Details about

AMAZON
Date of Submission
25/03/2021

Contents
Introduction
How Amazon is working
SWOT analysis
How its difference from another sites
Financial Position of Amazon

ACKNOWLEDGEMENT
I would like to express my special thanks
to my guide Prof Aaditi Banarjee for
their able guidelines and support in
completing my project.

Date Anmol Singh

25/03/2021 BBA 4
Amazon is an American multinational technology
company based in Seattle, Washington, which
focuses on e-commerce, cloud computing, digital
streaming, and artificial intelligence. It is one of
the Big Five companies in the U.S. information
technology industry, along
with Google, Apple, Microsoft, and Facebook. The
company has been referred to as "one of the most
influential economic and cultural forces in the world",
as well as the world's most valuable brand.
Jeff Bezos founded Amazon from his garage
in Bellevue, Washington, on July 5, 1994. It started
as an online marketplace for books but expanded to
sell electronics, software, video games, apparel,
furniture, food, toys, and jewelry. In 2015, Amazon
surpassed Walmart as the most valuable retailer in
the United States by market capitalization. In 2017,
Amazon acquired Whole Foods
Market for US$13.4 billion, which substantially
increased its footprint as a physical retailer.] In 2018,
its two-day delivery service, Amazon Prime,
surpassed 100 million subscribers worldwide
Amazon is known for its disruption of well-
established industries through technological
innovation and mass scale. It is the world's
largest online marketplace, AI
assistant provider, live-streaming platform and cloud
computing platform as measured
by revenue and market capitalization. Amazon is
the largest Internet company by revenue in the
world. It is the second largest private employer in the
United States and one of the world's most valuable
companies. As of 2020, Amazon has the highest
global brand valuation.

History
Jeff Bezos founded Amazon in July 1994. He
chose Seattle because of technical talent
as Microsoft is located there. In May 1997, Amazon
went public. It began selling music and videos in
1998, at which time it began operations
internationally by acquiring online sellers of books
in United Kingdom and Germany. The following
year, Amazon began selling items including video
games, consumer electronics, home improvement
items, software, games, and toys.
In 2002, Amazon launched Amazon Web
Services (AWS), which provided data on website
popularity, Internet traffic patterns and other
statistics for marketers and developers. In 2006,
Amazon grew its AWS portfolio when Elastic
Compute Cloud (EC2), which rents computer
processing power as well as Simple Storage
Service (S3), that rents data storage via the Internet,
were made available. That same year, Amazon
started Fulfillment by Amazon which managed the
inventory of individuals and small companies selling
their belongings through the company internet site.
In 2012, Amazon bought Kiva Systems to automate
its inventory-management business,
purchasing Whole Foods Market supermarket chain
five years later in 2017.
In January 2021, Amazon invested with over $278
million by opening two new centers in Italy (Novara
and Modena) and creating over 1100 jobs.
On February 2, 2021, Amazon announced that Jeff
Bezos would be stepping down as CEO and
transition to Executive Chair of Amazon's board in
Q3 of 2021. Andy Jassy, who is currently CEO of
AWS, will succeed Bezos as CEO of the company.

Mission of Amazon
Amazon's mission statement is to “serve
consumers through online and physical stores and
focus on selection, price, and
convenience.” Amazon's vision statement is “to be
Earth's most customer-centric company, where
customers can find and discover anything they might
want to buy online, and endeavors to offer its…
How Amazon is working
The way it work is: You send your products
to Amazon. They store them in their warehouses.
When a customer orders one of your
products, Amazon picks, packs, ships and tracks
the order for you. At Marketplace, sellers offer goods
at a fixed price, and at Auctions they sell their stuff
to the highest bidder. Amazon zShops features only
used goods at fixed prices. ... Sellers ship a number
of units to Amazon, and Amazon handles the entire
sales transaction from start to finish.
How its different from other sites
When people buy things, they
compare different suppliers on a ranked set of
factors. For Amazon customers those factors, or
customer purchase criteria (CPC), include price, fast
delivery and reliable service. Consumers
choose Amazon because it does better than its
competition on these CPC.
3 things which prove amazon is better
1) It has sustainable giving advantages
2) Worlds best founder
3) It bets on growth create big revenue streams
Amazon is the largest and most successful retailer
in the western world because they built
the best customer experience. Customers expect 3
core things when they buy products online: Large
Selection: Consumers always want to find the
product they are looking for and, of course, this
product should be in stock.

