Presented By:

Ikram Ahmed Khan, Mohit Thakur, Jackie Kiarie,

Spencer Masenda, Youngsam Kang
Amazon.com A Step Ahead
Company Overview
Founded in 1994 28,300 Global leader in
in Seattle, USA employees e-commerce

Worldwide
Wide range of Mass
network of
products customisation
fulfilment

Customer
experience Affiliations Stickiness
 Mission, Vision & Values
Mission
To leverage technology and the expertise of our invaluable employees to
provide our customers with the best shopping experience on the
Internet.

Vision
To be earths most customer centric company; to build a place where
people can come to find and discover anything they might want to buy
online.

Values
Customer Obsession
Innovation
Bias for Action
Ownership
High Hiring Bar
Frugality
Record Growth
Amazon facing claims and investigations due
to their Transfer Pricing Strategy
Fulfilment Procedure
 Key Products
Books & E-Books
Movie, Music and Games
Kindle
Electronics
Home And Garden
Computer And Office
 Amazons Revolution
eBooks & Kindle
Amazon reported 80% >450 000 books
of eBook market available for
download

Kindle eBooks add Newspapers,

35% to a physical magazines and
books sale on blogs subscription
Amazon

eBooks downloaded Amazon keeps 65%

from Amazon not of the revenue from
exclusive to Kindle all eBook sales for
Kindle

"Our vision is to have every book ever printed, in any

language, all available in tinder 60 seconds.
Jeff Bezos, Amazon.com CEO
 PESTEL Analysis
PESTEL Key point Relevance to Amazon
Factors
Political Government regulations of e-commerce and other International policies impede Amazons plan for further
services. expansion internationally.
Laws and policies in different jurisdictions affecting
trade and foreign investments.
Economic Currency fluctuations can cause issues when selling Amazon holds cash equivalents and marketable securities
multimedia over the internet since the company uses primarily in different currencies. Therefore, if the U.S. Dollar
US dollars strengthens compared to these currencies, when translated,
may be materially less than expected and vice versa

Social Increase in the internet growth rate Amazon have got an opportunity to increase their market share

Technological Innovations and development of high-speed internet Amazon as an online retailer is forced to surpass its
services (broadband) has increased usage of media competitors in terms of innovation.
applications
Environmental Global Warming Amazon offers cloud storage and cloud computing which can
eliminate the need for hardware and storage devices for the
general public
Legal No uniform regulations governing e-commerce Amazon should be aware of both the domestic and
covering all the countries international laws
Competitors
Competitors of Amazon can be classified into

Category Example O Amazon Inc being a multinational e-

1 online mass retailers Ebay.com commerce company and due to its
2 Online specialized retailers Apple.com, presence over various e-commerce
Dell.com. categories have a lot of competitors in
Staples.com
various categories
3 book retailers (As this is the main Barnes and
revenue source of amazon.cm) Nobles, Half Price
books O For example rottentomatoes.com is a
4 Brick and Mortar retailers Wal-Mart, Sears competitor for IMDB.com and Google
5 E-book readers (As kindle is a Kobo e-reader, App Engine is a competitor for Amazon
main revenue generator for Apple i-pad, Web Services. These two in actual
Amazon.com through both its Barnes and Nobles becomes competitor for Amazon Inc but
own sales and induced e-book Cybook
downloads) not amazon.com
6 Social buying sites Groupon, deal
map O Here we are considering only the
online retailing/retailing division of
Amazon.com and have classified the
competitors accordingly
Porters 5 Forces Model
 SWOT Analysis
Strengths Weaknesses
1. Cost leadership strategy 1. Only online presence

2. Superior quality services and products 2. Selling at zero margins

3. Strategic acquisitions 3. Negative publicity

4. Strategic alliances

5. Efficient distribution chain and logistics

Opportunities Threats
1. Online payment system 1. Online security

2. Release more its own brand products and 2. Lawsuits

services
3. Strategic alliances
3. Increase services and product portfolio
4. Regional low cost online retailers
through acquisitions

4. Open more online stores in other countries

5. Physical presence

6. Straight-to-consumer model
 Expansion

Amazon to Open First Brick-and-Mortar Site

The New York City Location to Handle Same-Day-Delivery Inventory,
Product Returns
Updated Oct. 9, 2014 8:00 p.m. ET

The Wall Street Journal announced

Amazon would be launching its first
physical retail store in January 2015. This
store was to better service New York
residents unable to take advantage of
Amazon's delivery service.
 Amazon Financials
AMAZON.COM,INC.
CASH FLOW STATEMENTS
Year Ended December 31,
Cash provided by or used in (in millions) 2013 2012 2011
CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD $8,084.00 $5,269.00 $3,777.00
Operating activities $5,475.00 $4,180.00 $3,903.00
-
Investing activities $4,276.00 -$3,595.00 -$1,930.00
Financing activities -$539.00 $2,259.00 -$482.00

Foreign-currency effect on cash and cash

equivalents -$86 -$29 $1
Net increase (decrease) in cash and cash
equivalents $574 $2,815 $1,492
CASH AND CASH EQUIVALENTS, END OF
PERIOD $8,658 $8,084 $5,269
 Amazon Financial Statement
AMAZON.COM,INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
Year Ended December 31,
(in millions) 2013 2012 2011
Net product sales $60,903 $51,733 $42,000
Net services sales $13,549 $9,360 $6,077
Total net sales $74,452 $61,093 $48,077
Operating expenses:
Cost of sales $54,181 $45,971 $37,288
Fulfillment $8,585 $6,419 $4,576
Marketing $3,133 $2,408 $1,630
Technology and content $6,565 $4,564 $2,909
General and administrative $1,129 $896 $658
Other operating expense (income), net $114 $159 $154
Total operating expenses $73,707 $60,417 $47,215
Income from operations $745 $676 $862
Total non-operating income (expense) -$239 -$132 $72
Income before incomes taxes $506 $544 $934
Povision for income taxes -$161 -$428 -$291

Equity-method investment activity, net of tax -$71 -$155 -$12

Net income (loss) $274 -$39 $631
Financial Analysis
Financial Analysis
 Financial Analysis
Profitability 2012-13 2011-12
Net Margin % 1.31 1.11

Asset Turnover (Average) 2.18 2.05

Return on Assets % 2.86 0.75

Return on Equity % 8.63 3.06

Return on Invested Capital % 8.1 2.75

 Balance Scorecard

Dr. Robert Kaplan and Dr. David Norton

Strategic Objectives
Balance
Measures
Scorecard Targets Actual
Financial
Maximize shareholder wealth Increase share price $460 $307.28
Increased operating profit Higher Profit margin 3% 1%
Reduction in prices Lowering down the publishing cost 10% 4%

Customer
Fast Delivery establishing more distribution centres 3 days 5 days
Brand loyalty Customer revisits 38% 28.5%
User Friendly website Increased customer ratings by 4.9 4.2
Investments in site maintenance 200m 154m
Internal business process
Speed of processing orders Reduce processing time 2 hrs 3 hrs
Secure online data processing Reduction in customer complaints 0 5%

Learning and growth

Highly skilled staf Training and employing high expertise staff No.1- 108m No.1- 79m
Research and development
Innovation 2.26 b 1.75 b
Conclusion
Logical path
Resources &
Evolution
Evolution
Channels
B2C, B2B

New markets
Strength of
Expansion
Expansion Brand
Earths biggest
selection

Community &
Stickiness
Attention
Attention
Economy
Trust
Economy
Customer
Experience
Thank you!