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- 1. EMRAH KÜÇÜKÖZ BAHÇEŞEHİR ÜNİVERSİTESİ EXECUTIVEMBA Industry 4.0 & Digital Transformation www.linkedin.com/in/emrahkucukoz
- 2. REAL TIME NETWORTH $153.7B as of 5/18/19 2019 BILLIONAIRES NET WORTH $131B as of 3/4/19 •Jeff Bezos founded e-commerce colossus Amazon in 1994 out of his garage in Seattle. He remains CEO and owns a 16% stake. •He and his wife, MacKenzie, who are divorcing after 25 years of marriage, announced in April that he will transfer 4% of Amazon to her. •When the divorce goes through, likely in July, MacKenzie will get tens of billions worth of Amazon stock, making her one of the world's richest women. •In 2018, Amazon pulled in $230 billion in revenues and a record $10 billion in net profit, up from $3 billion the prior year. •In February, Amazon announced it was canceling plans for a second headquarters in Long Island City, New York after local lawmakers opposed the plan. •Bezos owns The Washington Post and Blue Origin, an aerospace company that is developing a rocket for commercial use. #1 Jeff Bezos & family CEO and Founder, Amazon www.linkedin.com/in/emrahkucukoz
- 3. Founded by JeffBezos • Amazon Group Companies • Amazon.com, Inc. • Amazon.com Services, Inc. • Amazon Advertising LLC • Amazon Digital Services LLC • Amazon Services LLC • Amazon Web Services, Inc. • Audible, Inc. • Company History • 1994 - Amazon was Founded • 1998 - Expand Beyound Books • 2007 - Amazon Kindle • 2010 - Kindle e-book Outsell Hardcover Books • 2015 - Open its First Physical Store • 2017 - Acquire Wholefood www.linkedin.com/in/emrahkucukoz
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- 5. To be Earth’smost 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. VISION MISSION STRENGTHS • Customer Centric • Cost Leadership • Strong IT system • Efficient Delivery Network •Brand image • Millenials • Agile, fast decision-execution OPPORTUNITIES • Backward Integration • Global Expansion • Opening Physical Stores Outside U.S WEAKNESSES • High Debt • Shrinking Margins • Product Flops •Lose Focus THREATS • Low Entry Barriers • Online Security • Local Competition • Google blocking YouTube on Amazon devices • Asian Countries regulations, Red tapes • Ebook EU Publishers • Low-cost ecommerce alternatives • Fragmentation "much of what we do with machine learning happens beneath the surface. Machine learning drives our algorithms for demand forecasting, product search ranking, product and deals recommendations, merchandising placements, fraud detection, translations, and much more. Though less visible, much of the impact of machine learning will be of this type – quietly but meaningfully improving core operations". www.linkedin.com/in/emrahkucukoz
- 6. • Five ForcesAnalysis of Amazon Inc. • Here is a porter’s five forces analysis of Amazon that discusses how the various forces are shaping competition in the retail industry and what is Amazon’s position with regard to these forces. The five forces model was developed by Michael E Porter. It is a well-known analytical model that can be used to analyse the level of competition and the forces that are affecting competition in the industry. The model is sued widely across the industry for the purpose of strategy formulation. • Bargaining power of Amazon suppliers: • Health and safety in production areas and any living quarters, The right to legal wages and benefits, Appropriate working hours and overtime pay, Prevention of child labor or forced labor, Fair and ethical treatment, including non-discrimination • Bargaining power of buyers: • The bargaining power of buyers at Amazon is medium to high. Amazon focuses a lot on customer satisfaction and product quality. Switching costs for the customers are low and the number of Amazon competitors has grown in these years. Physical retail is also creating pressures. Every customer has sufficient information when searching for products online and can make his choice based on the available information. It is why customer retention remains an important focus area for the e- retailer. The bargaining power of Amazon buyers is high. • Threat of substitute products: • The threat of substitute products for Amazon is high. While a number of other brands have also entered online retail, people can also buy from the physical retailers. The only major competitive advantage of Amazon is its excellent customer service apart from its brand name. The customers can easily switch from one brand to another. • Threat of new entrants: • The threat of new entrants is low for Amazon. It is because the proliferation of digital technology has brought several changes to the retail industry. A number of new brands have entered e-retail. Now it is easier to build an e-retail business model with the available technological resources. From Alibaba to Flipkart and e-bay several national and international brands have emerged that are competing with Amazon. Growth in digital technology has reduced the barriers to entry. However, to build a brand like Amazon is very difficult because of the marketing and other expenses. Not just this, the problem is that there are other strategic factors too which would require the kind of dedication that Jeff Bezos has showed to build a brand. • Rivalry in the industry: • The level of rivalry in the industry is high because the number of players in e-retail has grown and there is also immense competition from the traditional retail brands. Walmart and Costco are important competitors of the e-retail giant. Rivalry also gets intensified in the retail industry by several other factors. It is not just the big brands, but also the small brands that are fighting for market share and creating competitive pressure. Some big non US brands have entered the US market and some more and planning to enter and expand their presence fast. So, how the level of competition will continue to increase for Amazon is not unimaginable. www.linkedin.com/in/emrahkucukoz