SWOT analysis of Amazon

Strength
1. Strong brand name – As a global e-commerce
giant, Amazon has a strong position and successful
brand image in the market. 
2. Brand valuation – According
to Interbrand’s Global Brand Ranking 2020, Amazon
is ranked at #2 position (Apple at #1 and Google at
#3), with a brand value of $200 Billion.
3. Customer oriented – Amazon caters to a large
number of customers for everyday needs
at inexpensive prices. This has made it a customer-
oriented brand.
4. Differentiation and Innovation – Amazon
frequently brings creative ideas and innovative
additions to its product line and service offerings
like ambitious drone delivery service and Withings
Aura Smart Sleep System.  This creates a
differentiation from other companies.
5. Cost Leadership – Amazon doesn’t incur costs in
maintaining physical retail stores by selling
everything online. With economies of scale, Amazon
efficiently controls its costs and lowers its inventory
replenishment time. The company has formed
numerous strategic alliances with many companies
like Evi Technologies, Thalmic Labs, Shoefitr, The
Orange Chef etc. It has a strong value chain system
which also helps in maintaining a low-cost structure.

Weakness
1. Easily imitable business model – Online retail
businesses have become quite common in this
digital world. So imitating Amazon’s business
model for rival firms is not so difficult. A few
businesses are even giving Amazon a tough time.
These include Barnes & Noble, eBay, Netflix, Hulu,
and Oyster etc.
2. Losing Margins in Few Areas – In few areas
such as India, Amazon has faced losses. It’s free
shipping to customers can be one of the reasons
that expose the risks of losing margins in some
markets.
3. Product Flops and Failures – Its Fire Phone’s
launch in the US was a big failure while its Kindle
fire device didn’t even grow well.
4. Tax Avoidance Controversy – Tax avoidance in
Japan, UK and US has sparked negative publicity
for Amazon. President Trump criticized Amazon over
taxes on social media.
5. Limited brick-and-mortar presence – Amazon
owns very limited physical stores. This sometimes
hinders to attract customers buy things which are
not sellable on online stores.

Opportunities

1. Amazon can gain the opportunity to penetrate or

expand its operations in developing markets.
2. By expanding physical stores, Amazon can
improve competitiveness against big box retailers
and engage customers with the brand.
3. Amazon has the opportunity to improve
technological measures and organizational
policies to reduce counterfeit sales. One case of
counterfeit sales came into light when Amazon sold
a fake My Critter Catcher. The product was sold for
$1 less than the original product.   
4. Can do backward Integration by expanding its
production of in-house brands such as Amazon
basics to differentiate its offerings and improve
profit margins. 
5. More acquisitions of e-commerce companies
can increase the company’s market share and
reduce the competition level.
Threats
1. Few controversies have caused a dent in
Amazon’s brand image. People critically reacted and
boycotted Amazon sites in 2010 when they found
that it’s selling the book “The Pedophile’s Guide to
Love & Pleasure: a Child-lover’s Code of Conduct.”
2. Government regulations can also threaten the
business proceedings of Amazon in some critical
countries. Amazon does not ship to Cuba, Iran,
North Korea, Sudan, and Syria.
3. Links to exploitative labor – Amazon is one of
three retail giants facing scrutiny from the US State
Department for maintaining supply chains and labor
sources associated with human rights abuses. This
exposes the ecommerce giant to reputational,
economic, and legal risks.
4. Increasing cybercrime can affect the network
security system of the company.
5. Aggressive competition with big retail firms
like Walmart and eBay can give Amazon a tough
time in the future. In addition, now Amazon
competes with the following companies:
 In Video Streaming Service: Apple
TV+, Netflix, Disney+
 In Logistics: FexEx
 In Self Driving Technology: Tesla, Uber, Ford

Financial position of Amazon

Revenue Total
Net income
Year in mil. Assets Employees
in mil. USD$
USD$ in mil. USD$

2007[138] 14,835 476 6,485 17,000

2008[139] 19,166 645 8,314 20,700

2009[140] 24,509 902 13,813 24,300

2010[141] 34,204 1,152 18,797 33,700

2011[142] 48,077 631 25,278 56,200

2012[143] 61,093 −39 32,555 88,400

2013[144] 74,452 274 40,159 117,300

2014[145] 88,988 −241 54,505 154,100

2015[146] 107,006 596 64,747 230,800

2016[147] 135,987 2,371 83,402 341,400

2017[148] 177,866 3,033 131,310 566,000

2018[149] 232,887 10,073 162,648 647,500

2019[150] 280,522 11,588 225,248 798,000

2020[151] 386,064 21,331 321,195 1,298,000

Amazon.com is primarily a retail site with a sales

revenue model; Amazon takes a small percentage of
the sale price of each item that is sold through its
website while also allowing companies to advertise
their products by paying to be listed as featured
products. As of 2018, Amazon.com is ranked 8th on
the Fortune 500 rankings of the largest United
States corporations by total revenue.
For the fiscal year 2018, Amazon reported earnings
of US$10.07 billion, with an annual revenue of
US$232.887 billion, an increase of 30.9% over the
previous fiscal cycle. Since 2007 sales increased
from 14.835 billion to 232.887 billion, thanks to
continued business expansion.
Amazon's market capitalization went over
US$1 trillion again in early February 2020 after the
announcement of the fourth quarter 2019
results. Amazon's total employees now number
798,000.

