INDIAN INSTITUTE OF TECHNOLOGY ROORKEE

Amazon.com

Professor Dr. S. Rangnekar

Department of Management Studies
IIT Roorkee
 Table of Contents

1. Group Profile

2. Company Introduction

3. Amazon Web Service

4. Business Expansion Strategy
5. Performance, IPO & Shares
6. SWOT Analysis
7. India business and Legal Challenges

8. References

9. Research Papers
Group Profile

Bebak More
Sparsh Wadhwa Nominzul Tumurbaatar Ruby Panjiyar • BBA, Major in Finance,
• B. Tech, Electrical Engg., • ...... • ………… Institute of Business
Pandit Deendayal Energy • .......... • …………… Administration, University
University, Ahmedabad • ............. • …………….. of Rajshahi, Bangladesh
• 60 months work experience • ......... • ……………….. • Founder President, IBA
in Bosch Ltd and IMS Business Club
Learning Resources. • Experience of 11 months at
• Department of Assistant High Commission
Management Studies, IIT of India, Rajshahi
Roorkee Bangladesh
• Interested in Finance &
Accounting
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Amazon : The journey

• Founded by Jeff Bezos in 1995. Named after the amazon river.

• Had a humble beginning but went on to become one of the world’s largest company by market cap.

• Started as a bookseller. Initially, public was skeptical of the business as there were established competitors like
Barnes & Noble.

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Amazon : The journey

• But Bezos was very optimistic and wanted to utilize the power of
the internet.

• The “Get Big Fast” strategy of Amazon worked well for it as the
company garnered 180,000 customers by 1996 which further
jumped to over a million by 1997. Revenues increases
tremendously too !!
• Amazon continued to grow and expand itself from books to
movies, videos, consumer electronics, software, toys by 1999.

5
Amazon Web Service

By 2000, Amazon went international. Bezos felt the need to be a tech company more than a retail company and launched a
cloud computing service-Amazon Web Service.

Being primarily developed to compile data, AWS got further upgraded with the help
Of Annapurna Labs In Israel.

Today, AWS contributes almost 47% of Amazon’s profits and 32% in the overall
revenue.

Today, companies like Neflix, Spotify, Zoom rely massively on AWS.

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Business Expansion Strategy

• Growing and getting there fast-the primary agenda at Amazon.

• Follows a 3 step strategy for expansion and venturing into new businesses.

Originality

Scalable Model

Returns on Investment

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Business Expansion Strategy

• Originality – Unique offering , nobody having the

capability to offer.

• Scalable Model- Amazon operates at scales unmatched

by other companies.

• Return On Investment – Even with all the operational

efficiency and scale, there has to be a good return on
capital to justify it.

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Group Profile

Sparsh Wadhwa Nominzul Tumurbaatar Ruby Panjiyar Bebak More

• B. Tech, Electrical Engg., • B. Tech, Chemical
Pandit Deendayal Energy Engineering, VIT, Pune
University • GET at Sudarshan Chemical
• 60 months work experience Industries Limited.
in Bosch Ltd and IMS • Research Internship on
Learning Resources. Synthesis of Copper
• Department of Nanoparticles.
Management Studies, IIT • Project -Surge Analysis
Roorkee • IARC Member
MBA- DoMS, IIT Roorkee
• B. Tech [ECE], Nit
Uttarakhand
• Winner of UNIC Essay
competition
• Publish 2 IEEE Paper on
Image Processing
• Student Coordinator at BMA
Club, DoMS, IIT Roorkee.
• B.E- Civil Engineering, M.S.
Ramaiah Institute of
Technology, Bangalore
• 12 months work experience
at Construction and Ed-tech
Industries
• Class Representative,
Department of
Management Studies, IIT
Roorkee

9
Performance, IPO & Shares

10
 IPO
• Amazon.com Inc. held its initial public offering (IPO) on
the Nasdaq on May 15, 1997, at a price of $18 per
share, trading under the NASDAQ stock exchange.

• Notably, $10,000 invested on that day and price would

be worth more than $12 million as of May 2020.

