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!     Corporate  Strategy
!     E-Retailing Industry Analysis

!     Business Level Strategy

!     SWOT Analysis

!     Strategic Alternatives

!     Action Plan
Began as one of the first
major companies to sell
 goods over the Internet



                   Started as solely as
                   an Online Bookstore



                                  Due to success diversified
                                   into many other product
                                      lines and services


                                                     Multinational e-
                                                      commerce
                                                       company



                                                                  Worlds Largest
                                                                  online Retailer
RETAIL                       NON-RETAIL

     Books, Music & Movies
!
                             !    Referrals/Commission
!    Consumer Electronics
!    Computer & Office
                                 based selling
!    Tools & Automotive      !     Amazon Web Services (AWS)
     Food & Household
                                    Fulfillment by Amazon
!
                             !
!    Home Improvement
!    Toys & Video Games
                                 (Services to businesses)
!    Sports & Fitness
!    Clothing and Jewelry
!    Kids and Baby
!    Kindle
!    IMBD                Helps Amazon to
                          compete with
!     Exchange.com        Google, Ebay,
                              Apple
!      Bibliofind.com
                             Absorb
!       Musicfile.com    Technologies and
                          employees into
!        Planetall.com     Amazon’s IT
                            operations
!         Junglee.com    Improve retail
                           software
                           services
Sellers   Enterprises



                               Content
Consumer
                               Creators
                 Amazon
!     Customer Obsession: We start with the customer and work
    backwards.
!      Innovation: If you don't listen to your customers you will fail.
    But if you only listen to your customers you will also fail.
!       Bias for Action: We live in a time of unheralded revolution and
    insurmountable opportunity--provided we make every minute
    count.
!        Bezos’ Goal is to be a Cost- Leader
!         Committed to leveraging Amazon’s core competencies in
    whatever ways they can find to realize the value of the
    company’s assets

              Mission statement: “Earth’s most customer centric
                                  company”
Providing high value using technology to offer low cost
solutions to the customer
!   Common technology and channel is what makes the
  businesses fit 
!    Amazon can use its core competencies to full effect in
  all areas of business
Concentric
Diversification

  Creating value for customers by using their
             technology expertise


   The “Lowest cost customer centric online
                marketplace”
!     The strategy performs well, and is appropriate for
    the business
!      There is a high potential for long term success
!    Economies of scale (high)

!     Differentiation (high)

!      Total Capital Requirements (high)

!       Access to distribution (high)

!        Government policy (medium)



Barriers to entry = high
!    Specialized assets (medium)

!     Fixed cost of exit (medium)

!      Management commitment (medium)

!       Contractual commitment (low)


    Barriers to exit = medium
!    Concentration (high)
!     Growth rate (high)
!      Fixed costs (high)
!       Storage costs (high)
!        Differentiation (high)
!         Switching costs (low)
!          Capacity additions (medium)
!           Diverse competitors (medium)
!            Exit barriers (medium)


High Rivalry
!     Relative industry concentration
!      Importance of what is sold to the quality and
    success of final product (supplier)
!       Switching costs (buyer)
!        Threat of vertical integration (supplier)
!         Product differentiation (buyer)
!          Availability of substitutes (buyer)


High buyer power
!    Brick and mortar retail stores (high)

!     Catalogs (low)

!      Rental services (high)
!    “Content creators”

!     Shipping industry: FedEx, UPS

!      Internet service industry

!       Computer industry
Amazon
Sales revenue




                                                    eBay
                                      Target.com
                                      Walmart.com
                          Overstock
                          .com

                B&N.com



                              Range of products offered
!    Economies of scale (global)
!     Customer needs (global)
!      Competition (global)
!       Channels (global)
!        Transportation costs (global)
!         Product standards (global)


Industry globalization = high
!    Technology
      Expertise in technology
      One-Click System

!    Economies of Scale

!     Talented workforce
      Company     Culture
!    Marketing
      Brand   name and reputation
!    Extensive product offerings

