Executive Summary

This paper briefly examines and analyse the internet retailer Amazon.com Inc by critically analysing the company‟s operation within e-retailing. Amazon is the leading global e-retailer an industry that registered a compounded annual growth (CAGR) of 24.6% for the period spanning 2004-2009 while the forecasts indicate the industry to grow at CAGR of 13.5 %. The external and internal analysis of the report reveals that there are numerous opportunities from which Amazon has been already profiting. It has performed well in the past year while strategically penetrating to Chinese market where it is forecast to register a growth of around 25% of revenue to $ 1 billion in 2012. Current strategies of the company are mainly based on growth and build strategies through more penetration in Chinese market and through Product development. The possible strategies that can be adopted without departing from current core strategies are also recommended at the end of this report.

Introduction ............................................................................................................................................. 1 Organisational Vision, mission statement and values ......................................................................... 2 Significant and Impact ........................................................................................................................ 2 External Environmental Analysis ........................................................................................................... 3 PEST Analysis .................................................................................................................................... 3 The Porters Five Force Model ............................................................................................................ 4 The SWOT analysis ............................................................................................................................ 5 Competitors Analysis .......................................................................................................................... 5 Market Survey..................................................................................................................................... 6 EFE matrix .......................................................................................................................................... 7 Internal Environmental Analysis ............................................................................................................ 7 Core competencies of Amazon ........................................................................................................... 7 Porter‟s Value Chain ........................................................................................................................... 8 IFE Matrix........................................................................................................................................... 8 BCG Matrix ........................................................................................................................................ 8 Financial Position of the company ...................................................................................................... 9 Goals and Objectives .............................................................................................................................. 9 Corporate Objectives .......................................................................................................................... 9 Business Objective ............................................................................................................................ 10 Functional Objectives ....................................................................................................................... 10 Current Strategies.................................................................................................................................. 10 Market Penetration strategies ............................................................................................................ 11 Acquisition Strategy: ........................................................................................................................ 12 Market Development ........................................................................................................................ 12 Product Development........................................................................................................................ 12 Diversification strategies: ................................................................................................................. 12 Problem and Issues ............................................................................................................................... 12 Recommendations ................................................................................................................................. 13 Option 1. Product development of e-books by taking spoil of vacancy that will be created by Borders bankruptcy ........................................................................................................................... 14 2- Product Development of e-books segment by launching Kindle tablet ........................................ 14

3 Market Development through Social Networks ............................................................................. 15 Option 4: Market Development by forming strategic alliances with Chinese e-retailers ................ 16 Option 5. Market development by entering to the market of India and Middle East: .................... 16 Selection of strategies ....................................................................................................................... 17 Operational and Strategic objectives................................................................................................. 17 Implementation and controlling of Strategies ................................................................................... 18 Strategic Annual Action Plan ........................................................................................................ 19 Conclusion ............................................................................................................................................. 19 References ............................................................................................................................................. 21 Appendix 1 ............................................................................................................................................ 23 Appendix 2 PEST Analysis...................................................................................................................... 25 Appendix 3 ............................................................................................................................................ 28 The bargaining power of consumers: ............................................................................................ 29 The bargaining power of suppliers: .............................................................................................. 29 The threat of new entrants:............................................................................................................ 29 Threat of Substitutes: .................................................................................................................... 30 The intensity of Rivalry: ............................................................................................................... 30 Appendix 4 ............................................................................................................................................ 31 Appendix 5 EFE Matrix ......................................................................................................................... 32 Appendix 6 IFE Matrix ........................................................................................................................... 33 Appendix 7 Porters Value Chain of Amazon ......................................................................................... 34 Appendix 8: Quarterly Income Statements of Amazon ........................................................................ 38 Appendix 9 Ansoff Matrix ..................................................................................................................... 40 Appendix 10 Space Matrix .................................................................................................................... 41

Introduction

History, Background and Development Only a handful of people can recall a company named Cadabra.com. Cadabra.com is nowhere to be seen now. However the company that began its operation in a garage with few desks built out of doors under this name, Cadabra.com, is now the largest internet retailer (eretailer) in the world. Cadabra.com renamed as “Amazon” hinting the voluminous of the company. The amazon.com Inc was founded by Jeff Bezos in 1994 and the online web site was launched on 1995. An online book store was a new idea he proposed to his former employer who ridiculed the proposal. But Jeff Bezos was convinced of the potential of such a business with the pace of internet growth which was at 2300% a year at that time and being as opportunist, with high entrepreneurial skill, he sat the perfect company by his own. The company started strategically with the vision of Bezos that it had used tactics to enjoy economies of scale from the initial stages of the company. Its cost of sourcing, transporting and selling were reduced from strategic location it chose by settling at Seattle where world‟s largest wholesalers of books were based. It also enjoyed lower sales tax in the Seattle which was translated to lower prices of books it sold. For the last 16 years the company has evolved at a high growth pace to become a mega company by adopting product development by horizontal and conglomerate diversifications. developments, and acquisitions of the Amazon. Figure 1 shows the historic growth,

Figure 1; Development of the Amazon.com Inc; the company had been carrying strategic acquisitions while developing own additions (spinoffs) to the product portfolio. The company has invested in Livingsocial as part of its strategic interest in this company.

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to build a place where people can come to find and discover anything they might want to buy online. hardware. It has been one of innovative company with a large investment in Information Technology research and development which has been the key to be successful to maintain the customers‟ loyalty and maintain winning strategies in a largely dynamic market.com bubble and grow at unbelievable pace. Invent and Simplify. Significant and Impact Amazon has been and is the largest e-retailer in the world and in US by taking advantage of first mover to e-retailing. Much of these high quality services have to do with the companies vision/mission and goals Organisational Vision. Page 2 . That is it believe employees are Amazon leaders whether an employee is an individual contributor or a manager of a large team in the organisation. higher and Develop the Best. “Are Right. This strategy enabled it to lower costs further as it allows the company to maintain physical stocks minimal. and even groceries.” In order to achieve this it has set goals of being innovative on behalf of customers and to build a store for each and every customer by offering personalized products. A lot”. Ownership. mission statement and values Amazon.The company made another strategic move from very start of its diversification strategy by establishing partnership with wholesalers.com vision and mission is combined “to be earth‟s most customer-centric company. electronics. The diversification strategy brought new business lines to make the company an online superstore with products ranging from DVDs. Appendix 1 provides the details of these principles which include Customer Obsession. The company has grown at tremendous pace in the past few years to which large credit has to be given for the customer-trusts-lead growth achieved through high quality services. Amazon has set standard values for customers and employees. The company has given the reasons for traditional retailers to introduce internet retailing to the portfolios. The company has been enjoying customer base growth and increase in repetitive purchases by same customer. video games. It grew from nowhere to register nearly 100 billion year turnover in barely 16 years. The innovation of the company has made the company to survive from dot. The company has leadership principles that every Amazonian has to adhere. music CD‟s. Insist on the Highest Standards. computer software.

