Submitted By – Gautam Rawat

Registration No.-11917698
Roll no. - A12 Section – Q1916
Submitted to – Poonam Mam
Course Title – Workshop on Creativity and Innovation
Course Code – MGN235

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Amazon.com
Amazon.com, Inc. is an American-based multinational electronic commerce company.
Headquartered in 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
Amazon.com, Inc. in 1994 and launched it online in 1995. It started as an online bookstore
but soon diversified to product lines of VHS, DVD, music CDs and MP3s, computer
software, video games, electronics, apparel, furniture, food, toys, etc. Amazon has established
separate websites in Canada, the United Kingdom, Germany, France, China, and Japan. It
also provides international shipping to certain countries for some of its products.
Amazon.com is the most successful e-tailer in the world. Innovative technology is the
backbone of the company's success. "Its success has partly been based on superior order
fulfilment, allied to a user-friendly interface built around its patented 1-Click technology" and
also came up with the kindle concept of having booked online in a file form like pdf. a
computed file. Using its unparalleled customer database that provides the most
comprehensive insight into consumer behaviour, the company will need to continue to
anticipate and uniquely address those needs before its competitors.

Goals & Objectives

We seek to be Earth's most customer-centric company, where customers can find and
discover anything they might want to buy online, and endeavour to offer customers the
lowest possible prices.

Vision Statement
Our vision is to be Earth's 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’.

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1. Alexa
Amazon is relying on open source innovation to build the capability of its cloud-based voice
service platform. The voice service is set to be the next biggest technological innovation that
will change the way we control devices, interact with machines, and handle information.
Amazon is providing an Alexa skills development platform for third-party developers to
increase the utility of Alexa and the consequent consumer benefits.

The next big shift in technology that will transform the way we communicate information and
interact with our surroundings, including smart objects within the internet of things (IoT)
framework, is here: The voice interface. Amazon’s Alexa, launched in 2014, is at the
forefront of the ongoing innovation. As a cloud-based voice service platform, Alexa powers
tens of millions of devices, both from Amazon (Echo, Fire TV, and Fire Tablet) and third
parties. This voice service is expected to become the central piece for e-commerce and smart
home technology.

In the future, people will mostly interact with the machine (computer) and the internet
(information) using voices as input. It is a most natural form of communication for humanity.
The Alexa technology has vast applications.

Outside developers have created more than 30,000 skills for Alexa, allowing the customers to
control more than 4,000 smart home devices offered by 1,200 unique brands. Because of the
sheer number of possible devices, not necessarily limited to home devices in the future, and
the possible skills (or applications, apps), Amazon has to rely on open source innovation to
ensure widespread adoption of the platform.

Purpose of Alexa
In the short term, because Amazon cannot solely rely on its internal resources to develop all
the necessary capabilities, it is relying on open source through collaborative communities and
crowd contests to enhance the capabilities of the technology. The resulting functions are
called “skills,” being equivalent to apps for Smartphone’s.

To generate interest for the rapid development of technology-intensive skills for Alexa,
Amazon organizes annual contests. This year’s theme was the improvement of human-AI
voice interaction through the development of a “SocialBot,” in which dozens of university
research teams participated. The total prize money was USD 3.5 million.

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Success & Stakeholders Benefit of Alexa

Amazon Echo family commands almost 72% market share of current U.S. smart speakers.
Loyal users will likely fill their houses with compatible devices. With a legion of connected
fridges, door locks, thermostats, lamps, and other appliances that may use Alexa Voice
Service API, the potential of Alexa brand market penetration is infinite. Amazon Echo
revolutionized how people interact with web content, commerce, and advertising. Some
experts predict that by 2020, 30% of consumer browsing will be conducted through voice
interfaces. They also expect the consumption of assistant-provided audio entertainment to
grow significantly. With ad-blocking being a significant issue currently, it’s good news for
marketers and brands.

People are open to receiving helpful and relevant information through voice assistants. A
study by the Interactive Advertising Bureau in 2016 showed that 65% of listeners were more
likely to purchase something they learned about from a podcast. 60% would prefer a brand
that is advertised on their favourite podcasts.
The way businesses connect with customers is changing too. Look at the voice shopping with
Amazon Echo, Echo Dot, Amazon Tap, Echo Show, Echo Spot, Echo Plus, Dash Wand,
Amazon Fire TV, or compatible Fire Tablet device. Prime members can ask Alexa to order
one of the millions of Prime-eligible products sold by Amazon. If they haven't purchased a
product before, Alexa may recommend some from Amazon's Choice list. The list includes
well-priced items highly rated by other shoppers. Moreover, Alexa can offer Prime members
exclusive deals and tell the user the price and how much they would be saving.

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2. Prime Air
Prime Air is a drone delivery service currently in development by Amazon. Operations were
expected to begin in select cities starting late 2019 however, as of December 2020; the
service has yet to materialize.