!     Extremely low prices
      Shipping/deliveryadvantages
      Manufacturing of Kindle as lowest-price e-reader
!     Most sustainable competitive advantages
    include:
      Economy   of Scale
      Expertise in Technology

      Talented workforce and culture of company
!    Difficult to differentiate products

!     Copying the business model

!      Can’t offer “instant gratification”
Competitive
                                             Advantages

                                                                Be Better Than
          Avoid Competitors                                      Competition


Attractive Industry   Attractive S.G.     Attractive Niche
                                                               Cost
                                                                         Differentiation
                                                             Advantage

 Entry Barriers                             Isolating
                      Mobility Barriers
                                           Mechanisms
!    “Lowest possible prices”
      “Amazon   prime” members
      Customers can avoid state sales tax

      Free shipping offers

      Small companies and individual sellers

      Selling Kindle at a deficit

      Amazon’s Price Check App
Consolidated Net Sales (millions)
25,000


                                        21,372

20,000



                         15,497
15,000

          11,681

10,000




 5,000




    0

         2009            2010          2011

  Overall net sales increased 41%, 40% and 28% in
                2011, 2010, and 2009
North American Net Sales (millions)
   25,000


                                             21,372

   20,000



                             15,497
   15,000


             11,681


   10,000




    5,000




       0

             2009            2010            2011
North American sales growth rate was 43%, 46%, and 25% in
                  2011, 2010, and 2009
International Net Sales (millions)
25,000


                                                     21,372

20,000



                                15,497
15,000


            11,681


10,000




 5,000




    0

           2009                 2010                 2011

   International sales growth rate was 38%, 33%, and 31% in
                     2011, 2010, and 2009
!    New skills through acquisitions

!     Strong IT system

!      Extensive product lines at low prices

!       Strong brand image
!    No product differentiation

!     Low profit margins

!      Lose Focus
!    Global expansion

!     Online movies

!      Expand the technology service market

!       Growth in Cloud computing
!    Dependence on vendors

!     Fierce competition

!      Government
!    Find new areas of growth

!     How to maintain long term profitability
Consistency   Consistency
  Growth      with Amazons      with
                 Strategy    Marketplace

Consistency                  Short and
              Competitive
   with                      Long Term
              Advantages
 Resources                   Profitability
1. Eliminate Kindle Fire

2. Expansion to Scandinavia

   3. Expansion of AWS
Discontinue the the Kindle Fire, in favor of
the Kindle and licensing media content to
             existing devices.


                       VS


         Kindle Fire         Kindle
Cost per
Cost more to
                 Highly          share
produce for                                    High Cost
               competitive    decreased
 what it is                                   Short Term
                 Market      since launch
  sold for
                             of Kindle Fire
Would                  Amazon
                                       Want to
  Engage        High       would
                                      enter the
Consumers     expected   make a lot
                                        tablet
into Online    returns   of money
                                       market
 Retailing               on Media
Inconsistent with
                          Consistent with the      Consistent with
Strategy because we
                          marketplace since     resources since new
  are favoring Short-
                          we are subsidizing      technologies are
term Profitability over
                           our own product            needed
      Long-term
Expand E-Commerce Globally into the
       Scandinavian Market
Modern ICT
                                Sophisticated
                   and IT
High Use of                     Infrastructure
              infrastructures                    High Income
  Internet                       for Importing
                 to support
                                and Exporting
                  services
!    Complex Road System
        Bridges to connect
         Denmark and Sweden
!     Port of Copenhagen in
    the Baltic Sea
      24 hour ship handling
      Short turnaround times
       and some of the lowest
       storage times in Europe
Experienced
Not as High                    Online
              4 Different
Growth as                    Shoppers
              Exchange
 the BRIC                     can find
                Rates
  Nations                       other
                            Alternatives
!     Result in 5-20%
    Adverse Change
                         $50          $220
                        Million       Million
                        for 5%       for 20%