Economical. Technological. factors like economic downturn and growth. Stonehouse. Economical conditions: With the unstable economy. 2007) Changes in the components of these factors may have varying affect to different industries depending on the association with those components to a particular industry. The External environment mainly consists of General Environment and Operating environment. The table in the Page 3 . The General Environment for Amazon will be Global Political. The appendix 2 provide a summarised PEST factors components which will affect Amazon. PEST Analysis PEST factors are generic factors that will usually affect all business across industries. & Houston. Changing components of these factors that have direct impact on internet will be more influential to e-railing businesses like Amazon.com success in these regions.com among others in e-retailing. Social. Changing regulations and policies towards internet influence the Amazon. exchange rates. Ecological and Legal Environment as it operates globally every major corner of the world. Political Factors : Operating in internet globally covering customers in more than 150 countries mean the company has to deal with many stable and unstable political conditions including developed and developing countries. In the process of PEST analysis it is important to explore and understand the relationship between the forces at work.External Environmental Analysis Environmental analysis is the study of the organisational environment to pinpoint environmental factors that can significantly influence the organisational operations (Samuel & Certo. The PEST analysis model is used to analyse the environment and the Operating Environment is analysed using Porters Five forces. I want to discuss the possible components in these factors that would influence the Amazon. unemployment in many parts of the world affect the purchasing power of potential consumers of Amazon and effect firms cost of capital.com than other firms which are not directly engaging in e-business. 2009).com. The factors outlined here represent general PEST forces summing up all the regional market factors where Amazon has its presence. (Campbell.

ethnic and other aspect of social factors‟ representation amongst internet users will guide Amazon on strategic portfolios it has to develop in order to capture more market share. The table below is a summary of the threat level of Porter‟s Five Forces to Amazon. The growth of the e-retail industry increasing and sales remained significant despite growth deceleration amidst the recent economic recessions in major markets in the world. We also need to understand the industry‟s environment which Amazon is operating. and also will affect outsourcing decisions of Amazon. Power of these factors are analysed in detail in Appendix 3 for the Amazon to understand its power relative to other forces in the industry. Page 4 . so this is another problem that Amazon needs to look at being the Global leading e-retailer. Social conditions: The gender religious. Porters Five Force model suggest that an industry‟s attractive will be determined by five alternative forces and it‟s the relative power of those forces that will determine the success of a business organisation. In terms of these factors Amazon need to be on top to make difference as most of IT R&D has been the major factor responsible in growth of internet business which is a key success factor of Amazon in the past. Technological conditions: Technological factors can reduce the barriers for new entrants. For this we can user Porters Five Force to understand immediate implications to the company. rate of technological change like increase in growth of internet technologies and mobile networking throughout the world.appendix 2 explains these factors. These are never stable. It is also important take advantage of increasing use of social networking as mean of interacting with friends and family. phenomena most of America Europe and Asia Pacific region has been experiencing in the past 5 years. These factors can include R&D activity. The Appendix 2 gives the gender and other social factor representations in American internet users. The Porters Five Force Model The global e-retailing sector will be analysed here considering internet retail market players in this case.

and with diversification of its product line it has become the "Earth's biggest anything store".com. Amazon.com and online auction house ebay. Meanwhile the international business in the last two years has more than doubled. The following are the major industries that Amazon conducts its operations.com objectives need to align with the SWOT in making sure that the objectives we set are attainable and realistic. The competitors have expanded from just online book retailers from the start to top audio retailers CDNOW.Five Forces Bargaining power of supplier Bargaining power of consumer Intensity of Rivalry Threat of new Entrants Threat of substitutes Threat level Moderate Moderate Moderate High Moderate The SWOT analysis SWOT analysis is a planning method which is strategic and which also helps to assess the strengths. weaknesses. The Appendix 4 analyse the SWOT of Amazon which highlight the position of the company both internally and externally.       Internet Retail Business Services Advertising & Marketing Commercial Printing Copy Centres & Online Printing Services Media Page 5 . opportunities and threats involved in an organisation. Amazon has an overall lead of 40% market share against the other online retail firms in the United States. Competitors Analysis Due to the shift of focus for Amazon. It projects the internal and external factors that are favourable or unfavourable for a future project.

and other traditional retailers. The future of the internet retail market is promising even though the growth is forecasted to be decelerated anticipated CAGR of 13.2 .(newsweek.com Inc as the largest e-retailer globally shared up to 5.6% for the period of 2004-2008. Being the leader in e-retailing market is not satisfying given the fact the traditional retailers remain major competitors as the presence of shops in every corner in larger cities create huge challenges to the businesses in internet business and vice versa. For example although retail business is not the same as internet retailing it is a competing industry to internet retailing industry.One thing in common in all of these industries is that all these business are related to internet in the way it is conducted. But for the purpose of this assignment I will consider the Internet Retail industry and as it is closely related to all other services it is offering.6% of the global internet retail sector value and by geographic segmentation USA was accounted for more than 59.5 billion in 2008 which represented compound annual growth rate of 24.com. e-Bay. China is another potential market for Amazon which according to a analyst from Goldmen Sachs Amazon will increase market shares by recording a growth of more than 25 in the next three years. According to this research the global internet sector has generated total revenue of 352. Of this value by product segmentation the market for electrical and electronic segments accounted for 24. 2011) internet retail sector was forecast to have value of $613. (Datamonitor 2009). The research used the total revenues generated through sale of retail goods via online channels value at retail selling price excluding the ticket book and online corporate purchasing and online auction transactions using an exchange rate constant at annual average exchange rate. 2010) Page 6 .5% until 2013. Amazon.3 billion in 2013 an increase of 88. Thus major global firms in retail industry with substitute product lines become direct rivals. According to the research global i (Duryee. Dell.6% from the value of 325.5% of the global sales during that time which is forecasted to be maintained throughout this same period.5 % of the internet retail sectors‟ value. Barnes and Nobles and Borders. The main competitor of Amazon thus includes Wal-mart. Market Survey The Datamonitor a global research firm has done a market survey in 2009 on internet retail industry.

These core competencies are the result of its internal Strength which is analyzed in the SWOT in the Appendix 4 Page 7 . Internal Environmental Analysis Core competencies of Amazon Every retailer does understand that selling is all about product and good value. This allows Amazon to understand customer needs by analyzing the data in business intelligence systems allowing the company to be ahead of customers. Amazon has data base where customer‟s histories are being kept from records of past purchases and trends of customers purchases.82 as shown in the Appendix 5 which is above the average meaning the company‟s ability to respond to external factor is above average or can say strong in other terms. Amazon has ability to manage for changes in the tastes of customers providing customers “anything they might want to buy online”. something all retailers are providing. The factors in this matrix are found from SWOT analysis and this tool helps us to rank the factors that have been identified in the SWOT analysis in Appendix 5. The EFE matrix for the Amazon has calculated value of 2. delivering guaranteed long term satisfaction to customers. Amazon understands that offering a great product at a great price no longer suffices to gain and keep customers. For this reason providing good value has ceased to qualify as a differentiator. The core competency of Amazon lies in its ability to provide good value services with unique and addictive experience. a company like Amazon which has been providing superior customer services. Amazon customer can undoubtedly for any reason. 2010) Amazon has been able to turn its mammoth selection and super-rapid delivery into unique experience. for a one-year period.com is facing.EFE matrix The External Factors Evaluation matrix is used to audit the current business external conditions. return any purchase to get a full refund. It is used to visualize and prioritize the opportunities and threat that the Amazon. without any hustle and shipping cost. (ebcohost. Amazon has super customer intelligence systems to identify customers requirements based on the browsing histories and searches of the customers. Amazon has enhance this value by creating synergy with the acquisition of Zappo.

