A little about us…Founded in 1995; Started selling books online and now operate Web sites that offer various products and services, which include: music, DVDs, videos, electronics, camera and photography, clothing apparel, shoes, etc.Features include: one-click shopping, customer review and e-mail order verification.Headquarters is in Seattle (Washington) . It has six global websites to serve domestic customers in the US, the UK, Germany, France, Japan and Canada
History In May 1997 Amazon.com completed its initial public offering (IPO). In the same year,1997, they signed advertising and promotional agreement with – America online, yahoo , Netscape, geocities… April 1998 the company acquired online bookstores in U.K. and Germany : first international expansion In 2000 Amazon.com launched in Japan and France
Vision Statement Our vision is to be Earths most customer centric company; to build a place where people can come to find and discover anything they might want to buy online.
Mission Statement The company’s six core values: customer obsession, ownership, bias for action, frugality, high hiring bar, and innovation. The company motto: ‘Work Hard, Have Fun, and Make History’.
Where we stand today..most frequent used web site.Largest internet-based sellers.Offering over 4.7 million discounted books .CDs, DVDs & videos. computer games.audio books and video tapes .85% share of online book sales .six million customers in more than 160 countries.
AMAZON.COM Business Model Shopping convenienceCreates value for costumers ( from home to office) Decisions-enabling information by offering: Discounting Prices Ease of purchase A Wide Selection Speed Reliability
S W O T• Strength • Weakness • Opportunit • Threat y
STRENGTHS: Strong management team Strong customer service support Up-to-date technology and software High brand name recognition Strategic alliances Increased revenue from international segment High inventory turnover
WEAKNESSES: Accumulated deficit of $3 billion Operating losses Interest payments on debt issued High inventory risk – seasonalityBreach of customer confidential information
OPPURTUNITIES Construction of an extensive community of buyers Internet taxes prohibited by the Internet Tax Freedom Act (1998) and its extensions (2001 and 2003) Growth of internet users in the next five years, predominantly in the international market E-commerce expansion in Asia and the Pacific Several product categories with high penetration of retail on-line sales 13% jump of Latinos going online in 2003 in the US since 2001
THREATS:eBay, Barnes & Nobles, and Wal-MartPossible rejection to on-line sale in international markets if new taxes (Value Added taxes: VAT) in products are leviedPopulation segment not targeted to on-line sales due to their lack of internet accessCompetition will increase due to the low barriers to entry in the market: offline companies are coming online
BCG Matrix Relative Market Share Position High 1.0 Medium .50 Low 0.0 High Stars Question Marks +20 Domestic International Med 0IndustrySales Cash Cows DogsGrowthRate Low -20
STRATEGY : CATEGORISATION of product , discounted prices, Can post and read the reviews about product Few examples: A costumer can listen to the sample music before purchasing it. Can compare his products with various other available products.TARGETING : internet users, who do not have time to go to retailers . Few example: Business professionals working in MNCs with odd shift timingsPOSITIONING : order anything by just one click and costumer will receive their products at their door step. Few examples: costumer can purchase anything from anywhere
Business Strategy Electronically communicated with the costumers Send a confirmation message at the time of order received and during processing. Costumers can track delivery status online using a key code number.
C- CUSTOMER NEEDS Customer-centric environment Internet is 24/7 available medium Information can be downloaded immediatelyC- COST Discounted price- due to vertical integration Cost reduction through e-marketing
C-CONVENIENCE Order from home or office Delivery at door step One click shoppingC-COMMUNICATION Informing customer at every step Answering emails within 24 hours Virtual communities
COMPETITORSBARNES AND NOBLES.COMStrategic alliance with German media- BertelsmannDirect relationship with some 20,000 publishers anddistributors750,000 titles available for same day shippingBut have only 10 percent market value of amazon.com
FEW OTHER COMPETITORS Retail stores E-bays Wal-Mart Letsbuy.com
CUSTOMER RELATIONSHIPMANAGEMENT Greets customer by name Recommendation based on past behavior Sort order by departments(segregation) Delivery confirmation Customer feedback process Respond quickly to customer problem & queries Complaint management and resolution policies Training processes at different levels
Questions Approximately a quarter of Amazon.com’s sales areto overseas costumers. How could amazo.comstructure its costumer service department to betterserve an increasingly international andculturally/linguistically diverse costumer base?Should Amazon.com have “country specialists” formarket where it lacks an overseas presence? Why orwhy not?
Answers Quarter of the total revenue come from the international market Needs and wants of costumers varies from place to place(according to social, cultural and environmental conditions)SUGGESSIONS : Should have separate head offices for different countries Sufficient amount of complaints and service centers according to geographical areas Different sets of complaint service centers for different languages Instead of IVR based complaints system, manual costumer care executive should be there.
How could Amazon.com better measure costumer service? How could the costumer service manger implement a continuous improvement process? What companies would you benchmark and how?
Answers 24/7 toll free number for both international and domestic costumer On job and classroom training to the employees for handling different types of costumer On the spot repair facility IVR(Integrated Voice Response) can be replaced by manual C.C.E(costumer Care Executive) Bench mark companies DELL