Amazon.
com
Retail Management
For Genpact’s Review
Introduction
American-based multinational electronic commerce company
Seattle, Washington, it is America’s largest online retailer, with nearly three
times the internet sales revenue of runner up Staples, Inc.
Jeff Bezos founded [Link], Inc. in 1994 and launched online in 1995
Product Lines - On-line bookstore, VHS, DVD, music CDs and MP3s,
computer software, video games, electronics, apparel, furniture, food, toys,
etc.
Innovative technology is the backbone of the company's success. "Its success
has partly been based on superior order fulfillment, allied to a user-friendly
interface built around its patented 1-Click technology" and also came up with
kindle concept of having books online in a file form like pdf. a computed file
Using its unparalleled customer database that provides the most
comprehensive insight into consumer behavior, the company will need to
continue to anticipate and address those needs in a unique way before its
competitors
Competitive Forces in Amazon’s
Market
Price
Customer base
Distribution capabilities
Innovative technology
Reliability
Alliances
Brand recognisation
Products provided by Amazon…
“Retail”- books, software, consumer electronics, kitchen items, tools, lawn
and garden items, toys and games, baby products, beauty products, musical
instruments, groceries, scientific supplies, healthcare items
“Auctions” – Web Auctions Services
“Shops” – A fixed price marketplace on web
“Amazon Market Place” – Customer selling portal
“Online Music Store” – MP3 downloads without digital Rights management
“Amazon Fresh” – A grocery service offering perishable and non-perishable
foods
Services by Amazon…
Web auction service
Sold products under the name “PINZON” which was its own trademark. The
trademark made it clear that AMAZON was going to trade in textiles, utensils
and other household goods all by itself
Expanded its trademark in order to have a trading market share on a large
variety of items
Launched of its own music online music store by the name AMAZON MP3
Launched AMAZON FRESH wherein the company was to trade in various
PERISHABLE and NON-PERISHABLE items especially grocery items
Acquisitions
1997: [Link], a UK online book retailer, which became Amazon UK on October 15,
1998
1999: Internet Movie Database (IMDb)., Cambridge, Massachusetts-based PlanetAll, a reminder
service; Sunnyvale-based [Link], an XML-based data mining startup Alexa Internet,
[Link], and [Link]
2003: online music retailer CD Now
2004: [Link], a Chinese e-commerce website
2005: BookSurge, a print on demand company, and [Link], an eBook software
company. [Link] (formerly CustomFlix), a Scotts Valley, California-based distributor
of on-demand DVDs. CreateSpace has since expanded to include on-demand books, CDs, and
video.
2006: Shopbop, a Madison, Wisconsin-based retailer of designer clothing and accessories for
women
2007: [Link], a London-based digital photography review website; Brilliance Audio, the
largest independent publisher of audiobooks in the United States
2008: [Link]; [Link]; Box Office Mojo; AbeBooks; Shelfari (including a 40% stake in
LibraryThing and whole ownership of [Link], [Link], and FillZ); Reflexive
Entertainment, a casual video game development company.
2009: Zappos, an online shoe and apparel retailer
2010: Touchco., Woot , Quidsi, Buyvip
Partnership
With Google - Videos, pictures, maps, and information about the Surui, a
tribe that was garnered international attention for its battle against loggers
and its partnership with Google Inc., is available via Google Earth
With Esri - A flexible Esri managed environment for hosting your Web
applications and services on Amazon Web Services
With MasterCard – for free shipping
With Blue Mountain - The gift holders are free for both members and non-
members to send with the purchase of an [Link] gift card, while at
[Link]
With AT&T - Introduce Kindle with Global Wireless Coverage
Main competitor of [Link]
[Link]
[Link]
[Link]
Price [Link]
[Link]
Sam’s club
Local competitors are :
[Link]
[Link]
[Link]
Wal-Mart
Major Reasons for Ebay and Wal-Mart:
1. Brand name
2. Biggest share in C2C e-market
3. Organized retailing
Geographic Footprints
[Link] has offices, fulfillment centers, customer service centers and
software development centers across North America, Latin America, Europe
and Asia
Headquarters - located on Seattle's Beacon Hill. It has offices throughout
other parts of greater Seattle, including Union Station and The Columbia
Center
Software development centers – Seattle, Slough and Edinburgh (United
Kingdom), Dublin (Ireland), Bangalore, Chennai, and Hyderabad (India), Cape
Town (South Africa), Iaşi (Romania), Shibuya, Tokyo (Japan), Beijing (China),
San Francisco (United States), and Tempe, Arizona (United States)
Fulfillment and Warehousing – in North America (Phoenix and Goodyear, AZ;
New Castle, DE; Whitestown and Plainfield, IN; Coffeyville, KS; Campbellsville,
Hebron (near CVG), Lexington, and Louisville, KY; Fernley and North Las
Vegas, NV; Nashua, NH; Carlisle, Hazleton, Allentown, and Lewisberry, PA;
Dallas/Fort Worth, TX; Sterling), in Europe (England, Scotland, Wales, France,
Germany), in Asia (Japan, China)
Strategic Overview
Product: There is a humongous database of books available to customers; this is
one of the pulling forces of [Link]. Customers who are unable to find a
particular title in individual bookshops may end up using [Link].