This is shown in the Appendix 7.com in main eretailing markets. The focus of the company is sourcing and distributing the products to consumers and thus the investments are geared towards warehousing in key high demanding geographical locations.98 as shown in the Appendix 6 BCG Matrix The Boston Consulting Group Matrix has been used to analyze the main business position of the Amazon. marketing. distribution and after-sales Services. IFE Matrix The Internal Factors Evaluation matrix is used to assess the internal strength of the company. The company has been able to reduce external failure rate which is one of core in forming Amazon‟s value chain.com is facing.Porter’s Value Chain The value chain of the Amazon consists of Purchasing or sourcing. The factors in this matrix are found from SWOT analysis and this tool helps us to rank the factors that have been identified in the SWOT analysis in Appendix 6. The market of United States which has the highest growth and in fact the highest highest competition requirement and for innovations is categorize as Page 8 . It is used to visualize and prioritize the strengths and weakness the Amazon. The IFE matrix for the Amazon has calculated value of 2. This has been paying off to the company by forming an efficient delivery and distribution system of products to the consumer around the world.

Strategic or long term objectives of Amazon will represent the most important level of decision making which need to be set by senior management or board of Directors of Amazon. Objective of a business can be both short term and long term. This has been due to the fact that it has becoming a strong player in Chinese market (newsweek. But in this appraisal I will concentrate more on longer term objectives of Amazon as they are the strategic objectives of the company. thus Amazon can still rely on those markets to convert them to Cash Cow in future. Page 9 . 2010) Goals and Objectives The term Objective is defined by (Campbell et al.the STAR where the company has been enjoying greater market share than the nearest rival in the market. 2007) as the state of being to which an organisation aims or purpose and it is the end to which strategy aims. The long term objectives of the Amazon will derive its strategies in the future where the general corporate objectives which need to be set by the top management have to be broken down to Functional and Operational levels in order to achieve those objectives. These categories therefore fall into CASH COW.com. Chinese market on the other hand which is dynamic and has large growth pace is considered in a position of question mark. Corporate Objectives The company currently has the following Objectives. According to Business Week (2010) the electronics sales in China has raised forecast for Amazon‟s compounded annual growth rate for revenue in 2010-2013 to 25 from 22 percent. Financial Position of the company The company financial position has been strong despite its high gearing ratio. Germany and united kingdom it has been also maintaining highest market share but the growth is not up to the level it requires dynamic changes in the way of competing in the industry unlike in US. in Europe mainly in France. Appendix 8 shows the Amazon‟s Quarterly Income Statement which shows strong performance despite fluctuation in revenue in the past four quarters the company published. Japanese and Canadian market share and the market itself are growing. Increase global market share to 10% by the end of 2013 Increase revenues by 30 % every year.

To acquire Borders books store chain which is under huge financial burden Functional Objectives Provide marketing mix that enables to sell the new Kindle at a price in the range of 500 to $830 depending on Wifi.Decrease cost of selling per customer by 5% by the end of 2012. Likewise all the functional departments and operational department need to set own goals and benchmarks and make sure to attain that target which will ultimately lead company to fulfil its corporate level targets. Fast. France and Germany from Europe. Thus with the level of hierarchy the lowest level of objectives becomes short term objects. They are United Kingdom. 3G and Memory Amazon aim to achieve 80% and 60% of customer awareness of Kindle tablet in United States and international (other global) markets respectively Current Strategies Page 10 . Business Objective To introduce at Kindle tablet to offer services of Kindle more than just video. music and books. International chain has been extended to six countries.    earn customer trust through low prices. vast selection of product and . which should be translated into immediate or current actions and targets. Pricing Objective. The short term objectives are derived from long term objectives. Become major player in Chinese market by the end of 2013. In order to achieve corporate level objectives each individual location has to set their own targets and objectives. China and Japan from Asia and the neighbouring Canada. convenient delivery Amazon report its financials with two divisions the USA and the International.

Loyalty programs and expanding products and serives with existing clients.the determination of the basic long-term goals and Objectives of an enterprise and the adoption of courses of action and the allocation of resources necessary for carrying out these goals”. market development and product diversification. The calculated result of EFE and IFE Matrix is 2. Page 11 . Ansoff Matrix in Appendix 9 indicates that the Amazon can focus on all four type of strategies growth. Market Penetration strategies Amazon focuses on selling more of existing products in USA and China with innovation and cost effective methods which can be risky.98 respectively. The matrix identifies the competitive positions of the company. Similar strategies are the result of SPACE matrix (calculation is shown in Appendix 10). Professor Chandler of Harvard Business School in 1962 has defined Strategy as: “.82 IFE 2. This suggests the company should focus on in increasing market penetration and product development.. (see Appendix 5 and 6) The result suggests Amazon to hold and maintain its position. The current different focus areas of Amazon include Advertising programs.The long term Goals and Objectives of Amazon is the key to formulate the business strategies. This matrix is an analytical tool to determine the type of strategy the company should undertake. Amazon in past year or so has been developing key strategies that will keep its market share and maintain competitiveness in the market. As shown in IE matrix the company should focus on strategies for the growth of the company.. product development. Different writers have put forward different definition of the word strategy.

Free shipping to strengthen business could be a major problem in the long run. Amazon‟s value chain analysis indicates that its operating margin has been very low while it has been continuously lowering the prices or offering free shipping to its customers to maintain the competitiveness in the market. The digital media industry is most volatile in industry in terms of technological changes the company is required to carry on continuously which could affect Page 12 . package and product. The company operate in rapidly evolving and highly competitive segments where competition from physical world retailers is one of the major forces against the Company. The major competitors also include indirect competitors like media companies. Market Development The focus has been on selling existing products to India and Middle East via strategic alliances. The company has been able to maintain this market growth through Acquisition of innovative companies. web portal and search engines in web. Declining operating margins reflects a weak cost structure and ineffectiveness in Amazon‟s pricing strategy. Problem and Issues From SWOT and the PEST analysis I have discussed number of problems Amazon face in the current business environment.Acquisition Strategy: Amazon has been one of the few companies which have been growing at the same pace as market growth by taking advantage of its position of the industry as leader. Product Development This strategy concentrate on developing and introducing new products in existing markets which is more disadvantageous to Amazon due risks associates with introducing new products to market where there is high intensity of rivalry. This is riskier than penetration which includes new channels new packing and new area development programs. This strategy has been the most risky in the past given the fact that it requires good market intelligence in determining right techniques. Diversification strategies: This includes changing current marketing mix of 4 p‟s place. price.