• AMZN's market value eclipsed $1 trillion in 2018, and its

founder, Jeff Bezos, became the richest person in the
world.

• The company's own growth has been geometric since its

early days as an online bookseller to a juggernaut of a
business that sells everything from books to groceries,
and data storage to movies.

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 Amazon Stock performance
Amazon shares hit record
highs multiple times
in 2020.

An investment of 10,000 $
at 18$ per share in 1997
would be worth more than
12 million $ in May 2020.

This is more than 120,000%

growth !!!

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Amazon Revenues

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Amazon Revenues

14
SWOT Analysis

STRENGTHS

T H R E AT S S
T W WEAKNESSES

OPP ORTUN ITIES

O
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Strength

16
Weakness

17
Weakness

18
Opportunity

19
Threat

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Group Profile

Sparsh Wadhwa Nominzul Tumurbaatar Ruby Panjiyar Bebak More

• B. Tech, Electrical Engg., • B. Tech, Chemical
Pandit Deendayal Energy Engineering, VIT, Pune
University • GET at Sudarshan Chemical
• 60 months work experience Industries Limited.
in Bosch Ltd and IMS • Research Internship on
Learning Resources. Synthesis of Copper
• Department of Nanoparticles.
Management Studies, IIT • Project -Surge Analysis
Roorkee • IARC Member
MBA- DoMS, IIT Roorkee
• B. Tech [ECE], Nit
Uttarakhand
• Winner of UNIC Essay
competition
• Publish 2 IEEE Paper on
Image Processing
• Student Coordinator at BMA
Club, DoMS, IIT Roorkee.
• B.E- Civil Engineering, M.S.
Ramaiah Institute of
Technology, Bangalore
• 12 months work experience
at Construction and Ed-tech
Industries
• Class Representative,
Department of
Management Studies, IIT
Roorkee

21
Amazon: Industry Analysis

22
Threat of New Entrants -Low

Large Investment in Brand

development

Customer Loyalty

23
Bargaining power of buyers – High

Customers of Amazon has high bargaining

power for household products, Online
streaming services, Amazon fire TV stick,
Kindle because of the availability of substitute
products and high competition.

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Threat of substitute – High

Low switching cost in the industry, as customers can

easily change from Amazon to other retailers. 
As Amazon does not sell unique products, and most
of the products are retail products.
A single bad experience will drive the customers
away from Amazon because of the easy availability of
substitutes at a cheap rate.

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Bargaining Power of Suppliers – Low to
Moderate

More competition among suppliers.

Strict rules and regulations laid out by Amazon.

A product whose suppliers are in small proportion,

then the power suppliers increase moderately

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Competitive Rivalry – High

• Strong competitors and,

• Rivalry in the online retail
industry is high.

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Amazon: PESTEL Analysis

Political

Legal Social

Economic Technological

Environmental

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Political and Legal

• Apprehensions on the stability of

Current Monarchy.
• Good relations with Gulf countries.
• Increased Tensions with Iran.
• Geographic position help us to tell there
concern.
• Change in Oil prices are preceded by events in
Middle east [Suez crisis]

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Economic

• Saudi economy is highly dependent on Oil revenues.

• Oil revenues from Aramco generates steady revenue.
for government.
• Covid 19 has made Saudi government
to introduce Income tax.
• Sponsorship in Motorsport and
Globalization has Kicked in.

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Social Cultural

• Shortage of Local talents affects Aramco.

• Deeply Involved with CSR in Saudi Arabia.

• Sustainable business operations.

• Petroleum Intelligence Weekly’s top 10 rankings that position Saudi Aramco in top
ranking above the NIO (Iran), ExxonMobil (USA), PDV (Venezuela), and BP (United
Kingdom).

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Technological and Environmental

• Huge cash reserves helps Aramco to continuously focus on innovation and increase
efficiency.
• Investments and joint venture by Aramco in strategic technologies.
• Major investments planned in Renewable energy sector.

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National Oil Companies (NOCs)

• A national oil company (NOC) is an oil and gas company fully or in the majority owned by
a national government. According to the World Bank, NOCs accounted for 75% global oil
production and controlled 90% of proven oil reserves in 2010.

