the King of E-tailing

Team E
Abhisek Mondal -27001 Bharti Sethi-27012
Divya Rajshree-27016 Priyanranjan Nayak-27034
Rohit vijayvergia-27041 Siddharth Shankar -27050
 OVERVIEW: AMAZON.COM

 1995 Founded as online bookstore

 1997 IPO ( AMZN: Nasdaq)
 1997 Launched “one-click” service
 1998 Started selling music, videos, and
DVDs
 1998 Expanded overseas
 1999 Electronics, toys and software
 2000 Slowed down in Dotcom collapse
 2001 Amazon Marketplace (C2C)
 2002 Gained profit! (Q4, $1c per share)
 2003 First full-year net profit
 2004 Launched search engine a9.com
 2005 DVD rental service?
 Key features of Amazon.com superstore

Easy browsing, searching, and ordering

Information, reviews, recommendations
 Broad selection
Low prices
Secure payment systems
Useful product
Efficient order fulfillment
Personalization
 External opportunities & Threats

• OPPORTUNITIES:
THREATS:
- eBay, Barnes
extensive community
& Nobles,ofand
buyers
Wal-Mart
- changes in the
Population segment
business
untapped
model by lack of Internet access
- Internet
Weak economic
taxes prohibited
performance of European market
- Growth
new taxes
of (Value
internet
Added
userstaxes:
in international
VAT) in products
marketare levied
- E-commerce
Increased competition
expansion in Asia and the Pacific
- high penetration of retail on-line sales
- 13% online jump
 Internal strengths and weaknesses
• STRENGTHS:
- Strong brand name
*Large product selection
*Pricing policy with discounts
- Corporate culture
- High quality management team
- Customer service support (Highest
score in 2010 American Customer
Satisfaction Index)
- Strong Infrastructure: Effective
automated distribution centers in the
US and overseas (Competitive
Advantage)
- Upgraded technology: software and
hardware
- Pioneer in the syndicate selling on the
Web
- Two segments: B2C and B2B e-
commerce.
- EOS : building efficiencies of scale
• WEAKNESSES:
- Lack of Spanish website version
(Latino and Hispanic Americans are the
fastest-growing online ethnic group)
- Low finance performance (high debt
level)
- Risk of introduction of wrong new
categories which could damage
company’s brand
- Company’s offered free shipping might
affect future financial outcome
- Certain products (high volume/weight)
have high shipping costs which could
confront with local offline retailers
 Bookselling: An Online Business Model

Advantages:
Unlimited online shelf space
Offer customers a vast selection through an efficient
search and retrieval interface
Realize significant structural cost advantages
Sources product from a network of book distributors
and publishers which can give a decent discount.
Personalized service
Negative Operating Cycle
Shift inventory risk to its vendors in the
process.
Generate interest on the full sale price for
over a month.

Amazon introduced co-branded auctions and

zShops Marketplaces.
- In this new model, Amazon acted as an
agent by facilitating transactions and taking a fee.
Factors of Amazon’s Success
 Brand
– By 2000, Amazon.com became the forty-eighth most
valuable brand in the world.
– Personalization would be a hallmark of the Amazon brand.
 Customers
– Listen
– Invent
– Personalize
– Amazon’s Mission: To be the earth’s most customer-centric
company.
 Distribution Capability
– Bezos: We will have a competence in distribution that will
be hard to compete with.
 Technology ＆ E-commerce Expertise
– Customized Information Systems
– Amazon Commerce Network (ACN)
– One-Click Process
– Search Engine System

 Customers
– Listen
– Invent
– Personalize
– Amazon’s Mission: To be the earth’s most customer-centric
company.

 The ability to continually innovate

– A great team with a passion for innovation and A passion
for serving customers well
Benefits & Limitations of Amazon’s Online Retail Model
The benefits of Amazon’s online retail model is
that it allows consumers around the world to
shop 24 hours a day from the ease of their
computers, without having to physically go to
the stores.
The major limitations of Amazon belong to two
main groups: technical and transportation. In
many areas, telecommunications bandwidths
are insufficient – a willing consumer may not
access the store website. Depending on
geographic location, shipping time may vary
and could cause customer dissatisfaction.
How has Amazon.com change the market for books?
From the consumers’ point of view, it changed
the market by allowing for a wider selection of
books to be available to consumers all over
the world by a click of a mouse.
For publishers and sellers, it helped cut the
cost of promotion, advertising, and
administration. Both sellers and buyers meet
on Amazon; make the transaction without
having to meet each other.
It was huge success because unlike other
products, consumers do not need to actually
touch and feel a book before buying it.
Amazon has a huge catalog of products for sale. How does the
design of Amazon's web site facilitate the user's effort to
locate a particular product?
Excellent Indexing System

Powerful search Engine

What is collaborative filtering? How does Amazon use this
technique to encourage sales?
 Amazon lets its customers sell used books alongside the new
versions. Is this a reasonable business practice, or does it unfairly
undermine the market for new books?
Some book stores sell used books along with new books.
Research on used book sales suggests an active used book
market helps, not harms, the sale of new books.

For example, an active used book market means that

newer books have a higher resale value. And perhaps,
many people simply don't view used books as a substitute
for new books, but that is their primary choice.

 Amazon is letting its customer sell used books along with

the new version is a reasonable business practice; it gives
the consumer more choices which increase the market size
in general.
 Recommenadations

 Automated distribution centers to increase efficiency and customer

satisfaction.
 Different language versions of Amazon
-study market demographics
-prevent category distribution error
-brand more appealing
-international presence on the web.
 Eliminating future taxes on international transactions by working
with international governments.
 Eliminate future costs of e-commerce (consumer and business)
-decrease debt and increase revenue
-gain more rights and more profits from free shipping.
 Golden rules: understand what business you are in; broke or not, fix
it; people make a difference; and market share matters.