                              $110
                            Million for
                              10%
Consistent with        Consistent with      Consistent with
 Strategy because       the Market Place         Resources
it favors long term     because there is     because we have
  profitability over   growth in Global E-     the Capital to
     short term            Commerce           expand Abroad
Expanding Amazon Web Services (AWS)
   to Meet the Needs of Developers
Offers
Businesses low                   Offers Broad
                 Pay As You Go
 fixed capital                   Functionality   Reliable Data
                 Model Based
 expenses in                      and Global     Management
                   on need
 exchange for                        Scale
 variable cost
Short-Term
                           Long-Term
Profitability is Low
                       Profitability is High
because of Large
                       because it is a high
      Capital
                         growth market
   Investments
Expanding
                                   Large
   Our      Market   Available
                                 Industry
Customer    Leader    Capital
                                  Growth
  Base
Large
            Short Life   Investment
Untested
             Span of       in Fixed
 Market
           Technology       Capital
                            Assets
Consistent with         Consistent with
   Consistent with
                          Marketplace because       Resources because
Strategy because we
                           it’s a Proven Area of   We are Expanding on
  are favoring Long-
                          Future Growth Where          Existing Data
Term Profitability over
                              we are Already a         Centers, and
     Short-Term
                               Market Leader       Investing Free Capital
Discontinue the            Global Expansion             Expansion of AWS
                                   Kindle Fire              into Scandinavia

      Short-term                     4 (.1) = .4                 2 (.1) = .2                  2 (.1) = .2
    Profitability (.1)

      Long-term                      0 (.3) = 0                 4 (.3) = 1.2                 5 (.3) = 1.5
    Profitability (.3)

       Growth (.2)                   0 (.2) = 0                   5 (.2) = 1                  5 (.2) = 1
   Consistency with                  3 (.2) = .6                 4 (.2) = .8                  4 (.2) = .8
   Marketplace (.2)

   Consistency with                  2 (.2) = .4                  5 (.2) = 1                  5 (.2) = 1
     Strategy (.2)
          Totals*                        1.2                          4.2                          4.5

*criteria weighted out of 1, alternatives scored from 1-5, for a possible score of up to 5 points total, 0 = no value,
5 = most value
Expanding Amazon Web Services (AWS)
   to Meet the Needs of Developers
Moving from Simply         Moving from
 Infrastructure to     Infrastructure as a
 Offering Platform    Service to Platform as
     Services        a Service (IaaSPaaS)
Offering a
Free Package
                Promoting
 to meet the                 Freeware vs
               AWS through
   needs of                   Trial-ware
                Freeware
    Basic
 Developers
Expanding Data
  Centers Globally to   Necessary to Keep Up
Increase Data Storage      with Increasing
   and Throughput             Demand
• Develop and Implement a Platform (PaaS) for Developers
    • Create basic version of AWS and offer as Freeware
1

    • Refine Platform offering based on user feedback
    • Based on Demand, invest in fixed capital asset IT infrastructure
2
    • Re-evaluate the current strategy
    • If strategy proves successful, allow for additional investment in
3     IT infrastructure
DEPARTMENTS    Year 1   Year 2   Year 3   Total (Million of $)
R&D            $30      $20      $20      $70
Marketing      $15      $10      $5       $30
Data Centers   $0       $100     $100     $200
Total          $45      $130     $125     $300
!     Strong competition in PaaS offering from
    Microsoft Azure
!      Losing paying customers with basic needs to
    the free package of AWS
!       Risk of losing large investments in Fixed
    Capital Assets should demand not be as
    expected
!     Liquidating un-needed data centers to an IT
    competitor (Azure)
!      Modifying the Freeware offering of AWS to
    Trialware
questions?
Budget for Alternative 2- Expansion into Scandinavia

DEPARTMENTS               Year 1            Year 2            Year 3            Total (Million of $)
Acquire CDON              $150              $0                $0                $150
Marketing                 $35               $25               $15               $75
R&D                       $50               $45               $30               $125
Total*                    $235              $65               $45               $350

*Cost	
  of	
  to	
  Acquire	
  CDON:	
  856	
  Billion	
  Swedish	
  Kronor	
  =	
  150	
  Million	
  US	
  Dollars