The SPACE model in Appendix 10 suggests the company to undertake strategies that are aggressive in nature. Recommendations Amazon has been enjoying strong market share in e-retailing. From Porter’s Generic Model the company can adopt Differentiation by emphasising on delivering completely unique product to the consumers. In this section I suggest strategies that Amazon need to follow in building the company larger. The core competency of the company and its external market and internal environment has been positive and it is where it can address key issues and the problems. Amazon. Globally competition from Chinese vendors and e-retailer has been one of key area Amazon needs sorted out in order to settle in the e-retailing for the long run . It is a segment which Amazon does not have the first mover advantage and the reputation of Chinese counter parts are quite positive due to cultural influence in this part of the world. Smart phone has never been better with different applications via internet that is adversely affecting the Amazon‟s business worldwide. Company needs to tackle the competition from Barnes and Noble and Borders with strategic moves to overcome disadvantage it faces in dealing with traditional method of selling books.the operations of Amazon. Page 13 . The following strategies are the available options for Amazon base on the IE Space and Ansoff matrix that were discussed in preceding chapters.com inc is moving towards right direction and should aggressively adopt development of market and product strategies that are currently being formulated by the company. That is some digital cable providers and internet providers are offering Video on Demand and technologies have been developed by other companies such as Apple with iPad and Apple TV allows alternative means for consumers to receive and watch movies. Product differentiation is the process and where a product is converted to more appealing to consumer through addition or creation of new features. This is also supported by the IE matrix which suggests growing and building.

Amazon can expect to give more problems to Borders remaining shops and may effectively take over Borders in the future at the same time generating a product notoriety and brand loyalty Arguments Against:  It Increase costs for the company to maintain the competition within the market place.Option 1. 2. Nobles and Barnes. This leaves good growth opportunity for other book retailers in market especially for Amazon to increase market for e-books. Argument for:  With the SWOT strength of being largest retailer of e-book Amazon can emerge successful from the competition by keeping as many books as possible out of competitors‟ hand through existing publisher‟s network. Product development of e-books by taking spoil of vacancy that will be created by Borders bankruptcy The Borders book store is under huge financial burden and has already filed for bankruptcy to close 200 stores on 22nd of July 2011. Page 14 . Sony. Amazon‟s Kindle. He said the bankruptcy was essential to restructure its debt. (Borders files for bankruptcy. As it was highlighted by Borders President Mike Edward. has maintained its popularity for “real look” of a book with intensity and crispness of its screen. Even after the introduction of new tablets and book readers from competitors like Apple. the highly rated unique book reader. 2011). and will require further investment when it already have high gearing that is going to be costly as price of raising new debts will be higher. This will help gain more competitive advantage over traditional sellers like Barnes and Nobles and Borders itself.  Arguments for adopting this strategy.Product Development of e-books segment by launching Kindle tablet Kindle has been successful in the past years with different stage of developments since 2007. to close 200 stores . the reason for his chain‟s bankruptcy was due to insufficient capital resources to be a viable competitor.

 User profiles in these networks could be used for to advertisements and with a click of a button can be directed to the applications from which purchase can be made and users can comment on the products being sold in Amazon market place. Kindle can look forward for Anroid Operating System for this new tablet instead of building its own. The PEST analysis in Appendix 2 explains this changing trend in every corner of the world. (New York Times. 3 Market Development through Social Networks Google+ is the last addition of the social network market which is currently under construction. Arguments for:  Social Networking is new way of social gathering which has been changing the way people socialise in highly changing cultural attitudes nowadays. The beta version of this network has 6 million member in 6 months even with the restriction it has places on new users to become member. 2011) Argument Against:  Affiliating with a company like Google for OS can be dangerous in future as it would expose some of the weakness of the Amazon in e-retail market to a indirect competitor who can have possible concentric diversification to compete Amazon in future. It is a major risk that if Amazon builds its own platform for the new tablet as there may not be enough applications from developers as there is already quite a competition from Apple‟s iOS and Google‟s Anroid OS applications developers. Page 15 . Amazon can allow users to create list that they would wish to buy from online retailer where these would be shared among social network. This would involve creating applications for the social networks where digital media such as film mp3 and e-books could be sold. Amazon has been working on strategy of developing its presence of digital media in social networks including facebook and twitter. Arguments Against:  To use social network facilities already existing could be boost for these companies to indirectly and directly compete with Amazon at the end as for these social networks Amazon‟s core businesses are areas where these companies can make centric diversifications.

2010) Arguments for:  The PEST analysis has shown that the external environment indicates ever increasing attractiveness of the Chinese market which Amazon can take advantage out of careful and strategic alliances.Option 4: Market Development by forming strategic alliances with Chinese eretailers Chinese market is the segment which Amazon need to exploit in order to maintain and grow current market share which has high prospectus of growing in the future. 2011) Arguments for: Page 16 . Ability  With strategic alliances and investment on human resources from China Amazon can penetrate more into Chinese market. Chinese have different culture and socio-political environment where internet contents are filtered by authorities. Option 5. Lately the internet usage in India has been rapidly growing while business. (newsweek.com bubble burst this was the main cause funding sources which is no longer a problem and Indian e-commerce is playing catch up and already has positive signs of growth in e-retailing (Dharumakumar. Amazon at the moment does not have technical to match Chinese counterparts in marketing products to China.com. Market development by entering to the market of India and Middle East: Affter the crash of Nasdaq on 2000 which ended an era of high growing Indian internet companies that begun in late 1990‟s the new ways of e-retailing shows sign of resurging internet businesses in India. when Indian companies hit hard during dot. Argument Against:  Traditionally Chinese consumers have proven to have different preference and tastes of products which could easily be met by Chinese vendors.

These criteria help us to justify why some strategies might succeed better than others (Johnson et al. These strategic options can be evaluated against a set of criteria including suitability. costing and timely plans of what the organization will do to meet each strategic goal. 2011) Selection of strategies Since all of these are mutually exclusive for Amazon. Therefore it is selected amongst all others for the reason all of these strategic investments are mutually exclusive given the financial constraints of the Amazon.com bubble in 2000. Operational and Strategic objectives Operational objectives are detailed. 2005). a project that has increased number of service provides and reduced the price of internet (datamonitor. 2009) Arguments against:  Internet contents are highly filtered in Middle Eastern countries where as Indian companies like Letsbuy. feasibility and acceptability. In the PEST analysis it has revealed that the new e-retail market can be develop in the Middle East countries where as India‟s economy has been growing even when the recession were hit in most of the countries in past two year  Indian government has been targeting to increase number of users of internet users to 3 million from 2007 onward. They set out a work plan for the organization. (David. Page 17 . 2006).com due to its high gearing ratio of 69% the company need further assessments on choosing the best strategy amongst these five options. usually for the short run over a twelve-month period.com has been enjoying first mover advantage in Indian market after initial starters collapsed during dot. The Appendix 11 shows the evaluation table from which the option two has the highest score. (Dharumakumar. based on the selection process in Appendix 11 Amazon can set the following Operational Objectives. With the selection of the strategic option 2.