How Amazon is working

The way it work is: You send your products
to Amazon. They store them in their warehouses.
When a customer orders one of your
products, Amazon picks, packs, ships and tracks
the order for you. At Marketplace, sellers offer goods
at a fixed price, and at Auctions they sell their stuff
to the highest bidder. Amazon zShops features only
used goods at fixed prices. ... Sellers ship a number
of units to Amazon, and Amazon handles the entire
sales transaction from start to finish.
 Literature Review
Amazon structure
1. Hierarchical corporate structure. Hierarchical
structure at Amazon has developed due to the
immense size of the business. The largest internet
retailer in the world by revenue employs more than
647,00 people worldwide.
2. Flexibility of the business. It is important to note
that despite its large size, unlike many other
companies with hierarchical organizational structure,
Amazon remains highly flexible to adapt to frequent
changes in the external marketplace. Moreover, the
online retail giant leads changes in external
business environment, it has caused disruptive
innovation in e-commerce and currently it is about to
cause a disruptive innovation in global logistics
industry. This is mainly due to visionary and efficient
leadership by Amazon founder and CEO Jeff Bezos.
Amazon organizational structure integrates many
small teams that deal with various aspects of the
business. Amazon founder and CEO Jeff Bezos is
credited with the introduction of ‘two pizza rule”.
According to this rule, meetings should be held in
teams small enough that could be all fed with only
two pizzas.
3. Stability in the top management. Stability is one
of the key features of Amazon. Specifically,
the largest internet company by revenue in the
experiences “very little turnover among its most
important power players, with many of them having
been at the company for years, if not decades
Business Strategy
According to Amazon CEO Jeff Bezos, “Our customers
are loyal to us right up until the second somebody
offers them a better service. It’s super motivating for
us.” 1 That motivation appears to be fueling Amazon,
turning it into today’s largest online retailer. Since its
inception in 1995, Amazon has redefined the way
people shop, forcing other retailers to rethink their
marketing strategies in order to stay competitive and
maintain their share of wallet. Below, we dive into
Amazon’s general objectives, plans for this year — and
what retailers like you can take away to bolster your
own strategies.
Amazon operations
Amazon's Operations Technology teams are
the technical engines that support Amazon's
mission of being Earth's most customer-centric
company. We build the software and services
that touch every Amazon customer globally and
innovate solutions for logistics, supply
chain optimization, and transportation.
Amazon marketing
Amazon uses the high runner strategy to market its
products. This strategy uses data to uncover which
products are in the highest demand in every
category. Amazon's pricing algorithm then prices
those products competitively and bids heavily on
advertisements to pull people to these products.

Amazon Sales
The Amazon sales rank is a very good way to
estimate demand for a product. The better
the sales rank (a lower number = better rank),
the more sales it's getting on Amazon. New
sellers, as a general rule, search for products
with a sales rank lower than 5,000 or even
2,000.
Amazon Services
Amazon Web Services offers a broad set of
global cloud-based products including compute,
storage, databases, analytics, networking,
mobile, developer tools, management tools,
IoT, security and enterprise applications.
These services help organizations move faster,
lower IT costs, and scale.
Amazon Goal and Objectives
In a letter to shareholders, Amazon outlines
the four principles that guide the company:
customer obsession rather than competitor
focus, passion for invention, commitment to
operational excellence and long-term
thinking. In both their online and physical
locations, the focus is on selection, price and
convenience. One key differentiator? They
don’t stress about competitors as much as
they are hyper-focused on their customers.
Last year, Amazon’s retail strategy was
dominated by its acquisition of Whole Foods
and a nationwide search for a second
headquarters — all while continuing to focus
on increasing its customer base with both
online and offline shopping experiences.
Here’s an overview of Amazon’s strategy in
2019, and what retailers can learn.
Amazon Bookstores
The physical store format continues to be a
success for Amazon, seamlessly integrating
offline shopping with the benefits of
amazon.com. Inventory varies by location,
based on customer data, reading habits
and recommendations. In addition to
books, the most highly rated devices,
games and toys are also available for
shoppers to try out in-store. Another
unique Amazon marketing strategy? No
prices are displayed. Instead, shoppers use
their phones or in-store kiosks to check
prices, further enabling Amazon to learn
more about shopper browsing habits to
improve its product selection.
Grocery Shopping Options
Amazon continues their test, learn and pivot strategy
with grocery shopping and delivery service options,
believing that selling groceries to a customer is key
to selling them everything else. More importantly for
Amazon, the strategy further embeds their brand into
our daily routines.
Amazon Go, the first-of-its kind physical store
without cashiers or checkout lines opened after
extensive testing with Amazon employees, and
currently has 10 stores in three cities. Offering ultra-
convenience, the store sells grocery items and
prepared foods. Using advanced technology, items
are scanned and shoppers’ accounts are charged as
they leave the store with their items.
A future element of the Amazon business strategy
includes additional locations, possibly in airports.
Other retailers, including Kroger and Walmart, are
watching carefully, with many eager to tap into the
technology that lets shoppers purchase items without
waiting in a checkout line.
Amazon’s Whole Foods acquisition has allowed
the company to experiment with grocery delivery
services, offering discounts to Whole Foods
shoppers who have an Amazon Prime membership
and even selling Amazon devices inside the Whole
Foods stores. Future plans call for additional, larger
stores with space for more items and online order
pickup services.

