing items from distributors rather than manufacturers. </li></ul><ul><li>A huge need of adding values to the online shopping experience (aesthetics needs). </li></ul><ul><li>More browsers than buyers. </li></ul><ul><li>Fear of competition is high as there are low barriers to market entry. </li></ul>
  6. 7. External Factors
  7. 8. Opportunities <ul><li>Market size is growing. </li></ul><ul><li>More things can be easily sold on the internet. </li></ul><ul><li>More people are willing to buy online. </li></ul><ul><li>Number of women internet users are growing. </li></ul><ul><li>Increasing availability of other access channels is providing more opportunities for customers to shop online. </li></ul><ul><li>Increase in acceptance of E-Commerce. </li></ul><ul><li>Growth in consumer to consumer auctions. </li></ul>
  8. 9. Threats <ul><li>High competition from direct and indirect sources. </li></ul><ul><li>New entry barriers in the industry. </li></ul><ul><li>High Taxation possibilities </li></ul><ul><li>Customer might shop at partner's website for the next purchase after the first shopping at Amazon. </li></ul><ul><li>Threat that retailers will draw back the partnership at the end of the alliance agreement. </li></ul><ul><li>Some retailers may get jealous if Amazon promotes one company more than another. </li></ul><ul><li>Customers still prefer try-and-buy shopping habits for clothing. </li></ul>
  9. 10. TWOS Strategy
  10. 11. WT strategies ST strategies T H R E A T WO strategies SO strategies O P P O R T U N I T Y WEAKNESS STRENGTHS
  11. 12. Internal Factor Evaluation Matrix IFE Matrix
  12. 13. IFE Strengths .20 4 .05 Effective promotions and advertisements. 8 .15 3 . 05 Expansion has propelled Amazon.com in innumerable directions. 9 2.00 .55 .15 3 .05 Customized home pages for website Members. 7 .15 3 .05 Product Offering is easily understandable. 6 .20 4 .05 Enables customers to compare prices across different products being sold by Amazon 5 .15 3 .05 Amazon has proven themselves to be the most successful retailer online 4 .20 4 .05 Efficient Web Browsing 3 .40 4 .10 Worlds Biggest Book Store 2 .40 4 .10 Large customer database. 1 Strengths TWS Rated Weighted INTERNAL FACTORS
  13. 14. IFE Weakness .65 .45 2.65 1.00 TOTAL (ST + WK) .20 1 .05 Fear of competition is high as there are low barriers to market entry 5 .10 2 .05 More browsers than buyers 4 .20 2 .10 A huge need of adding values to the online shopping experience (aesthetics needs). 3 .05 1 .05 Purchasing items from distributors rather than manufacturers 2 .10 2 .05 Lack of business skills in all products being sold 1 Weakness TWS Rated Weighted INTERNAL FACTORS
  14. 15. External Factor Evaluation Matrix EFE Matrix
  15. 16. EFE Strengths .55 .15 .05 Growth in consumer to consumer auctions 7 .15 .05 Increase in acceptance of E-Commerce 6 .20 .05 Increasing availability of other access channels is providing more opportunities for customers to shop online 5 .15 .05 Number of women internet users are growing 4 .20 .05 More people are willing to buy online 3 .40 .15 More things can be easily sold on the internet 2 .40 .10 Market size is growing. 1 Opportunities TWS Rated Weighted EXTERNAL FACTORS
  16. 17. EFE Weakness . Some retailers may get jealous if Amazon promotes one company more than another 6 Customers still prefer try-and-buy shopping habits for clothing 7 .65 .45 2.65 1.00 TOTAL (ST + WK) .40 2 .20 Threat that retailers will draw back the partnership at the end of the alliance agreement 5 .10 2 .05 Customer might shop at partner's website for the next purchase after the first shopping at Amazon 4 .20 2 .10 High Taxation possibilities 3 .05 1 .05 New entry barriers in the industry 2 .10 2 .05 High competition from direct and indirect sources 1 Threats TWS Rated Weighted EXTERNAL FACTORS
  17. 18. Strategic position and Action Evaluation Matrix SPACE Matrix
  18. 19. SPACE MATRIX: 5 Average 35 Total 4 5 4 5 6 6 5 FINANCIAL STRENGTHS
  19. 20. SPACE MATRIX: -2.33 Average -14 Total -2 -1 -1 -4 -5 -1 RATES COMPETITIVE ANALYSIS
  20. 21. SPACE MATRIX: -3.20 Average - 16 Total <ul><li>2 </li></ul><ul><li>3 </li></ul><ul><li>3 </li></ul><ul><li>4 </li></ul>- 4 RATES ENVIRONMENTAL STABILITY
  21. 22. SPACE MATRIX: 3.80 Average 19 Total 2 4 4 5 4 RATES INDUSTRY STRENGTH
  22. 23. SPACE MATRIX: <ul><li>X-Axis : </li></ul><ul><ul><ul><li>IS + (-CA) </li></ul></ul></ul><ul><ul><ul><li>= 3.8 + (-2.33) </li></ul></ul></ul><ul><ul><ul><li>= 1.47 </li></ul></ul></ul><ul><li>Y-Axis : </li></ul><ul><ul><ul><li>FS + (-ES) </li></ul></ul></ul><ul><ul><ul><li>= 5.0 + (-3.20) </li></ul></ul></ul><ul><ul><ul><li>= 1.80 </li></ul></ul></ul>
  23. 24. SPACE MATRIX I S C A F S E S Aggressive
  24. 25. SPACE Matrix: <ul><li>STRATEGIES TO BE PURSUED </li></ul><ul><ul><li>Intensive Strategies </li></ul></ul><ul><ul><li>Integrative Strategies </li></ul></ul><ul><ul><li>Conglomerate Diversification </li></ul></ul><ul><ul><li>Concentric Diversification </li></ul></ul><ul><ul><li>Horizontal Diversification </li></ul></ul><ul><ul><li>Combination </li></ul></ul>
  25. 26. Amazon Growth Source : www.iwishiknew.com 15.4% 1-Year Employee Growth 9,000 2004 Employees 1,567.1% 1-Year Net Income Growth $588.5 2004 Net Income (mil.) 31.5% 1-Year Sales Growth $6,921.1 2004 Sales (mil.) December Fiscal Year-End
  26. 27. Boston Consulting Group Matrix BCG Matrix
  27. 28. BCG Matrix Growth Rate Relative Market Share Low 0.0 High 1.0 Medium 0.5 High +20 Low -20 Medium 0 Question Mark “?” Star “*” Cash Cows Dogs
  28. 29. Grand Strategy Matrix
  29. 30. Grand Strategy Matrix Rapid Market Growth Quadrant II Quadrant I Weak Strong Competitive Competitive Position Position Quadrant III Quadrant IV Slow Market Growth
  30. 31. Strategies From Grand Strategy Matrix <ul><li>Market Development </li></ul><ul><li>Market Penetration </li></ul><ul><li>Product Development </li></ul><ul><li>Forward Integration </li></ul><ul><li>Backward Integration </li></ul><ul><li>Horizontal Integration </li></ul><ul><li>Concentric Diversification </li></ul>
  31. 32. IE Matrix
  32. 33. IE MATRIX: 2.2 1.8 Others 2.65 Amazon.com EFE IFE DIVISIONS
  33. 34. 1.0 1.0 2.0 2.0 3.0 3.0 4.0 LOW WEAK MEDIUM HIGH AVERAGE STRONG EFE SCORES IFE SCORES Build & Grow IE - Matrix
  34. 35. Quantitative Strategic Planning Matrix
  35. 36. CP Matrix

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