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Amazon.com Strategic Analysis

  • 1.
  • 2. !   Corporate Strategy !   E-Retailing Industry Analysis !   Business Level Strategy !   SWOT Analysis !   Strategic Alternatives !   Action Plan
  • 3.
  • 4. Began as one of the first major companies to sell goods over the Internet Started as solely as an Online Bookstore Due to success diversified into many other product lines and services Multinational e- commerce company Worlds Largest online Retailer
  • 5. RETAIL NON-RETAIL  Books, Music & Movies ! !  Referrals/Commission !  Consumer Electronics !  Computer & Office based selling !  Tools & Automotive !  Amazon Web Services (AWS)  Food & Household  Fulfillment by Amazon ! ! !  Home Improvement !  Toys & Video Games (Services to businesses) !  Sports & Fitness !  Clothing and Jewelry !  Kids and Baby !  Kindle
  • 6. !  IMBD Helps Amazon to compete with !  Exchange.com Google, Ebay, Apple !  Bibliofind.com Absorb !  Musicfile.com Technologies and employees into !  Planetall.com Amazon’s IT operations !  Junglee.com Improve retail software services
  • 7. Sellers Enterprises Content Consumer Creators Amazon
  • 8.
  • 9. !  Customer Obsession: We start with the customer and work backwards. !  Innovation: If you don't listen to your customers you will fail. But if you only listen to your customers you will also fail. !  Bias for Action: We live in a time of unheralded revolution and insurmountable opportunity--provided we make every minute count. !  Bezos’ Goal is to be a Cost- Leader !  Committed to leveraging Amazon’s core competencies in whatever ways they can find to realize the value of the company’s assets Mission statement: “Earth’s most customer centric company”
  • 10. Providing high value using technology to offer low cost solutions to the customer !  Common technology and channel is what makes the businesses fit !  Amazon can use its core competencies to full effect in all areas of business
  • 11. Concentric Diversification Creating value for customers by using their technology expertise The “Lowest cost customer centric online marketplace”
  • 12. !  The strategy performs well, and is appropriate for the business !  There is a high potential for long term success
  • 13.
  • 14. !  Economies of scale (high) !  Differentiation (high) !  Total Capital Requirements (high) !  Access to distribution (high) !  Government policy (medium) Barriers to entry = high
  • 15. !  Specialized assets (medium) !  Fixed cost of exit (medium) !  Management commitment (medium) !  Contractual commitment (low) Barriers to exit = medium
  • 16. !  Concentration (high) !  Growth rate (high) !  Fixed costs (high) !  Storage costs (high) !  Differentiation (high) !  Switching costs (low) !  Capacity additions (medium) !  Diverse competitors (medium) !  Exit barriers (medium) High Rivalry
  • 17. !  Relative industry concentration !  Importance of what is sold to the quality and success of final product (supplier) !  Switching costs (buyer) !  Threat of vertical integration (supplier) !  Product differentiation (buyer) !  Availability of substitutes (buyer) High buyer power
  • 18. !  Brick and mortar retail stores (high) !  Catalogs (low) !  Rental services (high)
  • 19. !  “Content creators” !  Shipping industry: FedEx, UPS !  Internet service industry !  Computer industry
  • 20. Amazon Sales revenue eBay Target.com Walmart.com Overstock .com B&N.com Range of products offered
