The document discusses Amazon's business model and strategy. It provides an overview of Amazon's mission, values, and three customer sets. It then examines Amazon's attention on the attention economy and building e-trust. The document analyzes Amazon's business model evolution and use of the business model canvas. It discusses Amazon's eBook/Kindle business and strategies to diversify revenue streams through international expansion and acquisitions. The conclusion suggests Amazon's future opportunities are significant given its strategic focus on customers.

1. Virginia Rosales
Anabel Juárez
Jaime Millán
Vladimir Matovid
October 2010
Business Models: Themes and Issues

2. - from A to Z
Company Overview
Mission, Vision & Values
Core Value Proposition, Objective & Strategy
Three Customer Sets
Attention Economy and e-Trust
Business Model
Amazon.com Business Model Evolution
Business Model Canvas – The 9 Building Blocks
eBook/Kindle
Value Capture
Diversifying Revenue Streams
Geographical Expansion & Product Range
Amazon.com Acquisitions and Investments
Sales
Conclusion
Sky is the limit
References

3. - from A to Z
Company Overview
Mission, Vision & Values
Core Value Proposition, Objective & Strategy
Three Customer Sets
Attention Economy and e-Trust
Business Model
Amazon.com Business Model Evolution
Business Model Canvas – The 9 Building Blocks
eBook/Kindle
Value Capture
Diversifying Revenue Streams
Geographical Expansion & Product Range
Amazon.com Acquisitions and Investments
Sales
Conclusion
Sky is the limit
References

4. Company Overview
Founded in 1994 28,300 Global leader in
in Seattle, USA employees e-commerce
Worldwide
Wide range of Mass
network of
products customisation
fulfilment
Customer
Affiliations Stickiness
experience

5. Mission
• ‘To leverage technology and the expertise of our invaluable employees to
provide our customers with the best shopping experience on the Internet.’
Vision
• ‘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.’
Values
• Customer Obsession
• Innovation
• Bias for Action
• Ownership
• High Hiring Bar
• Frugality

6. Objective
• ‘Not to discount a small number of products for a limited period of time, but
to offer low prices everyday and apply them broadly across our entire
product range.’
Core Value Proposition
• Price
• Convenience
• Selection
Strategy
• ‘To ‘Get Big Fast’ by investing aggressively in new product categories and
new businesses, by spending money on brand awareness and getting new
customers.’

7. Strategy
Source: www.amazon.com

8. Three Customer Sets
Who want to
Consumers buy products
on Amazon
Who want to Who want to use
sell products Sellers Developers Amazon
developing
on Amazon services

9. - from A to Z
Company Overview
Mission, Vision & Values
Core Value Proposition, Objective & Strategy
Three Customer Sets
Attention Economy and e-Trust
Business Model
Amazon.com Business Model Evolution
Business Model Canvas – The 9 Building Blocks
eBook/Kindle
Value Capture
Diversifying Revenue Streams
Geographical Expansion & Product Range
Amazon.com Acquisitions and Investments
Sales
Conclusion
Sky is the limit
References

10. - from A to Z
Company Overview
Mission, Vision & Values
Core Value Proposition, Objective & Strategy
Three Customer Sets
Attention Economy and e-Trust
Business Model
Amazon.com Business Model Evolution
Business Model Canvas – The 9 Building Blocks
eBook/Kindle
Value Capture
Diversifying Revenue Streams
Geographical Expansion & Product Range
Amazon.com Acquisitions and Investments
Sales
Conclusion
Sky is the limit
References

11. How long do you stay @ ?
GOAL: Attention attraction and retention
Customer’s needs
Relevant Content
HOW? Frequent Update
Buying habits
Reactions to Web site design
Demographics
Favorite and least favorite products
Quality
Value
Timeliness
e-Trust
Appropriateness of Goods &
Brand Differentiation
Services
Customer Loyalty
Business Reputation
Security in Transactions

12. How long do you stay @ ?
Stickiness
Holds customers and keeps them coming back for more!
Measurement: *Time spent at a website
*Number of visits per person
*Number of pages viewed

13. Content
Products &
Services

14. Interactivity &
Production Values

15. Co-Creation &
Personalization Recognition
Customization
Ownership &
Belonging

16. Variety
2
Easy
Navigation
1
3
4
5
Speed & Delivery

17. - from A to Z
Company Overview
Mission, Vision & Values
Core Value Proposition, Objective & Strategy
Three Customer Sets
Attention Economy and e-Trust
Business Model
Amazon.com Business Model Evolution
Business Model Canvas – The 9 Building Blocks
eBook/Kindle
Value Capture
Diversifying Revenue Streams
Geographical Expansion & Product Range
Amazon.com Acquisitions and Investments
Sales
Conclusion
Sky is the limit
References

