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Case Study Of
Submited To: Submited By:
Prof. Shama Saddaqat
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Muhammad ayaz Salamat ali Ahsan shamas Muhammad usman
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Type Public Founded Founder Headquarters Area served Key people
(Nasdaq: amzn) 1994 Jeffrey p. Bezos Seattle, washington, usa Worldwide Jeffrey p. Bezos
(chairman, ceo, & president), tom szkutak (cfo)
Retail Amazon.Com A9.Com Alexa Internet Imdb Kindle Amazon Web Services Dpreview.Com Javari.Co.Uk A2z Development
Revenue Operating income Net income Employees Website Alexa rank Type of site Advertising Available in Launched
Us$ 24.509 billion (2009) Us$ 1.129 billion (2009) Us$ 902 million (2009) 24,300 (2010) Amazon.com 22 E-commerce Web banners and videos English, japanese, german, french, & chinese 1995
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Amazon was founded in 1995, spurred by what bezos called "regret minimization framework", his effort to fend off regret for not staking a claim in the internet gold rush. While company lore says bezos wrote the business plan while he and his wife drove from new york to seattle, that account appears to be apocryphal. The company began as an online bookstore; while the largest brick-and-mortar bookstores and mail-order catalogs for books might offer 200,000 titles, an online bookstore could offer more. Bezos named the company "amazon" after the world's largest river. Since 2000, amazon's logotype is an arrow leading from a to z, representing customer satisfaction (as it forms a smile); the goal was to have every product in the alphabet. In 1994, the company incorporated in the state of washington, beginning service in july 1995, and was reincorporated in 1996 in delaware.
The company remains profitable: net income was $35.3 million in 2003, $588.50 million in 2004, $359 million in 2005, and $190 million in 2006 (including a $662 million charge for r&d in 2006). The firm's retained earnings were negative $1.8 billion in 2006, negative $1.4 billion in 2007, negative $730 million in 2008, and $172 million in 2009. revenues increased thanks to product diversification and an international presence: $3.9 billion in 2002, $5.3 billion in 2003, $6.9 billion in 2004, $8.5 billion in 2005, and $10.7 billion in 2006. On november 21, 2005, amazon entered the s&p 500 index, replacing at&t after it merged with sbc communications. On december 31, 2008, amazon entered the s&p 100 index, replacing merrill lynch after it was taken over by bank of america. As of march 26, 2010, amazon has a higher market cap than that of target corporation, home depot, costco, barnes and noble, and best buy, only lagging that of walmart among american brick and mortar retailers.
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The company's global headquarters are located on seattle's beacon hill. It has offices throughout other parts of greater seattle, including union station and the columbia center. Amazon has announced plans to move its headquarters to the south lake union neighborhood of seattle beginning in mid-2010, with full occupancy by 2011. This move will consolidate all seattle employees onto the new 11-building campus.
Books, music & movies Books Dvd Music Magazines & newspaper Amazon shorts Textbooks Unbox video Downloads Vhs Toys & videos games Toys & games Video games Consumer electronics Audio & video Camera & photos Cell phones & service Musical instrument All electronics Computer & office Computer & add-ons Office products Softwares Tools & automotive Automotive Industrial & scientific Food & household Consumer food Grocery Pet suupplies Home & garden Bed & bath Fresh flowers Furniture & décor Home improvement Clothing& jewelry Apparels Jewelry & watches Shoes Health & beauty Care Kids & baby Beauty Apparel(kids)
Kitchen&houseware Baby Outdor living All homes Sports & fitness Excercie & fitness Sports and outdoor
According to information in Amazon.com discussion forums, Amazon derives about 40 percent of its sales from affiliates whom they call Associates and third-party sellers who list and sell products on the Amazon websites. Associates receive a commission for referring customers to Amazon by placing links on their websites to the Amazon homepage or to specific products. If a referral results in a sale, the Associate receives a commission from Amazon. Worldwide,
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Amazon has "over 900,000 members" in its affiliate programs. Associates can access the Amazon catalog directly on their websites by using the Amazon Web Services (AWS) XML service.
Our businesses are rapidly evolving and intensely competitive. Our current and potential competitors include: (1) physical-world retailers, publishers, vendors, distributors,
manufacturers, and producers of our products; (2) other online e-commerce and mobile ecommerce sites, including sites that sell or distribute digital content; (3) a number of indirect competitors, including media companies, web portals, comparison shopping websites, and web search engines, either directly or in collaboration with other retailers; (4) companies that provide e-commerce services, including website development, fulfillment, and customer service; (5) companies that provide infrastructure web services or other information storage or computing services or products; and (6) companies that design, manufacture, market, or sell digital media devices. We believe that the principal competitive factors in our retail businesses include selection, price, and convenience, including fast and reliable fulfillment. Additional competitive factors for our seller and developer services include the quality, speed, and reliability of our services and tools. Many of our current and potential competitors have greater resources, longer histories, more customers, and greater brand recognition.
We direct customers to our websites primarily through a number of targeted online marketing channels, such as our Associates program, sponsored search, portal advertising, and other initiatives. Our marketing expenses are largely variable, based on growth in sales and changes in rates. To the extent there is increased or decreased competition for these traffic sources, or to the
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extent our mix of these channels shifts, we would expect to see a corresponding change in our marketing expense or its effect. Marketing costs increased in absolute dollars in 2009 compared to 2008 and 2007, due to increased spending in variable online marketing channels, such as our Associates program and sponsored search programs.
The International revenue growth rate was 31%, 33%, and 39% in 2009, 2008, and 2007. The increase in revenue in each year primarily reflects increased unit sales driven largely by our continued efforts to reduce prices for our customers, including from our free shipping offers, and Amazon Prime, and by increased in-stock inventory availability and increased selection of product offerings, as well as a larger base of sales in faster growing categories such as electronics and other general merchandise, increased in-stock inventory availability, and increased selection of product offerings. Additionally, changes in currency exchange rates positively (negatively) affected International net sales by $(174) million, $131 million, and $390 million in 2009, 2008, and 2007.
Amazon's initial business plan was unusual: the company did not expect a profit for four to five years; the strategy was effective. Amazon grew steadily in the late 1990s while other Internet companies grew blindingly fast. Amazon's "slow" growth provoked stockholder complaints that the company was not reaching profitability fast enough. When the dot-com bubble burst, and many e-companies went out of business, Amazon persevered, and finally turned its first profit in the fourth quarter of 2001: $5 million, just 1¢ per share, on revenues of more than $1 billion, but the profit was symbolically important.
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