  • 21. !  Economies of scale (global) !  Customer needs (global) !  Competition (global) !  Channels (global) !  Transportation costs (global) !  Product standards (global) Industry globalization = high
  • 22.
  • 23. !  Technology   Expertise in technology   One-Click System !  Economies of Scale !  Talented workforce   Company Culture !  Marketing   Brand name and reputation
  • 24. !  Extensive product offerings !  Extremely low prices   Shipping/deliveryadvantages   Manufacturing of Kindle as lowest-price e-reader
  • 25. !  Most sustainable competitive advantages include:   Economy of Scale   Expertise in Technology   Talented workforce and culture of company
  • 26. !  Difficult to differentiate products !  Copying the business model !  Can’t offer “instant gratification”
  • 27. Competitive Advantages Be Better Than Avoid Competitors Competition Attractive Industry Attractive S.G. Attractive Niche Cost Differentiation Advantage Entry Barriers Isolating Mobility Barriers Mechanisms
  • 28.
  • 29. !  “Lowest possible prices”   “Amazon prime” members   Customers can avoid state sales tax   Free shipping offers   Small companies and individual sellers   Selling Kindle at a deficit   Amazon’s Price Check App
  • 30. Consolidated Net Sales (millions) 25,000 21,372 20,000 15,497 15,000 11,681 10,000 5,000 0 2009 2010 2011 Overall net sales increased 41%, 40% and 28% in 2011, 2010, and 2009
  • 31. North American Net Sales (millions) 25,000 21,372 20,000 15,497 15,000 11,681 10,000 5,000 0 2009 2010 2011 North American sales growth rate was 43%, 46%, and 25% in 2011, 2010, and 2009
  • 32. International Net Sales (millions) 25,000 21,372 20,000 15,497 15,000 11,681 10,000 5,000 0 2009 2010 2011 International sales growth rate was 38%, 33%, and 31% in 2011, 2010, and 2009
  • 33.
  • 34. !  New skills through acquisitions !  Strong IT system !  Extensive product lines at low prices !  Strong brand image
  • 35. !  No product differentiation !  Low profit margins !  Lose Focus
  • 36. !  Global expansion !  Online movies !  Expand the technology service market !  Growth in Cloud computing
  • 37. !  Dependence on vendors !  Fierce competition !  Government
  • 38. !  Find new areas of growth !  How to maintain long term profitability
  • 39.
  • 40. Consistency Consistency Growth with Amazons with Strategy Marketplace Consistency Short and Competitive with Long Term Advantages Resources Profitability
  • 41. 1. Eliminate Kindle Fire 2. Expansion to Scandinavia 3. Expansion of AWS
  • 42. Discontinue the the Kindle Fire, in favor of the Kindle and licensing media content to existing devices. VS Kindle Fire Kindle
  • 43. Cost per Cost more to Highly share produce for High Cost competitive decreased what it is Short Term Market since launch sold for of Kindle Fire
  • 44. Would Amazon Want to Engage High would enter the Consumers expected make a lot tablet into Online returns of money market Retailing on Media
  • 45. Inconsistent with Consistent with the Consistent with Strategy because we marketplace since resources since new are favoring Short- we are subsidizing technologies are term Profitability over our own product needed Long-term
  • 46. Expand E-Commerce Globally into the Scandinavian Market
  • 47. Modern ICT Sophisticated and IT High Use of Infrastructure infrastructures High Income Internet for Importing to support and Exporting services
  • 48. !  Complex Road System   Bridges to connect Denmark and Sweden !  Port of Copenhagen in the Baltic Sea   24 hour ship handling   Short turnaround times and some of the lowest storage times in Europe
  • 49.