Page 18 . The compensation R&D and Amazon has reputation of offering highest incentives in the industry coupled with a fair appraisal system Bezos has been excellent innovator who many consider as Entrepreneurial leader The work culture It is a go-go-go culture. Anroid Market. Key component Amazonc's Approach Implementing Strategy The organization structure Amazon has a flat structure The system of allocation of Resources are centrally allocated resources: the The kinds and levels of have possession of best technology in the industry through technology available.  Release Kindle Tablet to the Market in third quarter 2012. Implementation and controlling of Strategies In order to implement these and other strategies Amazon should manage the following factors properly that will be key in successful implementation of any business strategy. These include. dog eat dog world at Amazon interview process is gruelling but fun The managing change The Managing conflict Change management is part of Amazon culture Conflict Management is procedural appraisal system The leadership In order for the smooth implementation and achieving the targets one basic tool the company could have is SAAP among other thing like KPI. before end of 2011. Release Beta version of Kindle Tablet in Chinese market with disguised as Chinese (reversed engineer) fake Kindle Tablet in the First quarter of 2012 to get market feed back  Break a deal with Google to establish a specific sub segment for Kindle tablet applications in google‟s application store. Financial Ratios etc.

Conclusion Amazon. The appendix 12 shows the SAAP plan to implement and launch the product by end of 2nd quarter of 2012. The company should in my view take full advantage of the downturn of Borders and prevent Barnes and Noble to take all the spoils from the failure of this Giant book retailer.com. 2010) The company targets to grow revenue by 30 percent each year. The company has been competing with free offerings of many services to consumers including free shipping. the two segments that are forecasted to have significant impact in the long run in e-retailing industry. This includes targeting more investment in China which has already shown signs of growth by beating expectations. With efficient management of downstream. operation and upstream through innovative technologies and marketing innovation the company has been able to offer cheaper price to consumers. The company has improved forecasted growth rate in Chinese market of 25% from earlier rate of 22% this year from Goldmen Sachs ( Newsweek. The company‟s core competencies include innovation and customer centric quality services.com and other regional web sites.Strategic Annual Action Plan In order to achieve the operational objectives outline above and to achieve the objective of releasing the Kindle tablet in 2012 we have to formulate the Strategic Annual Action Plan giving time line for different actions to be achieve in the short-run. Leading position in the e-retail market has also enabled Amazon to target customer base and has enhanced its top line (Datamonitor. the Americas largest online retailer with three times the internet revenue of the runner up offers various product categories through its e-ecommerce website amazon. There have been also challenges to the Amazon.2010) adding china‟s revenue to $ 1 billion per year starting from 2011. The company‟s main strategies will remain as building the company through market penetration in China and Product Development by enhancing its products with new capacities like enhancing Kindle book reader to a tablet. This has enabled the company to enhance customer satisfaction as it offers customers with broader selection and greater access to information. Coupled with low margins it needs strategies for improving future prospectus of the company. What Amazon can do to prevent Barnes and Nobles taking advantage is to launch a bid to take over Boarders with Page 19 . The company is setting its sight for long term objective of entering to new markets like India and Middle East.

(The Future of Barnes & Noble. 2011) The new strategy therefore can benefit Amazon like double edge sword by using these stores to grow selling of e-books with the help of traditional selling. over investment.all the remaining stores. maintaining unsustainable level of debt. failures in concentric diversification. a concept largely ignored by Borders which many blame for the failure of the giant and at the same time preventing Barnes and Noble increasing its market shares in traditional retailing. Page 20 . This is also backed from the fact that Barnes and Noble has been doing well in the market. (quora. The traditional book market still has good future in United States and in other countries.com. The reasons behind the failure of Borders include insufficient capital resources. It will not only prevent Barnes and Nobles to gain market shares of traditional book retailing but it also will pave new strategy of developing online books for Amazon. 2011). It is not due to any downturn of traditional retail book market.

R. to close 200 stores . Retrieved from http://ehis.Second Coming. Retrieved July 24. Stonehouse.ebscohost. Amazon.com: http://allthingsd. Strategic Management. 2011. & Michael. R. David. (2010.in. (2011. (2005).. Retrieved 7 25. Retrieved July 29.com: Page 21 . from nytimes. (n.edu.). Why is Barnes & Noble performing well as a business while Borders has filed for bankruptcy? Retrieved 7 25.d.in. 2 16). (2007). from msnbc.blogs.com. New Jersey: Prentice-Hall.com/amazon/2009/04/20/amazon-com-ceo-jeff-bezos-says-companygoals-not-changed/ New York Times.References Borders files for bankruptcy.nytimes. Borders Files for Bankruptcy.nytimes. Retrieved 7 25.msnbc. (2011.oum. F. Amazon Taps LivingSocial to Enter Daily Deals Space — For Now. 6 24).newdc.com. 2 16). 2011.com/20110624/amazon-tapslivingsocial-to-enter-daily-deals-space-for-now/ James. G. (2011. from Amazon’s Tough Decisions on Its Android Tablet: http://bits. T. 2 16). Oxford. (2011.my/bsi/detail?sid=f25acff3-98fa-49f7-b022cc30c7896cba%40sessionmgr104&vid=1&hid=102&bdata=JkF1dGhUeXBlPWlwJnNpdGU9Yn NpLWxpdmU%3d#db=buh&AN=60438963 Campbell. & Houston. 7 25). 2011. from business. Business Strategy. July 16). Retrieved 7 22. Great Britain: Elsevier Butterworth-Heinemann.com CEO Jeff Bezos says company goals not changed .. from quora. D.com/2011/02/16/borders-files-for-bankruptcy/ Break the Rules the Way Zappos and Amazon Do. J. (2011. Ecommerce in India .com: http://dealbook. from SeattlePI: http://blog. Dharumakumar. 2011.com/article/boardroom/ecommerce-inindia-the-second-coming/27042/1 Duryee.com/2011/07/14/the-amazon-android-tabletconundrums/ quora. 2011. (2011. Concepts and Cases. Retrieved July 25. B.com/id/41536256/ns/business-consumer_news/ Bosman.msn.com: http://business. 2011.. from AllThingsd.seattlepi. 2011. A. April 20).com: http://www.

Apple. New Jersy: Pearson Prentice Hall. & Certo.com. Ford. (2009).http://www. Retrieved 7 25. Stock Picks: Amazon. C. (2010. (2011.com: http://www. C. 2 16). from Frenstrategy: http://fernstrategy.. Concepts and Skills. 2011. 2011.quora.com/Borders-Books/Why-is-Barnes-Noble-performing-well-as-abusiness-while-Borders-has-filed-for-bankruptcy Samuel. from businessweek. Modern Management.com/2011/02/22/the-future-of-barnes-noble/ Page 22 .com/investor/content/jun2010/pi2010067_358691. 6 7). Retrieved 7 25. S. Intuit.businessweek.htm The Future of Barnes & Noble.