18. - from A to Z
Company Overview
Mission, Vision & Values
Core Value Proposition, Objective & Strategy
Three Customer Sets
Attention Economy and e-Trust
Business Model
Amazon.com Business Model Evolution
Business Model Canvas – The 9 Building Blocks
eBook/Kindle
Value Capture
Diversifying Revenue Streams
Geographical Expansion & Product Range
Amazon.com Acquisitions and Investments
Sales
Conclusion
Sky is the limit
References

19. Business Model Evolution
OnLine Book Retailing
Auctions & zShops
Marketplace
Partherships
&
Logistic Services
E-commerce
Platform/
Web Services
eBooks/Kindle

20. Business Model Canvas
9 building blocks
Customer Revenue Streams
Segment (CS) (R$)
Cost Key Resources
Structure(C$) (KR)
Customer Key Partnerships
Relationship (CR) (KP)
Key Activities
Channels (CH)
(KA)
Value
Proposition
(VP)

21. Business Model Canvas
Partnerships and eBooks/Kindle Provider
E-commerce Platform/Web Services
AuctionsRetailing
Online & zShops
Logistic Service
Marketplaces
AUTOMATED
LOGISTIC PARTNERS FULFILMENT & IT LOW PRICES GLOBAL MARKET
SERVICES & CO-
INFRASTRUCTURE CONVENIENCE (CONSUMERS)
CREATION
AFFILIATES DEVELOPMENT AND WIDE SELECTION
(CUSTOMISED ONLINE
(PUBLISHERS, AUTHORS, MAINTENANCE CUSTOMER EXPERIENCE
PROFILES & GLOBAL MARKET
BOOKSTORES…) RECOMMENDATIONS)
PRODUCT INTERMEDIATION (SELLERS &
DEVELOPMENT, AND SERVICES CONSUMERS)
PARTNERSHIPS &
PROMOTION ALLIANCES
SELLERS (COMPANIES
AGGREGATION OF & INDIVIDUALS)
HARDWARE DEMAND (LONGTAIL)
MANUFACTURERS
AMAZON.COM (& COMPANIES (ONLINE
FULFILMENT & TRADITIONAL
IT INFRASTRUCTURE, OVERSEAS SITES)
RETAILERS)
SOFTWARE &
COMPANIES (ONLINE EXPERTS MASS-CUSTOMISED AFFILIATES
& TRADITIONAL WEB SERVICES DEVELOPERS
RETAILERS) GLOBAL FULFILMENT LOGISTICS NETWORK
INFRASTRUCTURE PORTABLE DEVICE
APIs
MARKETING SALES MARGINS
TECHNOLOGY & CONTENT
FULFILMENT
COMMISSIONS

22. eBooks/Kindle
Amazon reported 80% of >450 000 books
eBook market available for
download
Kindle eBooks add 35% Newspapers,
to a physical book’s magazines and blogs
sale on Amazon subscription
eBooks downloaded Amazon keeps 65% of
from Amazon not the revenue from all
exclusive to Kindle eBook sales for Kindle
"Our vision is to have every book ever printed, in any language,
all available in tinder 60 seconds.“
- Jeff Bezos, Amazon.com CEO

23. Capture Value:
transforming earnings into profits
Cash
generative
Inventory cycle
turnover
Capital
efficiency
Maximize Profit Dollars,
Not Margins

24. - from A to Z
Company Overview
Mission, Vision & Values
Core Value Proposition, Objective & Strategy
Three Customer Sets
Attention Economy and e-Trust
Business Model
Amazon.com Business Model Evolution
Business Model Canvas – The 9 Building Blocks
eBook/Kindle
Value Capture
Diversifying Revenue Streams
Geographical Expansion & Product Range
Amazon.com Acquisitions and Investments
Sales
Conclusion
Sky is the limit
References

25. - from A to Z
Company Overview
Mission, Vision & Values
Core Value Proposition, Objective & Strategy
Three Customer Sets
Attention Economy and e-Trust
Business Model
Amazon.com Business Model Evolution
Business Model Canvas – The 9 Building Blocks
eBook/Kindle
Value Capture
Diversifying Revenue Streams
Geographical Expansion & Product Range
Amazon.com Acquisitions and Investments
Sales
Conclusion
Sky is the limit
References

