Amazon.com Business Model
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14-Sep-2014 -
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Transcript of Amazon.com Business Model
- Company Overview
- Business Model - Additional Material: Articles
Contents… !
Early Beginnings…!
• Amazonwasfoundedin1995 !
• JeffreyPreston"Jeff"BezosistheChairmanofAmazon.com !
SOWHATDOESAMAZON.COMSELL?!
Amazon.comsellslotsandlotsofstuff!
YoucanGETAnything&EverythingatAmazon.com !
Foundedin1994SeaDle,
USA
WentPublicin1997
1999:AmazonAucKon,Zshops
2005:Pinzon
2007:AmazonMP3AmazonFresh
2008:FilmProducKon,AmazonCurrencyConverter
2006:VotedNo.1InCustomer
Service2010:Amazon
Studios
2011:AmazonAppstore
AmazonCloudPlayerKindleTouch
2000:AmazonMarketplace
1.)Amazon’sBusinessModel
FIRMINFRASTRUCTURE:CentralCustomerDataWarehouse
HRMANAGEMENT:EmployeeUniqueBenefits
TECHNOLOGYDEVELOPMENT:HighInvestments,UnknownOpportuniKes,HardwarefromHP
PROCUREMENT:UsingSBU:BookSurge,DistribuKonCenters
INBOUNDLOGISTICSReturn
unsolditemstosupplier,collect
customerinfo.
OPERATIONSGood
PaymentSystem,24
hourWarehouseOperaKon
OUTBOUNDLOGISTICSClose
ProximitytoMotorways,ReachforSpecificlocaKons
MARKETING&SALESDiscounts,RecommendaKons,
InteracKveshipping
SERVICEReturn
Policy,PriceComparison M
ARG
IN
MAR
GIN
1.)ValueChainAnalysis
Amazon.comusesamulK‐levelede‐commercestrategy
Business Foundation and Model !
2.)CompeKKveAnalysis
DIRECTCOMPETITORS
• EBay• Barnes&Noble
2.)CompeKKveAnalysis
INDIRECTCOMPETITORS
• GAP• L.L.Bean• Google.com
E-Retailing Strategic Group Analysis !
• “EarthsBiggestSelecKon”• DailyAucKons• BulletProofCustomerService
• SynergisKcEffectof…
2.)CompeKKveAnalysis COMPETITIVESTRATEGY
1. Shopping Convenience
2. Ease Of Purchase 3. Speed 4. Decision Enabling
Information 5. Wide Selection 6. Discounted Price 7. Reliability of Order
Fulfillment
2.)CompeKKveAnalysis
3.)GrowthStrategies
BUSINESSMODEL
• VirtuousCycle
• $14BillionRetailMachine
• Direct‐to‐consumerOnlineModel
• ReapBenefitsofTechnology
Expansion
• CategoryExpansion
• InternaKonalExpansion
4.)MarketSegments SEGMENTATION
• BasedonActualPurchaseBehavior
• EachnewpurchaseslightlyaltersrecommendaKons
• CollaboraKveFiltering
• SellerCustomers:1.3millionacKvecustomers
• DeveloperCustomers:UseAmazonWebServices
• LoyaltyProgram:AmazonPrime(FeeBased)
5.)ValueProposiKon
Convenience
Price
SelecHon
CustomerService
SYNERGISTICEFFECT
WhatmakesAmazonaGiantisintheDetails?
CustomizeBuyer’sExperience
CustomerTracking PersonalShopper
Cookies
4.)ValueProposiKon CUSTOMERVALUE
• RecommendaKons:Regular,GimGiving
• Community:Listmania
• IndividualSellers‐AmazonMarketplace
‐Amazonzshops
‐AmazonAucKons
Time‐sensiHvediscounts.ANeraspecifiedperiodofavailabilitytheofferdisappears.
Amazon’s Gold Box!
6.)RevenueModel REVENUE
• OnlineBookstoretoOnlineShopping• AmazonMarketplace:fixedpriceonlinemarketplace
• 64%revenuefrombooks,musicvideo
• AmazonAdvantage:10‐15%ofSales
• AffiliatePartnershipMarkeKng
‐Amazonpayscommissiontositeowner
• NegaKveoperaKngcashflowcycle‐Amazonispaidbycustomers
beforeitneedstopaysuppliers
Article 1 !
Amazonmaybenefitasdigitalgoodssalesjump
• Fastestgrowingcategorythisholidayseason
• KindleFireTablet‐$199
• Aggressivepricing–VolumeSales
• Increasingavailabilityofdevices
• IncreasingDownloads• Trendexpectedtorisein2012
Article 2 !
Amazon’sAWSStorageGatewaytoconnectwithCloud
• AmazonWebServicesannouncedtheGatewayforreliable&Cost–effecKveStorageontheAWSCloud
• AmazonElasKcComputeCloud:ForaddiKonalcapacityduringpeakperiods
• WillreducecostofdatastorageandcompuKnginfrastructure