The service uses delivery drones to autonomously fly individual packages to customers
within 30 minutes of ordering. To qualify for 30-minute delivery, the order must be less than
5 pounds (2.25 kg), must be small enough to fit in the cargo box that the craft will carry, and
must have a delivery location within a 10-mile (16 km) radius of a participating Amazon
order fulfilment centre. The company along with Zip line, Wing copter, and 7 others was
selected by FAA to participate in a type certification program for delivery drones.
In 2013, Amazon CEO Jeff Bezos revealed plans for Amazon Prime Air in an interview on
60 Minutes. The Amazon Prime Air team worked with NASA and Single European Sky
ATM on trials using the Amazon air traffic management system. For additional safety, drones
will fly at low altitudes (below 400 feet). There are no roads or fixed routes so there are many
more options to get from point A to point B, that is why navigating a drone through the air is
very different than a car driving on a road. Amazon claims their traffic management system is
easy to use for various operators in the same airspace because it will connect via the internet.

Purpose of Prime Air

Traditional industry models for evaluating the economic feasibility of a product delivery
business model hinge on two variables: route density and drop size. Route density equals the
number of drop offs you can make on a delivery route and drop- size equals the number of
parcels per stop. Higher numbers of both are preferable.

Route density and drop size via Drone delivery could not be more inefficient as contrasted
with other distribution methods, e.g. FedEx, UPS. Nonetheless, Amazon has multiple
strategies for building a competitive advantage using Drones.

In the context of Prime Air, Amazon employs a focused differentiation strategy that targets
its post-sale merchant service and consumer product delivery offerings.

Through this innovation (only possible because of the company’s high tolerance for risk),
benefits can be realized in improved efficiency and responsiveness to customers. We believe
an added benefit from this strategy is to drive increased Prime memberships and loyalty. As a
long term strategy this may morph into a related diversification strategy, extending its drop
shipping and fulfilment services to include new offerings to third party merchants (such as
product return via drone or inbound warehouse stocking via drone).

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Success and benefits of Air Prime

How Amazon expects to account for the revenue needed to support this operation is a
mystery, but educated guesses can be made. Amazon already has an optional membership
club called Amazon Prime. With this entry fee of $99 per year ($49 for students after the first
6 months free), Amazon Prime membership includes free two-day shipping on all Prime-
eligible items, access to Prime Instant Video, unlimited photo library storage, Prime Music,
and the Kindle Owners’ Lending Library. If customers shop right, they may never have to
pay extra shipping costs with their Prime Membership. Customers also have another option;
buying over $35 worth of Amazon’s items earns them free shipping on their entire order. This
is a very economical choice for customers who do not want to pay for the Prime Membership
but still want free shipping. The last option is where customers choose to pay the standard
shipping rates, anywhere from $5.99-24.99, instead of a membership fee. In this last method
alone, Amazon assumes no cost burden for shipping its products. However, with the $35
bargain and Prime Membership, Amazon takes on some of the shipping cost and diffuses it
with either extra profit off extra items ordered or through the Prime Membership fee. This
demonstrates that Amazon is already taking on the shipping costs of its customers presently.
The drone system could alleviate some of this cost burden by generating its revenue. With a
cheaper delivery method available, Amazon has the potential to save on operational expenses
with the new drone system.

To generate the extra revenue to fund drone delivery, Amazon could simply increase their
Prime Membership fee or offer an additional Prime Air Membership to current Prime
members for the air-delivery service. Amazon could also make a separate Prime Air
Membership for customers who are not already Prime members. Another option would be to
charge a nominal fee per drone delivery or even per item delivered by drone. With this last
method, Amazon would be sure to cover costs of drone delivery with less assumed risk than a
membership fee.

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3. Kindle
Before the Kindle, e-books were stalling. Readers and content existed, but they weren’t
breaking through. Then Amazon gave people a quick, convenient and affordable way to get
books and the medium surged forward. By working to put a Kindle in the hands of as many
people as possible with a low price tag, Amazon took control of the e-book market becoming
the destination for purchasing content.

Kindle is designed from the ground up for reading. Amazon launched first the Kindle in the
UK in July 2010 with the vision of offering every book, ever written, in any language, all
available within 60 seconds. We spent more than three years building the original Kindle-a
first-of-its-kind portable reader that looked and read like real paper, even in bright sunlight.
Since then, we have introduced seven generations of Kindle e-readers, making them smaller,
lighter, faster, and even more like a piece of paper. Today, Kindle is available to readers all
around the world, and offers a vast selection of millions of books that you can download and
start reading in less than 60 seconds.