They recognise exceptional talent. Leaders ensure that defects do not get sent down the line and that problems are fixed so they stay fixed. They never say “that‟s not my job”. Leaders create and communicate a bold direction that Page 23 . Hire and Develop the Best Leaders raise the performance bar with every hire and promotion. Leaders are continually raising the bar and drive their teams to deliver high quality products. As we do new things. They work vigorously to earn and keep customer trust.many people may think these standards are unreasonably high. Are Right.. Leaders develop leaders and take seriously their role in coaching others. Insist on the Highest Standards Leaders have relentlessly high standards . we accept that we may be misunderstood for long periods of time. They think long term and don‟t sacrifice long-term value for short-term results. Although leaders pay attention to competitors. They act on behalf of the entire company. look for new ideas from everywhere. They have strong business judgment and good instincts. A Lot Leaders are right a lot. and are not limited by “not invented here”. They are externally aware. Invent and Simplify Leaders expect and require innovation and invention from their teams and always find ways to simplify. beyond just their own team. Ownership Leaders are owners. services and processes.Appendix 1 Amazon Principles and Values Customer Obsession Leaders start with the customer and work backwards. they obsess over customers. and willingly move them throughout the organisation. Think Big Thinking small is a self-fulfilling prophecy.

Frugality breeds resourcefulness. Earn Trust of Others Leaders are sincerely open-minded. Vocally Self Critical Leaders do not believe their or their team‟s body odour smells of perfume. Many decisions and actions are reversible and do not need extensive study. Frugality We try not to spend money on things that don‟t matter to customers. stay connected to the details and audit frequently. even when doing so is uncomfortable or exhausting. Have Backbone. Deliver Results Leaders focus on the key inputs for their business and deliver them with the right quality and in a timely fashion. self-sufficiency and invention. Bias for Action Speed matters in business. and are willing to examine their strongest convictions with humility. We value calculated risk taking. Dive Deep Leaders operate at all levels.inspires results. There are no extra points for headcount. No task is beneath them. They think differently and look around corners for ways to serve customers.com Page 24 . they rise to the occasion and never settle. Disagree and Commit Leaders are obligated to respectfully challenge decisions when they disagree. They do not compromise for the sake of social cohesion. Source: Amazon. Leaders come forward with problems or information. Despite setbacks. Leaders benchmark themselves and their teams against the best. Leaders have conviction and are tenacious. they commit wholly. even when doing so is awkward or embarrassing. Once a decision is determined. genuinely listen. budget size or fixed expense.

COM Amazon. white." (David. 18 percent between 50 and 64 years and 4 percent older than 65. Google Plus. Can prioritize product development to market product portfolios according to proportion of internet usages in these groups. KEY COMPONENTS SIGNIFICANCE TO AMAZON.com can use marketing strategies and can exploit new business opportunities through these social networks or can even seek for innovative social network of its own "the average American internet user is young. A new social network of Google. compared to 77 percent whites. Forty-seven percent of users are between 30 and 49 years old.Appendix 2 PEST Analysis PEST FACTORS Social Social Networking has been phenomenal in past 3-4 years beginning with Facebook and Twitters success. 2005). Only 8 per cent of Internet users are black and 9 percent Hispanic. well educated.29 percent between 18 and 29 years old . has already reached to 6 million users in 6 months. employed. Gender is balanced equally among Internet users. this can be key success factor in capturing more market share Page 25 . affluent and Suburban.

and increase spending power of consumer would lead to new growth opportunities for the company Page 26 . The major force in toppling these leadership was the increase in voice of youths for liberalisations and changes meaning there is every possibility for telecom and internet liberalisation in these countries Economical the Global Economic Downturn has been affecting all business across globally but recovery has been started.internet hackers pose significant threat and risk for the online shoppers (Datamonitor 2010) this can be taken to advantage by building trust of consumers thereby enhancing market share Political In many countries including economic power house China has been restricting contents in internet. According to Global Economic Outlook for quarter 2 of 2011 published by Deloitte the Euro zone has left the recession behind and has built momentum of recovery over the past three months. certain type of products cannot be sold to China some politically conservative countries has been changing leaderships like Tunisia and Eqypt leading in the process of changing their Previous Regimes who were in power for decades. (Global Economic Outlook) new e-retail markets will be emerging presenting new opportunities to tap into these markets Increase in GDP would decrease current level of unemployment in EU.

decrease consumptions and correspondingly will increase stockpiles. changes in diets. The relative price of Disposable income of consumers will food vis-à-vis other commodities has surely increased in effect demand of so much as food inflation is greater than headline inflation Global Economic Outlook 2011 Technological with wider use of internet technologies and with 3G.and government reactions to shortages have led to the rise of food prices. the internet users has been growing at a pace (datamonitor 2010) increase eretailing scope e-retailing Page 27 . the rise of bio-fuels. (Economics book) possible slumps in demand for elastic goods may need to market maintain competitiveness in inelastic portfolio Extreme weather conditions. Recently the dollar slumped to 33 percent low against yen A weaker dollar will increase revenue to US companies as attractiveness of US products increases and such will have positive impact on US economy. An increase in oil prices will decrease disposable incomes of consumers.Currency fluctuation plays vital role in selling across borders. this will not only reduce prices of US merchandise but also transportation costs and could exploit non-US residents market There have been major oil shocks in the past two years.

Appendix 3    Lower fixed costs No natural barriers Small companies can develop niche markets  Recession proof in last economic downturn Threat of new entrants – High    Large Number of suppliers Publishers have exclusive rights of distribution Backward Interrogation with suppliers Bargaining Power of suppliers Moderate   Low cost of sales    Product diversification and product mix makes Amazon unique Intensity of RivalriesModerate  Less elasticity of for Amazon products through brand loyalty Low switching costs to customers General Internet Security threat Diversification of products means more inelastic Bargaining Power of Consumers Moderate   The traditional „bricks and mortar‟ shopping Threat of hackers make customers to choose Amazon Threat of Substitutes Source: Datamonitor Page 28 .

