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Key Strategic Challenges Being Faced in 2018
• Amazon is an American electronic commerce and cloud
computing company based in Seattle, Washington.
• It is the largest Internet retailer in the world as measured
by revenue and market capitalization.
• Google blocking YouTube on Amazon devices
• Low-cost ecommerce alternatives
• Fragmentation
COMPANY HISTORY
Amazon was Founded
1994
Expand Beyound Books
1998
Amazon Kindle
2007
Kindle e-book Outsell Hardcover
Books
2010
Open its First Physical Store
2015
Acquire Wholefood
2017
VISION
To be Earth’s most customer-centric company,
where customers can find and discover
anything they might want to buy online.
MISSION
We strive to offer our customers the lowest
possible prices, the best available selection,
and the utmost convenience.
INDUSTRY ANALYSIS-eCommerce
Media Segment
• Bargaining power of buyers: Medium to High
○ Customers has sufficient information when searching for products online
• Threat of substitute products: High
○ People can also buy from the physical retailers
• Threat of new entrants: Low
○ To build a brand like Amazon is very difficult
• Rivalry in the industry: High
○ Some big non US brands have entered the US market
• EBay
• Netflix
• Apple(iTunes)
• Google
Competitors
Brick and
Mortar
Retailers
• Best Buy
• Walmart
• Costco
Online
• Alibaba
S W
O T
TRENGTHS EAKNESSES
PPORTUNITIES
• Backward Integration
• Global Expansion
• Opening Physical Stores
Outside U.S
HREATS
• Customer Centric
• Cost Leadership
• Efficient Delivery Network
• High Debt
• Shrinking Margins
• Product Flops
• Low Entry Barriers
• Online Security
• Local Competition
FINANCIAL
Particulars
Company Name
2016 2017 Change
Revenue
(thousands)
$135,987 $177,866 30.80%
Gross Income
(thousands)
$47,722 $65,932 38.16%
Net Income
(thousands)
$2,371 $3,033 27.92%
Current Ratio 1.045 1.04 -0.48%
D/E Ratio 0.399 0.893 123.81%
EPS 4.9 6.15 25.51%
Inventory
Turnover
7.7013 6.975 -9.43%
7
KEY STRATEGIC CHALLENGES
• Slow International Sales
• Intense Competition and Price War
• Increasing Loss in Overseas Market
8
1
Focus on India Market:
Relatively small but has been one of the fastest
growing e-commerce markets
2
Build more Brick-and-Mortor
Stores Oversea:
70% of Global Shopper Still Prefer
Brick-and-Mortor Retail Store
3
Increase Marketing Spending:
Capturing Market Share and Improve Reputation
in International Market
ALTERNATIVES
RECOMMENDATION:
Focus on India Market
● Understanding the Customers in India
○ Researching about the purchasing preference and habits
● Localizing Products, Services, and Prices
○ Adapting content for customer culture, language, and
etiquette
Short
Term
● Partnering up with Local Business
○ Better local knowledge base
● Expanding Logistics
○ Expanding its infrastructure and delivery network to
improve the customer experience
Mid
Term
● Adapting Artificial Intelligence
○ Managing Growing Dadabase in India
● Investing in Indian Retail Firms and e-commerce
companies
● Physical Stores
Long
Term
References
https://www.cheshnotes.com/five-forces-analysis-of-amazon-inc/
https://en.wikipedia.org/wiki/E-commerce
https://www.nasdaq.com/symbol/amzn/financials?query=balance-she
et

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Amazon Business Strategy Analysis

  • 1. Key Strategic Challenges Being Faced in 2018 • Amazon is an American electronic commerce and cloud computing company based in Seattle, Washington. • It is the largest Internet retailer in the world as measured by revenue and market capitalization. • Google blocking YouTube on Amazon devices • Low-cost ecommerce alternatives • Fragmentation
  • 2. COMPANY HISTORY Amazon was Founded 1994 Expand Beyound Books 1998 Amazon Kindle 2007 Kindle e-book Outsell Hardcover Books 2010 Open its First Physical Store 2015 Acquire Wholefood 2017
  • 3. VISION To be Earth’s most customer-centric company, where customers can find and discover anything they might want to buy online. MISSION We strive to offer our customers the lowest possible prices, the best available selection, and the utmost convenience.
  • 4. INDUSTRY ANALYSIS-eCommerce Media Segment • Bargaining power of buyers: Medium to High ○ Customers has sufficient information when searching for products online • Threat of substitute products: High ○ People can also buy from the physical retailers • Threat of new entrants: Low ○ To build a brand like Amazon is very difficult • Rivalry in the industry: High ○ Some big non US brands have entered the US market • EBay • Netflix • Apple(iTunes) • Google Competitors Brick and Mortar Retailers • Best Buy • Walmart • Costco Online • Alibaba
  • 5. S W O T TRENGTHS EAKNESSES PPORTUNITIES • Backward Integration • Global Expansion • Opening Physical Stores Outside U.S HREATS • Customer Centric • Cost Leadership • Efficient Delivery Network • High Debt • Shrinking Margins • Product Flops • Low Entry Barriers • Online Security • Local Competition
  • 6. FINANCIAL Particulars Company Name 2016 2017 Change Revenue (thousands) $135,987 $177,866 30.80% Gross Income (thousands) $47,722 $65,932 38.16% Net Income (thousands) $2,371 $3,033 27.92% Current Ratio 1.045 1.04 -0.48% D/E Ratio 0.399 0.893 123.81% EPS 4.9 6.15 25.51% Inventory Turnover 7.7013 6.975 -9.43%
  • 7. 7 KEY STRATEGIC CHALLENGES • Slow International Sales • Intense Competition and Price War • Increasing Loss in Overseas Market
  • 8. 8 1 Focus on India Market: Relatively small but has been one of the fastest growing e-commerce markets 2 Build more Brick-and-Mortor Stores Oversea: 70% of Global Shopper Still Prefer Brick-and-Mortor Retail Store 3 Increase Marketing Spending: Capturing Market Share and Improve Reputation in International Market ALTERNATIVES
  • 9. RECOMMENDATION: Focus on India Market ● Understanding the Customers in India ○ Researching about the purchasing preference and habits ● Localizing Products, Services, and Prices ○ Adapting content for customer culture, language, and etiquette Short Term ● Partnering up with Local Business ○ Better local knowledge base ● Expanding Logistics ○ Expanding its infrastructure and delivery network to improve the customer experience Mid Term ● Adapting Artificial Intelligence ○ Managing Growing Dadabase in India ● Investing in Indian Retail Firms and e-commerce companies ● Physical Stores Long Term
  • 10.