Purpose of Kindle

Amazon's early Kindle devices were overpriced and clunky. They had performance issues
and were disliked by many (including me). The Kindle data format, which was, at least back
then, fussy and arcane was far from unique. As previously mentioned, other comparable
eBook formats preceded the Kindle format.
An argument can be made that the innovation was all about Amazon's reach. By then,
Amazon's goal of becoming the "world's largest bookstore" had already been met. It made
sense, therefore, that if they were selling physical books online, which had to be shipped to
customers, that distributing books electronically was a cost-effective practice. But Barnes &
Noble was also powerhouse back then in book sales, and while the Nook made some inroads,
it had nothing like the staying power of the Kindle.

Amazon has its own Kindle devices, but its format runs on everything. Apple's does not.
Amazon has the readers. Remember Prime? The free prime lending helps as well. Amazon
has the reach and the customers. Buyers are used to going to Amazon for reading, so the
cycle perpetuates itself.

Amazon's innovation here was to combine vertical integration with the willingness to allow
users to read on whatever device they wanted to read on. Nearly my entire book library is
now on Kindle. Yet I don't personally use a Kindle device, because I still don't like them. I
like reading on my phone. Had Amazon tried for lock-in, which so many other vendors do as
naturally as they breathe, I never would have replaced my paper books with Kindle books.

As you think about moving into markets, remember the lesson of the Kindle. You can have
market dominance even if you don't lock your customers into your own devices.

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Success and benefits of Kindle

The Amazon platform has shaken up the publishing industry in the last decade. Rather than
accept the usual publisher royalties (on average 15%), authors can now choose to self-publish
on Amazon’s platform and keep all their profits sans Amazon’s 30% fee. This model seems
to work best for well know, established authors, but amateur authors can also take advantage
of the Amazon platform to self-publish books. Amazon’s platform and the user base behind it
is successful at continuously attracting publishers and authors, which in turn keeps the reader
base satisfied.

Kindle readers were in direct competition with the Barnes and Noble’s “Nook” and with
tablets as reading devices. In 2014 Barnes and Noble under-cut Kindle with a $20 discount on
the Nook tablet. IPad is also a strong competitor, as it is the leader in consumer value
perception, probably because its usability surpasses that of a reading device. Despite the
competition, Amazon aptly determined that the value to consumers is not in the hardware, but
in the platform. Amazon has since made the Kindle app available on the Apple App Store and
Android’s Google Play. The Kindle App makes Kindle e-books accessible via any Apple or
Android device.

So readers benefit from the variety of content offered by the significant number of publishers
in Amazon’s platform, and publishers and advertisers benefit from access to Kindle’s user
base. In the end Amazon has managed to bring together readers, publishers, authors, and
advertisers in a platform/environment that creates mutual value for all stakeholders and
allows Amazon to capture value for itself.

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Recommendations

1. Competing in the market:

Like past, Amazon in future will have to come up with special something. The global market
is changing day by day. Business competitors are investing large to take Amazon down.
There is no room for relaxation. It is very challenging and has to be consistent in the market
to be number one retailer shop.
2. Innovation of new Product:
It is essential for Amazon to think out of the box and bring new products to satisfy and retain
Customer to be loyal to amazon.com Amazon always offered its customer better quality and
Better service. But in future it may not be the same. People in today’s world ask for more.

Amazon has to be smart enough to understand the customer need before even customers
know about it.
3. Integration of New Technology:
Technology is making progress like the spread of light. Company like Amazon needs to be
Adaptive and technology friendly to retain its domination in the market. Amazon’s new

technology of Drone delivery system indicates it is planning and investing significant amount
of money in technology for near future.
4. Customer Loyalty:

For an upward revenue stream customer loyalty is essential Amazon’s most of the buyers are
its repeat customers who are loyal to Amazon. But growing competition can be a risk to
Amazon’s loyal customer.
5. Global Expansion:

Amazon is expanding its business around the world. But this may cause significant strain in
number of sectors like management, inventory, supply system and more over to Amazon’s
market place.

They said we may not be successful in our efforts to expand into international market
segment (annual report 2013)

International market is very challenging because of political and economic conditions.

Upgrading e-CRM and investing more towards customer information for better understanding
the customer needs and behaviour is essential.

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Conclusion

Amazon is a company that has grown exponentially from their e-Bookstore beginnings. The
internet boom certainly contributed to the success of Amazon. However, the company has
found ways to stay innovative and relevant; Amazon has used their internet marketplace to
help consumers and third party retailers buy and sell goods conveniently from the comfort of
home. The company has a goal of same day delivery that way buying something on Amazon
will have no drawbacks. They have already accomplished two day and same day delivery to
urban areas with their subscription based services. Amazon Prime Air will make it possible to
send items out of the fulfilment centre the same day without a third party delivery service
which will cut down on the time it takes for the consumer to start using the items that they
purchased. With the launch of Amazon Prime Air, the company will get closer and closer to
their goal of same day delivery.

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