- 7. Focus Products • Recommendationalgorithms – with AI • Amazon prime air • Amazon Alexa • Amazon Echo • Amazon Go • Amazon kindle • Amazon Web Services – clouds • Amazon Aurora- Database engine • Amazon Quantum Ledger Database • Amazon SageMaker – machine learning www.linkedin.com/in/emrahkucukoz
- 8. Future strategies onselling everything • Creating and sustaining competitive advantages • Amazon's goal is reportedly a "light's out' warehouse," void of humans. • Blue Origin founder Jeff Bezos announced his intentions to go back to the moon, this time to stay. • Amazon grows and begins to open brick-and-mortar retail stores, large retail competitors like Walmart, Macy’s and Sears announce large layoffs and are closing stores. • Good customer service • Sustainable packaging, waste reduction and renewable energy • Increase delivery speed and flexibility • Enter food business including fresh www.linkedin.com/in/emrahkucukoz
- 9. • VR Vacations •A new world of prescription drugs • The next generation of Bitcoin • A much smarter 'smart TV‘ • Wearable technology you actually want to wear • Synthetic humans to do everything for you • The secure city of the future • Space journey – life • Fully automated business model Future strategies on selling everything ALEXA WILL SHAPE WORLD www.linkedin.com/in/emrahkucukoz
- 10. Automated warehouses Not allof the 125,000 people who work at Amazon warehouses have to worry about losing their jobs to robots — not for 10 years or so, anyways. On Tuesday, Scott Anderson, director of Amazon Robotics Fulfillment, led reporters on a tour of the company’s Baltimore warehouse during which he said it would be “at least 10 years” before Amazon could entirely automate the fulfillment process. “In the current form, the technology is very limited,” Anderson said, according toReuters. “The technology is very far from the fully automated workstation that we would need. www.linkedin.com/in/emrahkucukoz
- 11. https://www.reuters.com/article/us-amazon-com-automation-exclusive/exclusive-amazon-rolls-out-machines-that-pack- orders-and-replace-jobs-idUSKCN1SJ0X1 Amazon is rollingout specially-made machines that are capable of boxing up orders — a job currently held by thousands of human workers. The CartonWrap robots build cardboard boxes around orders as they come down an assembly line, according Reuters’ sources. Each one processes 600 to 700 boxes per hour — roughly five times as many as a human packer, according to the report. The implications for workers are grim. All told, Reuters estimates, the system could cut more than 1,300 jobs across 55 fulfillment centers in the United States. Ultimately, according to an anonymous source who worked on the new boxing machines, Amazon’s objective is a warehouse so devoid of human workers that it doesn’t even need lights www.linkedin.com/in/emrahkucukoz Carton Wrap Robots
- 12. Space journey -life www.linkedin.com/in/emrahkucukoz
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Editor's Notes
- #4 Focus Products Recommendation algorithms – with AI Amazon prime air Amazon Alexa Amazon Echo Amazon Go Amazon kindle Amazon Web Services – clouds Amazon Aurora- Database engine Amazon Quantum Ledger Database Amazon SageMaker – machine learning
- #6 A PESTEL Analysis of Amazon In the past few years, the retail industry has seen exponential growth. E-retail has taken the lead and leading the e-retail saga is Amazon. Jeff Bezos has left no stone unturned to make Amazon the most successful e-retailer. Currently, he is trying to add fire to Amazon’s game in Asia. Now that the recession is over, the customers are spending more on retail items and by 2020 the entire retail industry is expected to have grown to $28 trillion. Apart from economic factors, technology has also boosted the growth of the e-retail sector. This is a PESTEL analysis of Amazon discussing the factors in its macroeconomic environment that affect its growth and profits. Political: The hurdles before e-businesses are not the same as the traditional businesses. Still, there are risk factors that affect the e-retail sector. Amazon is the leader in this sector and it is affected by several political factors. Even for the E-businesses like Amazon and E-bay red tape in the Asian countries can be a big problem. A news report published by Hindustan times highlighted that for any foreign firm trying to do business in India, Red tape and regulatory issues could be a major headache. Taxes and other political issues too are a costly affair. The EU has started targeting the American technological