Amazon 4-Star and Pop-up Stores

One of Amazon’s more recent brick-and mortar
ventures, Amazon 4-Star, is inspired by its
customers. The stores sell items rated 4 stars and
above, as well as new and trending items on
amazon.com. Prime members receive special
pricing, and customers who aren’t Prime
members can sign up for a 30-day trial to
instantly receive the amazon.com price in the
store.
Amazon’s pop-up store concept was created a
few years ago to give shoppers the opportunity to
test-drive and purchase devices and get advice
from Amazon consultants. This strategy has
allowed Amazon to blend online price with in-
store convenience in locations where consumers
are already shopping. Recently, Amazon
announced plans to close all of their existing pop-
up stores. The reason? Amazon now has the
capacity to leverage space in their Whole Foods
and Amazon Bookstore locations to promote
these devices.

Promoting products on Alexa

Nearly one in five U.S. adults today have
access to a smart speaker, according to
recent research. The concept of shopping
by voice brings new challenges to
advertisers who must find new ways to
get in front of these shoppers. The
Amazon business model in 2019
reportedly includes exploring the idea of
helping consumers discover new products
through ads as well as allowing companies
to target Alexa users based on past
shopping behavior.

Why Amazon Success

Loyalty Study Helps Explain Amazon’s

Success

If you didn’t already believe that Amazon is a

dominating force in today’s retail environment,
a Retail Customer Loyalty
Study from customer.com helps prove it. The report
asked consumers to list retailers they tended to
exclusively shop for particular needs. Amazon was
mentioned more frequently than any of the other
300+ businesses referenced in the study.
Statistics from the report also gave insights into why
Amazon is ruling the roost, and it comes back to the
retailer’s focus on the customer experience. For
example, consumers who favored Amazon cited a
convenient and positive shopping experience and
trust among the top factors driving their loyalty.
That shopping experience also helps Amazon attract
more “Loyalists” (shoppers who tend to stick with
one store for a particular need) than competing
mega-retailer Walmart.
The study also uncovered factors that can help any
retailer drive greater customer loyalty. For instance,
price is, not surprisingly, an important factor — but
receiving a good value and ease in making purchases
actually have greater impact for the majority of
consumers. In fact, if access, price and products
were equal, consumers say that a convenient
shopping experience and ease of making purchases
are the top two factors that would encourage them to
shop at one retailer over another.
1. Know thy customer.
In addition to understanding your
customers’ wants and needs, understand
what compels them to shop elsewhere.
Take that knowledge and put it into action.

2. Maximize data.
Take advantage of every touchpoint to
create a more personalized customer
experience. Leverage your customer
data to gather behavioral insights.
Reach out to other departments in your
organization for additional customer
feedback and data.

3. Get obsessive with customer service.

Start by building a customer-centric culture
from the top all the way down. Empower
your line associates. Stronger customer
connections will lead to more useful
feedback that helps keep retailers focused
on delivering what matters to customers.
4. Be innovative.
Test new ideas and don’t be afraid to
fail. For example, update design and
merchandise to attract customers or
embrace technology to provide better
service.

5. Create a comprehensive CRM strategy.

Integrate transactional, demographic and
behavioral data with the right systems and
technology to develop actionable customer
profiles. Use data and technology to add
value to the customer experience by
offering more personalized experiences.

Conclusion
Amazon is a company that has grown
exponentially from their eBookstore
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 fulfillment centre the same day
without a third party delivered services
which will cut down on the times it takes for
the consumer to start using the items that
they purchased. With the launchof Amazon
Prime Air, the company will get closer and
closer to their goal of same day delivery.

THANK YOU!