Price: The prices are up to 40% cheaper than retail stores.
Place: Availability is impeccable with global reach.
Promotions: [Link] has unique contests for its users to induce them to
spend more time at [Link]. Further Amazon had tieups with AOL, Excite
and Yahoo
Problems facing by Amazon:
1. huge marketing and sales expenses that are bringing it harsh losses
2. an expensive and challenging task to re-package and re-ship the books to
customers
3. receive stiff competition from big retail chains like Barnes & Noble who are
entering the online market
4. not applying the integrated marketing approach which could have multiplied new
customers
Financial Statement
Financial data in U.S. Dollars
Values in Millions
Revenue – US $ 24.509 Billion (2009)
Operating Income – US $ 1.1.29 Billion (2009)
Net Income – US $ 902 Million (2009)
Total Assets – US $ 13.8 Billion (2009)
Total Equity – US $ 5.26 Billion (2009)
Employees – 31,200 (2010)
2009 2008 2007 2006 2005
Total Revenue
24,509.0 19,166.0 14,835.0 10,711.0 8,490.0
Gross Profit 5,531.0 4,270.0 3,353.0 2,456.0 2,039.0
Operating Income 1,129.0 842.0 655.0 389.0 432.0
Net Income 902.0 645.0 476.0 190.0 359.0
Business Model: The 9 Building
Blocks
Customer segments- who a company offers value to
Value propositions- company`s offer
Channels- how a company reaches its customers
Customer relationships- the relationships a company builds
Revenue Streams- how a company makes money
Key resources- what capabilities are required
Key activities- what activities are required
Key partners- the partners that leverage the business model
Cost structure- the cost of a business model
Amazon. com’s Business Model
Dealing with Price Competition
Provide EXCLUSIVENESS
Optimize fulfillment operations
Number of shipping companies
Stop
keeping
waiting
Meeting Peak Periods
Overstocking vs. Understocking
Rapid Growth in e-Retailing
Who shops Online
Drivers of store/site selection
Contacts
Jeffrey P. Bezos
President, Chief Executive Officer and Chairman of the Board
Jeffrey M. Blackburn
Senior Vice President, Business Development
Sebastian J. Gunningham
Senior Vice President, Seller Services
Andrew R. Jassy
Senior Vice President, Amazon Web Services
Steven Kessel
Senior Vice President, Worldwide Digital Media
Marc A. Onetto
Senior Vice President, Worldwide Operations
Diego Piacentini
Senior Vice President, International Retail
Shelley L. Reynolds
Vice President, Worldwide Controller and Principal Accounting Officer
Thomas J. Szkutak
Senior Vice President and Chief Financial Officer
H. Brian Valentine
Senior Vice President, Ecommerce Platform
Jeffrey A. Wilke
Senior Vice President, North America Retail
Jeffrey P. Bezos
President, Chief Executive Officer and Chairman of the Board
Tom A. Alberg
Madrona Venture Group
John Seely Brown
Visiting Scholar and Advisor to the Provost at USC
William B. (Bing) Gordon
Kleiner Perkins Caufield & Byers
