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Biography of a giant - Amazon.com

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As part of a college assignment, had made this presentation. The theme was Marketing Strategies, learning what was done right by a successful company.

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Biography of a giant - Amazon.com

  1. 1. Biography of a Giant A presentation in Marketing Strategy
  2. 2. A – Z on a .com <ul><li>Founded in 1994 by Jeff Bezos
  3. 3. Launched in 1995
  4. 4. Online bookstore and more...
  5. 5. First major companies to do e-commerce </li></ul>
  6. 6. Did you know that... The original name of Amazon.com was Cadabra.com
  7. 7. Startup phase <ul><li>At 30, already VP of
  8. 8. Quit his job, to start an Internet company
  9. 9. Aggressive growth prospects ( 2300% )
  10. 10. Tom Alburg invested $100,000 (seed capital) </li></ul>
  11. 11. And sell what? “Bezos drew up a list of 20 products that could be sold on the Internet” <ul><li>Narrowed to 5 </li><ul><li>Books
  12. 12. Hardware
  13. 13. Software
  14. 14. Videos
  15. 15. Compact Disc </li></ul></ul><ul><li>Finally selected Books with 2000 titles in stock </li></ul>
  16. 16. Seattle HQ “An Online company with its core competency being Offline” Seattle because... <ul><li>Large high-tech work force
  17. 17. Proximity to a large book distribution center </li></ul>
  18. 18. Company Expansion 1997, IPO announced <ul><li>Fund used to: </li><ul><ul><li>Broaden the company
  19. 19. Improve the product
  20. 20. Distribution capabilities </li></ul></ul><li>70% expansion in the Seattle HQ
  21. 21. New office in east coast </li></ul>“reduce delivery with east coast office publisher and customers”
  22. 22. Did you know that... Douglas Hofstadter 's book holds the privilege of being the first sold book on Amazon.com
  23. 23. Reseller Model The Associate Program was also launched in 1997 <ul><li>Webmasters could refer a book sale to Amazon
  24. 24. Made 3-8% on book sale
  25. 25. Amazon partnered with two US biggies
  26. 26. Later partnerships including </li></ul>
  27. 27. Product Expansion The Amazon Advantage program <ul><li>Sell your consignment @ 55% discount
  28. 28. Yearly membership fee of $29.95 </li></ul>Amazon stocks, manages, delivers and at the end pays you for every book
  29. 29. Did you know that... A glitch in Amazon.com's programming allowed writers to criticize their own works favorably on the site.
  30. 30. Product Expansion(cont.) Amazon kids <ul><li>Catering to site demographics
  31. 31. 100K titles for teens and kids </li></ul>Amazon music <ul><li>1998 also launched the music section with 125K titles
  32. 32. Searchable by artist, song title, label
  33. 33. Hear before buying (225K sound clips) </li></ul>
  34. 34. Online bubble burst <ul><li>Jan 2000, company fired 150 workers
  35. 35. Reported a loss of $323 million for fourth quarter '99-2000
  36. 36. Summer of 2000, stock price dropped substantially
  37. 37. Early 2001, Amazon reported a whopping fiscal loss of $1.4 billion </li></ul>“ Lehman Brothers warned investors that the company might run out of cash and advised them to avoid its stock”
  38. 38. The Change <ul><li>Cut expenses and restructure business model
  39. 39. Laying off 1,300 workers(about 15% work force)
  40. 40. Closing two warehouses
  41. 41. Shutting down a Seattle customer-service center </li></ul>“Bezos followed with a memo calling for the company to get the crap out and stop selling products that weren't profitable.”
  42. 42. The Change (cont.) <ul><li>From specialty retailer into an online shopping portal
  43. 43. Adopted eBay's auction model
  44. 44. Selling merchandise from other retailers (apparel, etc)
  45. 45. Does not actually take control of the inventory </li></ul>&quot;The more things they can sell to (customers) and not do the dirty work, the better the business grows,&quot; said Kate Delhagen, a retail analyst with Forrester Research.
  46. 46. Website over the years
  47. 47. Branding - reBranding
  48. 48. Acquisitions “All our acquisition are specifically to gain technological edge or market-share” Year: 1998 <ul><li>The biggest repository for information about movies and television