  • 50. Experienced Not as High Online 4 Different Growth as Shoppers Exchange the BRIC can find Rates Nations other Alternatives
  • 51. !  Result in 5-20% Adverse Change $50 $220 Million Million for 5% for 20% $110 Million for 10%
  • 52. Consistent with Consistent with Consistent with Strategy because the Market Place Resources it favors long term because there is because we have profitability over growth in Global E- the Capital to short term Commerce expand Abroad
  • 53. Expanding Amazon Web Services (AWS) to Meet the Needs of Developers
  • 54. Offers Businesses low Offers Broad Pay As You Go fixed capital Functionality Reliable Data Model Based expenses in and Global Management on need exchange for Scale variable cost
  • 55. Short-Term Long-Term Profitability is Low Profitability is High because of Large because it is a high Capital growth market Investments
  • 56. Expanding Large Our Market Available Industry Customer Leader Capital Growth Base
  • 57. Large Short Life Investment Untested Span of in Fixed Market Technology Capital Assets
  • 58. Consistent with Consistent with Consistent with Marketplace because Resources because Strategy because we it’s a Proven Area of We are Expanding on are favoring Long- Future Growth Where Existing Data Term Profitability over we are Already a Centers, and Short-Term Market Leader Investing Free Capital
  • 59.
  • 60. Discontinue the Global Expansion Expansion of AWS Kindle Fire into Scandinavia Short-term 4 (.1) = .4 2 (.1) = .2 2 (.1) = .2 Profitability (.1) Long-term 0 (.3) = 0 4 (.3) = 1.2 5 (.3) = 1.5 Profitability (.3) Growth (.2) 0 (.2) = 0 5 (.2) = 1 5 (.2) = 1 Consistency with 3 (.2) = .6 4 (.2) = .8 4 (.2) = .8 Marketplace (.2) Consistency with 2 (.2) = .4 5 (.2) = 1 5 (.2) = 1 Strategy (.2) Totals* 1.2 4.2 4.5 *criteria weighted out of 1, alternatives scored from 1-5, for a possible score of up to 5 points total, 0 = no value, 5 = most value
  • 61. Expanding Amazon Web Services (AWS) to Meet the Needs of Developers
  • 62. Moving from Simply Moving from Infrastructure to Infrastructure as a Offering Platform Service to Platform as Services a Service (IaaSPaaS)
  • 63.
  • 64. Offering a Free Package Promoting to meet the Freeware vs AWS through needs of Trial-ware Freeware Basic Developers
  • 65. Expanding Data Centers Globally to Necessary to Keep Up Increase Data Storage with Increasing and Throughput Demand
  • 66. • Develop and Implement a Platform (PaaS) for Developers • Create basic version of AWS and offer as Freeware 1 • Refine Platform offering based on user feedback • Based on Demand, invest in fixed capital asset IT infrastructure 2 • Re-evaluate the current strategy • If strategy proves successful, allow for additional investment in 3 IT infrastructure
  • 67. DEPARTMENTS Year 1 Year 2 Year 3 Total (Million of $) R&D $30 $20 $20 $70 Marketing $15 $10 $5 $30 Data Centers $0 $100 $100 $200 Total $45 $130 $125 $300
  • 68.
  • 69. !  Strong competition in PaaS offering from Microsoft Azure !  Losing paying customers with basic needs to the free package of AWS !  Risk of losing large investments in Fixed Capital Assets should demand not be as expected
  • 70. !  Liquidating un-needed data centers to an IT competitor (Azure) !  Modifying the Freeware offering of AWS to Trialware
  • 72.
  • 73.
  • 74. Budget for Alternative 2- Expansion into Scandinavia DEPARTMENTS Year 1 Year 2 Year 3 Total (Million of $) Acquire CDON $150 $0 $0 $150 Marketing $35 $25 $15 $75 R&D $50 $45 $30 $125 Total* $235 $65 $45 $350 *Cost  of  to  Acquire  CDON:  856  Billion  Swedish  Kronor  =  150  Million  US  Dollars