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Energy per capita scenario in present scenario

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Group Profile

Sparsh Wadhwa Nominzul Tumurbaatar Ruby Panjiyar Bebak More

• B. Tech, Electrical Engg., • B. Tech, Chemical
Pandit Deendayal Energy Engineering, VIT, Pune
University • GET at Sudarshan Chemical
• 60 months work experience Industries Limited.
in Bosch Ltd and IMS • Research Internship on
Learning Resources. Synthesis of Copper
• Department of Nanoparticles.
Management Studies, IIT • Project -Surge Analysis
Roorkee • IARC Member
MBA- DoMS, IIT Roorkee
• B. Tech [ECE], Nit
Uttarakhand
• Winner of UNIC Essay
competition
• Publish 2 IEEE Paper on
Image Processing
• Student Coordinator at BMA
Club, DoMS, IIT Roorkee.
• B.E- Civil Engineering, M.S.
Ramaiah Institute of
Technology, Bangalore
• 12 months work experience
at Construction and Ed-tech
Industries
• Class Representative,
Department of
Management Studies, IIT
Roorkee

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 Current Scenario Post Paradigm
Shift
• Their deal with Reliance Industries Ltd.’s chemical and refining business, did not go
through, because they have to pay their stakeholders worth $75 billions.

• Also, Saudi Arabia is late to the party of shifting away from the Oil based economy, which
might end up hurting Saudi Aramco.
• Oil price war makes it difficult to tie hands with Saudi Arabia when demand was already
choked off by the COVID-19 outbreak. This adds to the already unstable status Middle
East holds in the entire world. No international investors, which fails its initial plan.
• Road to ruin is paved with good intentions.
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References

Book: Saudi Aramco 2030 Post IPO challenges

By: Mohamed A. Ramady, London, United Kingdom

About the book: This book discusses the strategic shift in ownership of Aramco and its potential
impact on Aramco’s role in a post- privatized world. Scheduled to become an IPO in 2018, Aramco is on
the verge of becoming the largest IPO on the market. As the world’s largest oil and gas company,
Aramco’s impending privatization has important implications for the world’s petroleum market. This
book, therefore, undertakes an analysis of Aramco, examining its history, its current role in Saudi
Arabia’s economy, and its future role as an IPO. The chapters highlight the likely outcomes for Aramco
in proceeding with its planned IPO and privatization, as well as the various policy options and models
available to it by drawing on the privatization of other national oil companies  in Norway , Russia,
Brazil, and China. The book also explores the complexities that will be involved in transforming Saudi
Aramco to a privatized company—albeit with significant government oversight and control—and
addresses  key questions  on the issues  likely to be  faced, such as IPO pricing, the listing, domain, and
market capacity, and potential stakeholders. As such, this book will be of interest to academic
researchers studying energy economics, energy policy, and the political economy of the Middle East, as
well as private sector decision makers in energy related fields, international organizations, international
oil companies, energy commodity traders, and public sector energy policy makers with interest in Saudi
Arabia and Aramco’s IPO.

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References

BOOK: Saudi, Inc. – The Arabian Kingdom`s Pursuit of Profit and Power
AUTHOR: Ellen R.Wald

About the book:The Saudi royal family and Aramco leadership are, and almost
always have been, motivated by ambitions of long-term strength and profit. They
use Islamic law, traditional ideology, and harsh justice to maintain stability and
their own power, but underneath the thobes and abayas and behind the religious
fanaticism and illiberalism lies a most sophisticated and ruthless business
enterprise. Today, that corporation is poised to pull off the biggest IPO in
history. Over more than a century, fed by ambition and oil wealth, al Saud, as the
royal family is known, has come from next to nothing to rule as absolute monarchs,
a contrast with the world around them and modernity itself. The story starts with
Saudi Arabia's founder, Abdul Aziz, a lowly refugee embarking on a daring gambit
to reconquer his family's ancestral home--the mud-walled city of Riyadh. It takes
readers almost to present day, when the multinational family business has made al
Saud the wealthiest family in the world and on the cusp of a new
transformation. Now al Saud and its family business, Aramco, are embarking on
their most ambitious move: taking the company public and preparing the country
for the next generation.
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References