  49. 49. Strengthening their plans to launch movies on Amazon portal </li></ul>
  50. 50. Acquisitions “All our acquisition are specifically to gain technological edge or market-share” Year: 1999 <ul><li>Every Amazon member gets a free first aid kit
  51. 51. Acquired 46% of Drugstore.com for $44 Million
  52. 52. Entry to the Pharmacy market segment </li></ul>
  53. 53. Acquisitions “All our acquisition are specifically to gain technological edge or market-share” Year: 1999 <ul><li>Access to many technology patents
  54. 54. A ton of demographics information
  55. 55. Opportunity for behavioral targetting </li></ul>
  56. 56. Acquisitions “All our acquisition are specifically to gain technological edge or market-share” Year: 2000 <ul><li>A 30 Million investment in WineShopper
  57. 57. Access to 550 wineries in 45 States
  58. 58. Reaching 85% of USA population </li></ul>
  59. 59. Acquisitions “All our acquisition are specifically to gain technological edge or market-share” Year: 2004 <ul><li>A web retailer in China, now Amazon china
  60. 60. Purchased for $75 Million
  61. 61. Caters mainly to books, music, video </li></ul>
  62. 62. Acquisitions “All our acquisition are specifically to gain technological edge or market-share” Year: 2006 <ul><li>Makers of open-source s/w used in wikipedia.org
  63. 63. Invested in Wikia inc. series B financing
  64. 64. Focus on User content driven development </li></ul>
  65. 65. Acquisitions “All our acquisition are specifically to gain technological edge or market-share” Year: 2008 <ul><li>Bought the online fabric store (amount undisclosed)
  66. 66. Custom measures and cut fabric
  67. 67. More to the Amazon catelog </li></ul>
  68. 68. Acquisitions “All our acquisition are specifically to gain technological edge or market-share” Year: 2009 <ul><li>An Online cooking encyclopedia
  69. 69. Untapped channel to up-sell F&B
  70. 70. Strengthen Amazon in another segment </li></ul>
  71. 71. Acquisitions “All our acquisition are specifically to gain technological edge or market-share” Year: 2009 <ul><li>Image recognition technology
  72. 72. Most popular applications for iPhones and Android phones
  73. 73. Gives image searching to Amazon mobile users </li></ul>
  74. 74. Acquisitions “All our acquisition are specifically to gain technological edge or market-share” Year: 2009 <ul><li>Acquisition worth $1.2 Billion
  75. 75. Biggest shoe retailer online
  76. 76. Core competency Logistics & Supply Chain </li></ul>
  77. 78. Whats the strategy now? <ul><li>Plateauing growth!! </li></ul>
  78. 79. Line Extension The Kindle <ul><ul><li>Paper like display quality
  79. 80. Books, Newspapers, Magazine
  80. 81. Adjustable font
  81. 82. Huge battery life </li></ul></ul>
  82. 83. Selling more e-books <ul><li>In 2010, for every 100 hardcover books Amazon sold 143 Kindle books
  83. 84. The U.S. Kindle store now has more than 630,000 books available
  84. 85. About 510,000 books available for Kindle are priced at $9.99 or less
  85. 86. Over 1.8 million free , out-of-copyright, pre-1923 books are also available to read on Kindle </li></ul>
  86. 87. Shift of focus <ul><li>AWS (Amazon Web Services)
  87. 88. Mechanical Turks (Human Intelligence) </li></ul>
  88. 89. Diversification <ul><li>From e-retailing to web services </li><ul><li>E-retailing is Retailing
  89. 90. Gap in the Current model </li></ul></ul>
  90. 91. AWS offering <ul><li>Compute power, storage, and other services
  91. 92. Platform or programming model flexibility
  92. 93. Ton of benefits </li><ul><li>Pay as you go model
  93. 94. Scalable
  94. 95. Comprehensive eco-system
  95. 96. Reliable – the Dig effect </li></ul></ul>
  96. 97. AWS usage growth <ul><li>Exponential growth </li></ul>
  97. 98. Who else use AWS <ul><li>Every major educational institute </li></ul>
  98. 99. Diversification (cont.) “Amazon, from web services to human intelligence” <ul><li>Issues doing it recruiting in-house </li><ul><li>Time consuming
  99. 100. Expensive
  100. 101. Difficult to scale </li></ul></ul>
  101. 102. Mechanical Turks <ul><li>Amazon take 10% project fee
  102. 103. Pay only for what you use
  103. 104. A global, on-demand, 24 x 7 workforce </li></ul>

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