The bargaining power of suppliers: The inputs of e-retailing sector will include ICT equipments systems and merchandise that will be purchase for resale. inventory Page 29 .com among others has been enjoying economies of scale in purchasing. The inelastic nature of its products is explained from its own unique brand through high quality services it offers or to rephrase I could say its marketing mix is differentiated in terms of the style of merchandise it sells and attractive prices offered to customers. It has been trend in traditional retail industry for past few years to diversify business with e-retailing. However the specialist products such as books have higher bargaining power from the supplier as publisher‟s exclusive rights of distribution makes books inelastic in supply. The security threats pose by the internet itself affects the loyalty of customers in this industry and it is at advantage to Amazon from the fact that it is trusted by many customers throughout the world. The threat of new entrants: Entry to the e-retail sector can be achieved either by extending an existing company‟s operation to include internet retail or by a new company entering with a whole e-business model of retailing or combining online retailing with traditional retailing. The industry has large number of suppliers and thus reliance to particular supplier is not necessary for most of merchandise Amazon sells. The diversification to different retail sectors itself has increased customer base of Amazon and it will generally be true for any company in this sector and will reduce overall buyer power. Amazon.Appendix 3 The bargaining power of consumers: There is variety of potential customers in this retail market since Amazon has diversified its business to number of sectors which has relatively less elasticity in demand. Thus on overall the bargaining power of supplier is moderate. the nature of the e-business represents significant power to consumers as well as there is very low switching cost. There is significant threat to Amazon and other e-retailers from suppliers of forward integration moves into online retail market as electronic format reduces costs to retail some products directly to consumers. The high volume of sale is being translated into low costs via economies of scale. However. The sector has become more price competitive by virtue of high sales achieved through online retailing. Therefore I can say power of consumers is moderate.

Many customers enjoy experience of traditional shopping specially in garments and clothing products. Page 30 . The nature of e-retailing does not require heavy investment means smaller companies can compete in this industry. Number of competitors in the sector combined with minimal or zero switching cost and low cost of sale has intensifies competition in this industry with web search facilities providing price comparison intensifying the rivalries. However. Threat of Substitutes: The traditional „bricks and mortar‟ shopping and catalog shopping will not perish for all despite how opportunistic and profitable can e-retailing become in future. As I have mentioned before the threats of hackers accessing to personal information may lead many consumers to favour catalog and traditional shopping. I consider intensity of rivalry to be moderate for these reasons. There are no natural-barriers in the industry and barriers to the market are minimal as there is little regulation and supplier accessibility is relatively easy.handling and customer service. making it attractive to new entrants with strong likelihood of new entrants. The intensity of Rivalry: The global e-retail market is home to large number of retailers. Though the size and location of these retailers vary the internet and mass mode of transportation has created borderless global industry. Overall the threat of substitute can be said to be moderate to Amazon. Further the growth in the sector has been dynamic which has proven somewhat recession-proof in the last economic downturn. A small company may be successful in competing a company like Amazon with specialised or niche products. product differentiation and marketing mix of Amazon combined with low fixed costs and larger revenue base alleviate the intensity of rivalries between other players in the industry.

Appendix 4 STRENTHS          Robust Brand Image World’s Largest Online Retailer Strategic location Product Diversification Technological Advancement Service Oriented and Customer Centric Vision Strong Research and Development Facilities Enthusiastic Highly Skilled Workforce Customers Obsession and Loyalty WEAKNESS      Price Competitiveness issue might arise from Free shipping offers Stakeholders confidence issues due to patent infringement Weaker presence in emerging markets like china and Middle East High dependency on debt for working capital management Profit Margin is lower for regional market segments which have no conglomerates OPPORTUNITIES:          Growth 3G internet Technologies Growth in Social Networking Rising Global internet literacy London Olympics 2012 Expansion with Takeover and Merger Lower costs of selling Internet Sales to grow at CAGR of 13.5% until 2013 Growth in usage of Gadgets and Smart Phones in emerging countries Economic Growth of India and China THREATS:   Changing social Trends High Dependency on strategic Alliances and Partnerships for Inbound and outbound logistics Fierce Rivalry Relationship with publishers hurt due to pricing model Enhancement to Apple iPad Fluctuation in Exchange rates Consumer Confidence in US and EU Change in Social Trends Increase in food prices erode consumer spending in Asia        Page 31 .

5% until 2013 Growth in usage of Gadgets and Smart Phones in emerging countries Economic Growth of India and China Threats Changing social Trends High Dependency on strategic Alliances and Partnerships for Inbound and outbound logistics Fierce Rivalry Easy Entry Relationship with publishers hurt due to pricing model Enhancement to Apple iPad Fluctuation in Exchange rates Consumer Confidence in US and EU Change in Social Trends Increase in food prices erode consumer spending in Asia 4 3 2 4 4 3 3 4 4 9% 9% 5% 6% 8% 3% 5% 5% 0.20 8% 0.10 0.02 2.09 0.05 0.06 0.07 7% 7% 5% 3% 3% 3% 2% 100% 0.21 0.82 Page 32 .27 0.14 0.15 0.32 0.36 0.06 0.06 0.32 2 1 3 2 1 2 2 2 1 5% 7% 0.24 0.Appendix 5 EFE Matrix Opportunities Rating Weight Weighted Score Growth 3G internet Technologies Growth in Social Networking Rising Global internet literacy London Olympics 2012 Expansion with Takeover and Merger Lower costs of selling Internet Sales to grow at CAGR of 13.10 0.

36 0.24 2 2 1 2 2 10% 9% 5% 5% 5% 0.1 0.21 0.98 Page 33 .28 0.21 0.05 0.2 0.1 100% 2.18 0.4 0.21 0.2 0.Appendix 6 IFE Matrix Strengths Ratin g Weight Weighted Score Robust Brand Image World‟s Largest Online Retailer Strategic location Product Diversification Technological Advancement Service Oriented and Customer Centric Vision Strong Research and Development Facilities Enthusiastic Highly Skilled Workforce Customer Obsession and Loyalty Weakness Price Competitiveness issue might arise from Free shipping offers Stakeholders confidence issues due to patent infringement Weaker presence in emerging markets like China and Middle East High dependency on debt for working capital management Profit Margin is lower for regional market segments which have no conglomerates 4 4 3 3 3 3 4 4 4 10% 9% 8% 7% 7% 7% 5% 7% 6% 0.24 0.

Appendix 7 Porters Value Chain of Amazon Amazonhas created a data base through which a central planning is being done with the input of all business units and departments. Value is being created from the skills of labour force who are highly competitive. This helps for the Amazon to reduce cost as well gain value by synching all its business activities toward same goals. The company has been able to source expertise from competitors' trained staff Human Resources who had proven to behind innovative ideas of Amazon investment in technology has turned into numerous opportunities in the past for example being able to quickly digitize media for direct online sales. "search the inside or contents of the book service" has been Technology Development one of the highly rated development in technologies in the past the strategic business create value with the efficient and timely on demand delivery system like the BookSurge which keep rich inventory of digital copies of books readily available for customers through printProcurement on-demand Page 34 . Cost is derived down when repetetive works are eliminated when Infrastructure this data base is used the company wide With the unique benefits to employees attract highly skilled labour force who are ready to work in Support Activities warehouses located in economically cheaper areas.

Various technique of product bundling and mixing that give maximum value to customers is identified from the past sales data where real time analysis are available from Market Intelligence systems for sales and marketing team.Business Intelligence system with the help of data base infrastructure has been able to forecast inventory at fairly accurate level which also help to reduce cost by preventing unnecessary stock level and Return Inward costs substantially. Price Comparison of new and used products is available return policy with in 30 days is possible to achieve by minimising External Failure costs Alliances and third pary sales Page 35 . the online format helps Amazon to rotate inventory rapidly and reduce it inventory Online Payment System has been never faster in the e-retailing as Amazon's database combined with the intelligence system allows customers to be credit rated Close Proximity to "Aids to trade" and transport infra structure facilities help Amazon to lower cost and also allows to aggregate order to minimise per unit cost of delivering goods achieving economies of scope and scale Amazon is able to create its free delivery and own producst through product mix it offers to customers.

management cost Inbound Logistics Operations Outbound Logistic Marketing and Sales After sales services Operation Activities Page 36 .