Reference Paper:
By: 

Abstract In February 2021, Amazon announced 2020 operating profits of $22,899 million, up
from $2,233 million in 2015, on sales of $386 billion, up from $107 billion five years earlier .The
shareholders expressed their satisfaction, but not all were happy with Amazon’s meteoric rise.
Many traditional retailers in the United States were going bankrupt, while major competitors
such as Walmart and Best Buy were forced to invest aggressively in online retailing to prevent
their market share from eroding. Every retail sector appeared to be under threat, fueling
anxieties that Amazon and America’s other tech giants were becoming too big and powerful.
These anxieties were only exacerbated by the COVID-19 pandemic, during which Amazon grew
rapidly, while most traditional retailers foundered. Amazon’s increasingly clear ambitions in
healthcare and autonomous vehicles were also causing concern.
In early 2021, Amazon was drawing criticism from across the political spectrum in the United
States, with calls for it to be broken up. The European Union was also investigating its practices.
Meanwhile, on February 2, 2021, Amazon reported that company founder and CEO Jeff Bezos
would step down from his role and become executive chairman of the board. Andy Jassy, the
leader of Amazon Web Services (AWS) would become the new CEO. How would Jassy navigate
the many challenges to come and continue Amazon’s record of success?
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References
Reference Paper: In the spotlight: demands on Saudi Aramco are increasing
Author: Steffen Hertog
Year of Publication:2019
Absract: Diversification efforts in MENA (particularly GCC) countries obviously correlate with international oil prices. It
would be naïve to believe a rapid decoupling is either feasible or necessary in the short term. Economic logic favours
specialization over diversification—individuals and enterprises should concentrate on what they can do best and where they
have a comparative advantage. The increasing importance of global value chains for development emphasizes this economic
logic, by moving competition from entire sectors to single stages of production and even individual jobs. GCC states hold a
comparative advantage in oil and gas production, so why should they not tailor their economies to this sector and approach
their own diversification in the context of the value chain of petroleum products? One might argue that countries with large
resource reserves and small populations could then simply accept, for the time being, that price shocks will happen
periodically. Of course, GCC countries are heterogeneous, with several states now having declining reserves and sizeable
populations. In this context, with additional drivers of technological advancement and environmental unsustainability,
diversification is more urgent.

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References

Case Paper: CORPORATE STRATEGIES OF SAUDI ARAMCO

By: Yoshikazu Kobayashi, Researcher, the Institute of Energy Economics, Japan

Abstract: Of world proven oil reserves of 1,148 billion barrels, approximately 77% of these resources
are under the control of national oil companies (NOCs) with no equity participation by foreign,
international oil companies. The Western international oil companies now control less than 10% of the
world’s oil and gas resource base. In terms of current world oil production, NOCs also dominate. Of
the top 20 oil producing companies in the world, 14 are NOCs or newly privatized NOCs. However,
many of the Western major oil companies continue to achieve a dramatically higher return on capital
than NOCs of similar size and operations.
Many NOCs are in the process of re-evaluating and adjusting business strategies, with substantial
consequences for international oil and gas markets. Several NOCs have increasingly been jockeying
for strategic resources in the Middle East, Eurasia, and Africa, in some cases knocking the Western
majors out of important resource development plays. Often these emerging NOCs have close and
interlocking relationships with their national governments, with geopolitical and strategic aims
factored into foreign investments rather than purely commercial considerations. At home, these
emerging NOCs fulfil important social and economic functions that compete for capital budgets that
might otherwise be spent on more commercial reserve replacement and production activities.

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Online References

• https://ourworldindata.org/

• https://www.aramco.com/

• https://www.opec.org/opec_web/en/

• https://www.formula1.com/en/latest/article.formula-1-announces-long-term-global-part
nership-with-aramco.6GwAyvFOyBtqkyHwdXj0NA.html

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Amazon.com-America’s biggest online retailer !!!

END OF THE PRESENTATION

THANK YOU !!!

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