firms and for disputable reasons. While Google was targeted by the EU on anti-trust related issues, Amazon is also being targeted over its e-book deals with EU publishers. These political issues are not limited because there are other problems too that have a political origin. Political stability also leads to economic stability. On the other hand political disruption can disrupt the supply chain and result in reduced sales. Economic: Economic factors are always an important influence on the market and market condition. If the economic condition in a market is good, it will result in better sales and higher profits. The world has recently been out of an economic turmoil. Even in the times of recession, the retail industry was doing well. It is because people will always buy the regular items whether the economy is doing well or not. Now that the condition of the labor market and the world economy is better customers’ confidence is also boosted. People have more disposable income and these economic trends are going to benefit the retail industry. E-retail grew by a whopping 23% in 2015 and much more growth is expected in this sector in the coming years. However, better economic conditions are also going to add to the existing competition in the market. All these factors indicate that in the coming years Amazon could see much more growth and an increase in profits. Social: Social and cultural trends are also an important factor behind the growth of e-retail. Online shopping trends have received a boost in the recent years. The increased use of mobile technology and growth in digital technology both have boosted online sales. Now a larger number of people are having smartphones across the world. A large number of people have smartphones with internet connections and they do a lot from their phones including social media and online shopping. Availability of 4G and growth in digital technology has also boosted the sales of the retailers like Amazon and e-bay. Changing consumer demographics are also going to affect the e-retail sector positively. Millenials like to do most of their shopping online. They want the best products, available at least prices and delivered to their doors. This type of convenience is offered only by the e-retailers. So, Amazon has to benefit a lot from the changing consumer demographics and shopping trends. In those regions of globe, where it has not still deeply penetrated the market, the brand must focus on cultural factors to market itself better and to strike a deeper connection with the customers. Technological: Technological factors have grown highly important in the 21st century. Whether it is a traditional business or an online business each has to depend on IT and other forms of technology to deliver better services. Technological innovation has become the key to success in the modern era. Now, apart from internet, Artificial intelligence and cognitive intelligence have also become important to better serve the customers. Customer service is particularly important to keep the customers engaged and better use of technology in this area is even important. The millenial generation cannot be engaged without good customer service. It has also become the key to building customer loyalty. Growth cannot be achieved either without using technology for marketing, sales and customer relationship management. Social media is another areas where retail businesses have to focus to better engage their customers. Environmental: Sustainability is also a very important concern for the businesses worldwide. Even the e-retailers have to focus on several areas like packaging, waste reduction, and energy consumption to do business sustainably. Amazon has also invested a lot in CSR and sustainability. It has invested in sustainable packaging, waste reduction, and renewable energy. Apart from that it has also invested in engaging the community in sustainability projects. Renewable energy is a key focus area at Amazon. It has made major investments in this area to acquire complete freedom from dependence on non-renewable energy in the long term. Legal: Legal compliance is also just as important for businesses globally. In any aspect of business, it is important for big brands like Amazon to remain compliant with law. Amazon has a separate legal team to oversee the legal issues and challenges. Apart from labor laws, there are other several areas where legal compliance is essential. Any tussle with law can be very costly for big companies like Amazon. Any mistake can result in big fines and a loss of image. As a result from labor to sustainability, there are several areas where Amazon has to deal with significant legal challenges. Laws can differ from nation to nation and companies have to remain compliant without any excuse. So, law can be a major pressure for any company that is operating internationally. Amazon too has to remain cautious