Editor's Notes

  1. In reference to direct competitors – online retailers, E-bay, Overstock.com, etc.Amazon has achieved its competitive advantage through developing its technology internally and with a significant investment in this which may not be available to other organisations without the right focus on the online channels.As Amazon explains in SEC (2005) ‘using primarily our own proprietary technologies, as well as technology licensed from third parties, we have implemented numerous features and functionality that simplify and improve the customer shopping experience, enable third parties to sell on our platform, and facilitate our fulfillment and customer service operations.
  2. In reference to direct competitors – online retailers, E-bay, Overstock.com, etc.
  3. Maintaining higher profits than competitors over long periods of time- Difficult for competitors to enter at a large enough scale to be cost competitive and it will take them a lot of time to move down the “Learning Curve”“Many of the problems we face have no textbook solutions, and so we — happily — invent new approaches”… All the effort we put into technology might not matter that much if we kept technology off to the side in some sort of R&D department, but we don’t take that approach. Technology infuses all of our teams, all of our processes, our decision-making, and our approach to innovation in each of our businesses. It is deeply integrated into everything we do”.The quote shows how applying new technologies is used to give Amazon a competitive edge
  4. Easier to copy tangible assets – can’t really differentiate products being sold
  5. In reference to direct competitors – online retailers, E-bay, Overstock.com, etc.
  6. Industry-wide cost-leader – lowest price offerings and kindle lowest cost e-readerMain focus is on giving their customers VALUE no matter what they do.Consumers look to amazon.com for lower costs over bricks-and-mortar retailers as well as other online retailers.
  7. Amazon endeavours to offer its customers “the low- est possible prices” 190, as they consider low prices as a strategic factor for future success.191 Amazon’s pricing strategy also includes free shipping offers, and since 2005, members of the “Amazon Prime” program can benefit from free two-day shipping and discounted overnight shipping.The app allows consumers to scan bar codes in local stores and compare prices directly with Amazon. Many have argued that the app gives the online giant an unfair advantage over its smaller competitors.Unlike brick-and-mortar shops, online retailers don’t pay sales tax unless they have a physical presence in a state, and they don’t have to staff an actual store either. The lower overhead allows them to undercut the competition.
  8. “Creating value for the consumers”Net SalesNet sales include product and services sales. Product sales represent revenue from the sale of products andrelated shipping fees and digital content where we are the seller of record. Services sales represent third-partyseller fees earned (including commissions) and related shipping fees, digital content subscriptions, and non-retailactivities. Net sales information is as follows:Year Ended December 31,2011 2010 2009(in millions)Net Sales:North America . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $26,705 $18,707 $12,828International . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21,372 15,497 11,681Consolidated . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $48,077 $34,204 $24,509Year-over-year Percentage Growth:North America . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43% 46% 25%International . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 33 31Consolidated . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41 40 28Year-over-year Percentage Growth, excluding effect of exchange rates:North America . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43% 46% 26%International . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 34 33Consolidated . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 40 29Net Sales Mix:North America . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56% 55% 52%International . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44 45 48Consolidated . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100% 100% 100%North American sales growth rate was 43%, 46%, and 25% in 2011, 2010, and 2009International sales growth rate was 38%, 33%, and 31% in 2011, 2010, and 2009Sales growth in each year primarily reflects unit sales.Increased unit sales were driven largely by our continued efforts to reduce prices for our customers, including from our shipping offers, by a larger base of sales in faster growing categories such as electronics and other general merchandise, by increased in-stock inventory availability, and by increased selection of product offerings.
  9. New skills through acquisitions– Strong IT system – We’ve been around for a long time and one of the first to operate the systemExtensive product lines at low prices – Amazon outsourced their activities to minimize costs, such as the datacenters in different countries that handle customer serviceStrong brand image -
  10. No product differentiationLow profit margins – they are in the retailing business. With a wide variety of products at low prices, they must sell a lot to make a profitLose Focus – they have such a wide variety of products that they may lose focus of their core competencies
  11. Global expansion – Go international in new areas. Already in some international markets such as Canada, China, Germany, UKOnline movies - Expand the technology service market – they have a strong IT system, so they can do more technology-wise to expand their businessGrowth in Cloud computing -
  12. Dependence on vendors – Amazon’s main source of business are the companies and retailers that are acquired or merged with Amazon. These vendors are all on short term contracts that can negatively affect Amazon if they decide to leave usCompetition - There is a lot of competition online and in retail storesGovernment – the government is afraid is afraid that Amazon will become a monopolist in the United States. Legal issues in China due to government regulations. The government controls everything in China, so Amazon can face potential dangers from their authority.
  13. Since we are becoming bigger and bigger, our e-market is becoming saturated. We need to find new areas of growth to help us maintain long term profitability.
  14. providing a technology platform with broad functionality and global scal
  15. lt
  16. providing a technology platform with broad functionality and global scal
  17. Spends 1.8B in AWS – spend another 2B