Amazon.com Business Model

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Research on Amazon.com for a University Project.

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Amazon.com Business Model

  1. 1. Contents…!- Company Overview- Business Model- Additional Material: Articles
  2. 2. Early Beginnings…! Amazon.com
sells
lots
and
lots
of
stuff!• Amazon
was
founded
in
1995!• Jeffrey
Preston
"Jeff"
Bezos
is
the
Chairman
of
Amazon.com! You
can
GET
Anything
&
 Everything
at
Amazon.com! SO
WHAT
DOES
AMAZON.COM
 SELL?!
  3. 3. Founded
in
1994
SeaDle,
 2005:
Pinzon
 USA 2006:
Voted
No.1
 In
Customer
 1999:
Amazon
 Service
 2010:Amazon
 AucKon,
Zshops
 Studios
 2000:
Amazon
 2011:
 Marketplace
 2007:
 Amazon
Appstore
 Amazon
MP3
 Amazon
Cloud
Player
 Amazon
Fresh
 Kindle
Touch
 2008:
Film
 Went
Public
 ProducKon,
Amazon
 in
1997 Currency
Converter

  4. 4. 1.)
Amazon’s
Business
Model
  5. 5. 1.)
Value
Chain
Analysis FIRM
INFRASTRUCTURE:
Central
Customer
Data
Warehouse GINHR
MANAGEMENT:
Employee
Unique
BenefitsTECHNOLOGY
DEVELOPMENT:
High
Investments,
Unknown
 AROpportuniKes,
Hardware
from
HP MPROCUREMENT:
Using
SBU:
BookSurge,
DistribuKon
Centers INBOUND
 OPERATIONS
 OUTBOUND
 MARKETING

 N LOGISTICS
 Good
 LOGISTICS
 &
SALES
 SERVICE
 RGI Return
 Payment
 Close
 Discounts,
unsold
items
 System,
24
 Proximity
to
 Return
 Recommen to
supplier,
 hour
 Motorways,
 Policy,
Price
 MA daKons,

 Warehouse
 Reach
for
 collect
 InteracKve
 Comparison customer
 OperaKon
 Specific
 shipping info.
 locaKons
  6. 6. Business Foundation and Model!Amazon.com
uses
a
mulK‐leveled
e‐commerce
strategy

  7. 7. 2.)
CompeKKve
Analysis DIRECT
COMPETITORS• EBay
• Barnes
&
Noble

  8. 8. 2.)
CompeKKve
Analysis INDIRECT
COMPETITORS• GAP
• L.L.Bean
• Google.com

  9. 9. E-Retailing Strategic Group Analysis!
  10. 10. 2.)
CompeKKve
Analysis COMPETITIVE
STRATEGY• “Earths
Biggest
SelecKon”
• Daily
AucKons
• Bullet
Proof
Customer
Service
• SynergisKc
Effect
of…
 1.  Shopping Convenience 2.  Ease Of Purchase 3.  Speed 4.  Decision Enabling Information 5.  Wide Selection 6.  Discounted Price 7.  Reliability of Order Fulfillment
  11. 11. 2.)
CompeKKve
Analysis
  12. 12. 3.)
Growth
Strategies BUSINESS
MODEL• Virtuous
Cycle
• $14
Billion
Retail
Machine
• Direct‐to‐consumer
Online
Model
• Reap
Benefits
of
Technology
Expansion
• Category
Expansion
• InternaKonal
Expansion

  13. 13. 4.)
Market
Segments SEGMENTATION• Based
on
Actual
Purchase
Behavior
• Each
new
purchase
slightly
alters
recommendaKons
• CollaboraKve
Filtering
• Seller
Customers:
1.3
million
acKve
customers
• Developer
Customers:
Use
Amazon
Web
Services
• Loyalty
Program:
Amazon
Prime
(Fee
Based)

  14. 14. 5.)
Value
ProposiKonConvenience
 Price
 
 
 SYNERGISTIC
 EFFECT SelecHon
 Customer
Service
 
 
 
 
 
 
 

  15. 15. What
makes
Amazon
a
Giant
is
in
the
Details? Customize
Buyer’s
 Cookies Experience Customer
Tracking Personal
Shopper
  16. 16. 4.)
Value
ProposiKon CUSTOMER
VALUE• RecommendaKons:
Regular,
Gim
Giving
• Community:
Listmania
• Individual
Sellers


‐
Amazon
Marketplace


‐
Amazon
zshops


‐
Amazon
AucKons

  17. 17. Amazon’s Gold Box! Time‐sensiHve
discounts.
ANer
a
specified
period
of
 availability
the
offer
disappears.

  18. 18. 6.)
Revenue
Model REVENUE• Online
Bookstore
to
Online
Shopping
• Amazon
Marketplace:
fixed
price
online
marketplace
• 64%
revenue
from
books,
music
video
• Amazon
Advantage:
10‐15%
of
Sales
• Affiliate
Partnership
MarkeKng



‐
Amazon
pays
commission
to
site
owner
• NegaKve
operaKng
cash
flow
cycle




‐
Amazon
is
paid
by
customers





before
it
needs
to
pay
suppliers

  19. 19. Article 1! Amazon
may
benefit
as
digital
goods
 sales
jump • Fastest
growing
category
this
holiday
season
 • Kindle
Fire
Tablet
‐
$199
 • Aggressive
pricing
–
Volume
Sales
 • Increasing
availability
of
devices
 • Increasing
Downloads
 • Trend
expected
to
rise
in
2012


  20. 20. Article 2 ! Amazon’s
AWS
Storage
Gateway
to
 connect
with
Cloud • Amazon
Web
Services
announced
the
 Gateway
for
reliable
&
Cost
–effecKve
Storage
 on
the
AWS
Cloud
 • Amazon
ElasKc
Compute
Cloud:
For
 addiKonal
capacity
during
peak
periods
 • Will
reduce
cost
of
data
storage
and
 compuKng
infrastructure


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