Page 37 .

00 10.Appendix 8: Quarterly Income Statements of Amazon Revenue and Cost of Selling Expenses 31-1231-03-11 10 30-09-10 30-06-10 (000.249.00 6.000) ) (000.608.00 1.0 Cost of Revenue 7.00 0 7.00 2.947.00 Page 38 .609.000) (000.156.630.000) 12.00 1.00 1.338.00 1.774.927.00 0 5.786.00 2.000 (000.00 1.0 Total Revenue 9.560.566.957.00 4.00 Gross Profit Operating Expenses Research Development Selling General and Administrative Non Recurring Others Total Operating Expenses 2.857.317.507.

00 267.00 36.00 271.00 89.00 322.00 507.00 231.00 291.00 416.00 303.00 Page 39 .00 12.00 11.00 518.00 9.00 89.Operating Income or Loss Income from Continuing Operations Total Other Income/Expens es Net Earnings Before Interest And Taxes Interest Expense Income Before Tax Income Tax Expense Minority Interest Net Income From Continuing Ops Non-recurring Events Discontinued Operations Extraordinary Items Effect Of Accounting 201.00 12.00 206.00 307.00 85.00 78.00) 44.00 319.00 307.00 474.00 36.00 (3.00 298.

00 231.00 206.00 231.00 Appendix 9 Ansoff Matrix Existing Products New Products Growth Exiting Markets Consolidation Market Penetration Product Development Marketing Mix New Brands New Portfolios Market Development New Markets Explore new segments New Customers New Countries Diversification Enhanced Marketing Mix New Brands New Portfolios Page 40 .00 - - - - Net Income Applicable To Common Shares 201.00 206.Changes Other Items Net Income Preferred Stock And Other Adjustments 201.00 416.00 416.

5 External Strategic Position industry (IS) 2 Barriers to entry 6 Growth of Industry 5 Accessibility of Finance 3 bargaining power of consumer 4 Total Axis X score 2.Appendix 10 Space Matrix Internal Strategic Position Competitive (CA) -1 Robust Brand Image -1 World‟s Largest Online Retailer -2 Product Diversification -2 Productivity -1.5 Cash Flow Environmental -2 Inflation -1 Technological Advancements -2 Demand Elasticity -4 Taxation -2.5 Financial 5 Return on Investments 3 leverage 3 liquidity 3 3.25 Total Axis Y score 1.25 (See Space Chart in Main Text) Page 41 .

Appendix 11 Evaluation of Strategic Options Evaluative Criteria Sustainability Fit with capacity Fit with environment Acceptability pay-back period Risk Associates Return of capital employed Stake holders Reactions Consumers Shareholders Employees Feasibility Financially Technically Cost effectiveness Total Marks Option 1 7 9 5 3 5 7 7 7 3 7 7 67 Option 2 10 10 8 5 9 7 5 6 7 10 10 87 Option 3 8 9 7 6 7 5 8 9 8 8 10 85 Option 4 4 6 5 6 7 6 5 4 6 6 6 61 Option 5 10 10 6 3 7 5 6 7 7 8 10 79 Page 42 .

Brain Storming Strategic Actions Meetings with all Fuctional and Division head chaired by SVP of World wide architechture . Business Development Heads Page 43 . Jeffry Blackburn .Appendix 12 SAAP Quarterly Objectives 1. Rick Dalzel Date assign Date completion Financial Resources Non-Financial Resources 12 Business Unit Man responsible Man Accountable 15-Aug 25-Aug - Sam Wheeler . Director. Business Development Senior Vice President. Platform and Software.

2. Engineering.Steven Kessel 16-Sep - 1 Mr. Neil Roseman Vice President.Break a deal with Google to support OS of Kindle Tablet Assign Taks for R & D head and three other staff to negotiate Google and agree on price with Marketing and Finance team To produce Financial apprisal of to determine maximum price afford to pay google - 1-Sep 15-Sep 25.Steven Kessel Page 44 .00 10 Staff Mr.000. Engineering. Neil Roseman Vice President.

3 Marketing Team to discuss marketing options to minimise financail outflows 4.000. World Wide China and Asia Retailing and Pacific region Marketing Page 45 . SVP. SVP. Produce pilot batch to be evaluated for quuality assuarance Operation Department to do thourogh testing of first batch Release the pilot production in China disguised as" fake Kidle" 2-Oct 21-Sep 20-Sep - 3 Mr. Neil Roseman Head of Marketing 30-Sep 25.00 10 Diego Placentini Diego Placentini. World Wide Retailing and Marketing Marketing Manager. Diego Placentini.

Mark Peek Jeffry Blackburn .00 12 Marketing Manager.000.000.Review the results and feedbacks for the "fake Kindle" Compile and Submit the report of Product performance 5. Senior Vice President.000. US operations Diego Placentini.00 25 Mr.00 Page 46 . World Wide China and Asia Retailing and Pacific region Marketing 1-Jan 31-Mar 25.000. World Wide Retailing and Marketing 1-Jul-12 1. SVP.125. SVP. Diego Placentini. Launch the product enhance the performance and Launch the product 1-Dec 31-Dec 100. Business Development Total 1.000.00 5 Marketing Manager.

Page 47 .

St even Kessel 20-Sep - 3 Mr. Neil Roseman Vice President. Neil Roseman Head of Marketing Page 15 .To produce Financial apprisal of to determine maximum price afford to pay google 3 Marketing Team to discuss marketing options to minimise financail outflows - 16-Sep - 1 Mr. Engineering.

China and Asia Pacific region Diego Placentini.000. World Wide Retailing and Marketing Page 16 .4.000. World Wide Retailing and Marketing 2-Oct Marketing Manager.00 12 Marketing Manager. China and Asia Pacific region Diego Placentini. World Wide Retailing and Marketing 1-Dec 31-Dec 100. SVP. SVP. Produce pilot batch to be evaluated for quuality assuarance Operation Departme nt to do thourogh testing of first batch Release the pilot production in China disguised as" fake Kidle" Review the results and feedbacks for the "fake Kindle" 21-Sep 30-Sep 25. SVP.00 10 Diego Placentini Diego Placentini.

Senior Vice President. Launch the enhance product the performan ce and Launch the product Total 1-Jan 31-Mar 25.0 00.Compile and Submit the report of Product performan ce 5.00 25 Mr. SVP. Mark Peek Jeffry Blackburn .1 25. World Wide Retailing and Marketing 1-Jul-12 1.000.000.00 Page 17 .000. US operations Diego Placentini.00 5 Marketing Manager. Business Development 1.

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