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Amazon's 5 Stages of Market evolution: Deeply Understand the Business Model of the World's Largest Online Retailer

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Amazon.com is one of the world's most successful online companies. However, Amazon's investments are so diversified that one has difficulty figuring out what business Amazon is in. The above presentation sheds light on the evolution of Amazon's business model using the theory of the 5 Stages of Market Evolution.

Published in: Business

Amazon's 5 Stages of Market evolution: Deeply Understand the Business Model of the World's Largest Online Retailer

  1. 1. Amazon’s  5  Stages  of  Market  Evolu7on       Simply  Visualize  Pa/erns  in  the  Evolu7on  of  Mul7-­‐sided  Business  Models   Register  at  www.visionaryd.com  to  learn  more  about  Business  Model  Engineering.     Lean  Startup  Coach.  Dr.  Rod  King.  rodkuhnhking@gmail.com  &  h/p://businessmodels.ning.com  &  h/p://twi/er.com/RodKuhnKing   ORPHAN   (Stone)   Pa/ern   CHAIN   (Linear/Pipe)   Pa/ern   TREE   (Hierarchical/V-­‐)   Pa/ern   TRIANGLE   (Network)   Pa/ern   WEB   (Network)   Pa/ern   No  Market   1-­‐Sided  Market   2-­‐Sided  Market   2-­‐Sided  Market   Mul7-­‐sided  Market                 1st  Wave   q Bookseller   2nd  Wave   q Online  Shopping   q Affiliates/Alliance  Program   q Auc7oning  PlaRorm   q Reseller  Service   q Web  Services   3rd  Wave   q Web  Storage  Services   q Online  Streaming  Services:   Music;  Video   q Manufacturer  of  Consumer   Electronics,  e.g.,  Kindle   Cadabra.com   Buyers   Buyers/Users   Amazon.com  Amazon.com   Big  Box   Retailers   Buyers/Users   (Online  Shoppers;   Cloud-­‐based  Companies)   Affiliates/Auc7oners/ Cloud-­‐based  Businesses     Amazon.com   Buyers   (Book  buyers)   Affiliates/Auc7oners   Affiliates/ Alliances   Amazon.com  
  2. 2. Amazon.com  Business  Model  Strip     Rapidly  Document,  Analyze,  Prototype,  and  Design  Business  Model  Engines  for  CUSTOMER  GROWTH  ENGINEERING   BUSINESS  MODEL     REVENUE  MODEL   Business  Model  (Strip):  Customer  Growth  Engine   Job  To  Get  Done   (JTGD)   Product  (Asset)  Sale;  Ad;   Subscrip7on;  Service  -­‐   Model     Amazon.com     •  Founded:  1994  (Cadabra)   •  Tagline/Value   Proposi7on:                “Earth’s  most  customer-­‐                centric  company”     •  Industry/Product:  Online   Shopping;  Web  Hos7ng;   Content  Distribu7on       •  Compe7tors:  Barnes  &   Noble;  BestBuy;  NeRlix;   Apple;  Google;  Wal-­‐Mart;   Citrix  Systems;  ...           Amazon.com   “Our  vision  is  to  be  earth's   most  customer  centric   company;  to  build  a  place   where  people  can  come  to  find   and  discover  anything  they   might  want  to  buy  online.”     Business  Model  Engine   (Blue  Ocean  Strategy):   Low  Cost  &  High  Quality     Buyers/Users  (Consumers)   q Simply  obtain  goods/service   from  trustworthy  seller     3rd  Party   q Obtain  more  customers   q Obtain  inexpensive  service     Big  Box  Retailers   q Make  more  profit  in  selling   (products  such  as  Kindle)        Amazon.com                (Online  Commerce/Web  Hos7ng:   MulQ-­‐sided  PlaRorm)   Big  Box  Retailers   Buyers/   Users   3rd  Party   (Developers;   Resellers;   Affiliates)   Register  at  www.visionaryd.com  to  learn  more  about  Business  Model  Engineering.     Lean  Startup  Coach.  Dr.  Rod  King.  rodkuhnhking@gmail.com  &  h/p://businessmodels.ning.com  &  h/p://twi/er.com/RodKuhnKing  
  3. 3. Amazon’s  5  Stages  of  Market  Evolu7on       Simply  Visualize  Pa/erns  in  the  Evolu7on  of  Mul7-­‐sided  Business  Models   Register  at  www.visionaryd.com  to  learn  more  about  Business  Model  Engineering.     Lean  Startup  Coach.  Dr.  Rod  King.  rodkuhnhking@gmail.com  &  h/p://businessmodels.ning.com  &  h/p://twi/er.com/RodKuhnKing   ORPHAN   (Stone)   Pa/ern   CHAIN   (Linear/Pipe)   Pa/ern   TREE   (Hierarchical/V-­‐)   Pa/ern   TRIANGLE   (Network)   Pa/ern   WEB   (Network)   Pa/ern   No  Market   1-­‐Sided  Market   2-­‐Sided  Market   2-­‐Sided  Market   Mul7-­‐sided  Market                 1st  Wave   q Bookseller   2nd  Wave   q Online  Shopping   q Affiliates/Alliance  Program   q Auc7oning  PlaRorm   q Reseller  Service   q Web  Services   3rd  Wave   q Web  Storage  Services   q Online  Streaming  Services:   Music;  Video   q Manufacturer  of  Consumer   Electronics,  e.g.,  Kindle   Cadabra.com   Buyers   Buyers/Users   Amazon.com  Amazon.com   Big  Box   Retailers   Buyers/Users   (Online  Shoppers;   Cloud-­‐based  Companies)   Affiliates/Auc7oners/ Cloud-­‐based  Businesses     Amazon.com   Buyers   (Book  buyers)   Affiliates/Auc7oners   Affiliates/ Alliances   Amazon.com   BUMP   BUMP   BUMP   BUMP  (BUMP:   Big  Urgent     Market  Problem)  
  4. 4. “0-­‐1-­‐N”  Evolu7onary  Cycle  for  Online  Shopping  and  Other  Industries     Cycle  of  CentralizaQon-­‐DecentralizaQon-­‐MiniaturizaQon   Register  at  www.visionaryd.com  to  learn  more  about  Business  Model  Stripping.     Lean  Startup  Coach.  Dr.  Rod  King.  rodkuhnhking@gmail.com  &  h/p://businessmodels.ning.com  &  h/p://twi/er.com/RodKuhnKing   NOTHING:   0-­‐System   SOMETHING:   1-­‐System   MANY:   N-­‐System   Centraliza7on   (CreaQon;“Big  Bang”;   InvenQon)   Decentraliza7on   (Divergence;   MulQplicaQon)   Miniaturiza7on   (Singularity;  “Big  Crunch”;   Convergence”)   “0-­‐1-­‐N”     Evolu7onary   Cycle  

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