26. Source: www.amazon.com

27. Source: www.meettheboss.com

28. Worldwide Sales Mix
Q1 ’04 – Net Sales $5,710 MM Q4 ’09– Net Sales $24,509 MM
2% 3%
z
22% 45%
76% 52%
Source: www.amazon.com
WW Media (Books, Music, Movies, Video Games and Consoles, Software
and Digital Downloads)
WW Electronics & Other General Merchendise (EGM)
WW Other (Marketing and Promotional Activities, Amazon Web Services,
Amazon Enterprise Solutions, & Co-branded Credit Cards)

29. International Sales
MM
$10,000
$8,938
$9,000
$8,000
$7,000 $6,740
$6,000 • 2008 International sales
47% of WW sales, up from
$5,000
45% in 2007
$4,000 • Shipments to over 200
$3,074
$3,000 countries
$2,000
$1,000
$0
2004 2005 2006 2007 2008
Source: www.amazon.com

30. - from A to Z
Company Overview
Mission, Vision & Values
Core Value Proposition, Objective & Strategy
Three Customer Sets
Attention Economy and e-Trust
Business Model
Amazon.com Business Model Evolution
Business Model Canvas – The 9 Building Blocks
eBook/Kindle
Value Capture
Diversifying Revenue Streams
Geographical Expansion & Product Range
Amazon.com Acquisitions and Investments
Sales
Conclusion
Sky is the limit
References

31. - from A to Z
Company Overview
Mission, Vision & Values
Core Value Proposition, Objective & Strategy
Three Customer Sets
Attention Economy and e-Trust
Business Model
Amazon.com Business Model Evolution
Business Model Canvas – The 9 Building Blocks
eBook/Kindle
Value Capture
Diversifying Revenue Streams
Geographical Expansion & Product Range
Amazon.com Acquisitions and Investments
Sales
Conclusion
Sky is the limit
References

32. Conclusion
• Logical path
• Resources &
Evolution
Channels
• B2C, B2B
• New markets
• Strength of Brand
Expansion
• “Earth’s biggest
selection”
• Community &
Stickiness
Attention
• Trust
Economy
• Customer
Experience

33. Sky is the limit

34. Thank you!

35. References
• Websites:
– www.amazon.com
– www.youtube.com
– www.charlierose.com
– www.meettheboss.com
– SOLOMON D. 2009. Questions for Jeffrey P. Bezos: Book Learning. Available at:http://www.nytimes.com/2009/12/06/magazine/06fob-q4-
t.html " [22.10.2010].
• Articles:
– 2006. From Niches to Riches: Anatomy of the Long Tail. MIT Sloan Management Review, 47, 67-71.
– 2008. Amazon.com: The Brink of Bankruptcy.
– ANTE, S. E. 2009. HOW AMAZON IS TURNING OPINIONS INTO GOLD. BusinessWeek, 047-048.
– DAVENPORT, T. H. & BECK, J. C. 2000. GETTING the ATTENTION You Need. Harvard Business Review, 78, 118-126.
– HOF, R. D. 2003. Reprogramming Amazon. BusinessWeek, 82-86.
– KIRBY, J. & STEWART, T. A. 2007. The Institutional YES. (cover story). Harvard Business School Publication Corp.
– MUDAMBI, S. M. & SCHUFF, D. 2010. WHAT MAKES A HELPFUL ONLINE REVIEW? A STUDY OF CUSTOMER REVIEWS ON AMAZON.COM. MIS
Quarterly, 34, 185-200.
– O'BRIEN, J. M. & SHAMBORA, J. 2009. AMAZON'S NEXT REVOLUTION. (cover story). Fortune, 159, 68-76.
– PENENBERG, A. L. 2009. The Evolution of Amazon. (cover story). Fast Company, 66-74.
– TONKERY, D. 2010. Amazon Versus Ebook Publishers. Searcher, 18, 41-43.
– ZMUDA, N. 2009. AMAZON SAYS 'I DO' TO ZAPPOS. NOW WHAT? Advertising Age, 80, 4-4.
• Books:
– DAVENPORT, T. and BECK, J., 2001. The Attention Economy, Understanding the New Currency of Business. 1st ed. United States of America:
Harvard Business School Press
– DEMAIO, H., 2001. B2B and Beyond, New Business Models Built on Trust. 1st ed. United States of America: John Wiley & Sons
– OSTERWALDER A. and PIGNEUR Y., 2010. Business Model Generation, Hoboken: John Wiley & Sons
– SPECTOR, R., 2000. Amazon.com: Get Big Fast. London: Random House Business Books