- #7 Five Forces Analysis of Amazon Inc. Amazon Inc Five Forces Analysis The retail industry has grown fast since the recession and Amazon is at the lead in this growth story. The e-retailer sells and ships to more than 185 countries globally. 2015 proved to be a very happy turn for the e-retailer. Amazon’s network is pretty big and is spread throughout the world. The reason that Amazon has found rapid growth is because of the brand’s focus on customer service. Apart from that technology and a growing world economy have also helped it find success and generate unmatched sales. Here is a porter’s five forces analysis of Amazon that discusses how the various forces are shaping competition in the retail industry and what is Amazon’s position with regard to these forces. The five forces model was developed by Michael E Porter. It is a well-known analytical model that can be used to analyse the level of competition and the forces that are affecting competition in the industry. The model is sued widely across the industry for the purpose of strategy formulation. Bargaining power of Amazon suppliers: The bargaining power of Amazon’s suppliers is low to medium. It is because Amazon always has the upper hand when it comes to its supply chain. While the number of Amazon suppliers is big, these suppliers have to do business according to the rules set by Amazon. These suppliers have to follow the code of conduct that Amazon has set. Some of the core areas that are Amazon’s focus in terms of supplier relationships are as follows: Health and safety in production areas and any living quarters The right to legal wages and benefits Appropriate working hours and overtime pay Prevention of child labor or forced labor Fair and ethical treatment, including non-discrimination These suppliers have to follow the supply chain standards set by Amazon. Moreover, for any supplier forward integration would be difficult. However, Amazon can easily switch or find new suppliers. For any product it always has several options. Based on all these factors Amazon’s suppliers’ bargaining power is low to medium. Bargaining power of buyers: The bargaining power of buyers at Amazon is medium to high. Amazon focuses a lot on customer satisfaction and product quality. Switching costs for the customers are low and the number of Amazon competitors has grown in these years. Physical retail is also creating pressures. Every customer has sufficient information when searching for products online and can make his choice based on the available information. It is why customer retention remains an important focus area for the e-retailer. The bargaining power of Amazon buyers is high. Threat of substitute products: The threat of substitute products for Amazon is high. While a number of other brands have also entered online retail, people can also buy from the physical retailers. The only major competitive advantage of Amazon is its excellent customer service apart from its brand name. The customers can easily switch from one brand to another. Threat of new entrants: The threat of new entrants is low for Amazon. It is because the proliferation of digital technology has brought several changes to the retail industry. A number of new brands have entered e-retail. Now it is easier to build an e-retail business model with the available technological resources. From Alibaba to Flipkart and e-bay several national and international brands have emerged that are competing with Amazon. Growth in digital technology has reduced the barriers to entry. However, to build a brand like Amazon is very difficult because of the marketing and other expenses. Not just this, the problem is that there are other strategic factors too which would require the kind of dedication that Jeff Bezos has showed to build a brand. Rivalry in the industry: The level of rivalry in the industry is high because the number of players in e-retail has grown and there is also immense competition from the traditional retail brands. Walmart and Costco are important competitors of the e-retail giant. Rivalry also gets intensified in the retail industry by several other factors. It is not just the big brands, but also the small brands that are fighting for market share and creating competitive pressure. Some big non US brands have entered the US market and some more and planning to enter and expand their presence fast. So, how the level of competition will continue to increase for Amazon is not unimaginable.
- #8 Amazon Echo - Alexa Since that first-generation Echo, customers have purchased more than 100 million Alexa-enabled devices. Last year, we improved Alexa’s ability to understand requests and answer questions by more than 20%, while adding billions of facts to make Alexa more knowledgeable than ever. Developers doubled the number of Alexa skills to over 80,000, and customers spoke to Alexa tens of billions more times in 2018 compared to 2017. The number of devices with Alexa built-in more than doubled in 2018. There are now more than 150 different products available with Alexa built-in, from headphones and PCs to cars and smart home devices. Much more to come!
- #10 By 2028, Amazon could sell products like VR vacations and smarter 'smart' TVs. VR Vacations A new world of prescription drugs The next generation of Bitcoin A much smarter 'smart TV‘ Wearable technology you actually want to wear Synthetic humans to do everything for you The secure city of the future http://money.com/money/5085981/7-things-amazon-will-be-selling-you-by-2028/ https://www.businessinsider.com/futurists-predict-7-things-that-amazon-could-be-selling-us-by-2028-2018-1