Strategic Recommendations to Amazon
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Recommendations for Amazon to continue to grow and evolve the Kindle product line, in light of new competition from the iPad
Transcript of Strategic Recommendations to Amazon
Team 6
Search
Executive Summary
Current Analysis
eBook Stack
Recommendations
Measuring Success
Conclusion
Search Agenda
In eBooks, competition exists within and among hardware, software, and content providers…
Where should Amazon focus its energy and resources?• Storage and Standards• Kindle Application Software Development Kits• Capturing Value with Authors
Search Executive Summary
Executive Summary
Current Analysis
eBook Stack
Recommendations
Measuring Success
Conclusion
Search Current Analysis
Search Capabilities
People• Experienced
executives• Talented workforce
Processes• Standardized
interfaces• 1-Click
Technology• Predictive modeling• Cloud and EC2
Services
Search Core Competencies
Media Sales - $11.2B
Electronics & General Merchandise - $7.5B
Services & Financial $0.5B
2008 Consolidated Net Sales
eBook Sales$480M1
Kindle Unit Sales$299M1
1 Sources: Businessweek.com and NYTimes.com
Executive Summary
Current Analysis
eBook Stack
Recommendations
Measuring Success
Conclusion
Search eBook Stack
Stack + Vulnerabilities
Book Stack
User
Delivery
Publisher
Editor
Author
eBook Delivery Stack
SDK/Apps
Device
ContentDelivery
OS
Telecom
Storage
Search Stack & Vulnerabilities
Kindle secured first-mover advantage for Amazon, building on storage core capability. However, because of new entrants, it’s current position in each layer is threatened
Stack + Vulnerabilities Search Recommendations
Critical Success Factors
Standards Hardware Quality & Relevance
Customer Satisfaction
Content Availability
Storage layer lock-in
SDKs
Direct-from-Author Publishing
Executive Summary
Current Analysis
eBook Stack
Recommendations
Measuring Success
Conclusion
Search Recommendations
Establish the Storage Layer standard• Create options value
through file extension standards (ePub, .amz)
Predicted Outcome• Architectural Control Point
captures value from upper layers of the stack
• High quality options value at device layer
• Maintains strategic price point
Stack + Vulnerabilities Search Own The Storage Layer
SDK/Apps
Device
ContentDelivery
OS
Telecom
Storage
eBook Delivery Stack
With uncertainty at the top of the stack, being positioned at the bottom enables greater value creation
Applications
Popular Apps
Stack + Vulnerabilities Search Developers Will Help Drive Growth
Using developers to help drive organic growth will enable Amazon to quickly and efficiently identify new markets to place new strategic bets
Applications
Popular Apps
Stack + Vulnerabilities Search How Organic Growth Occurs
Once the most popular applications have been identified, network effects will begin to take shape and bringing in new users and web developers
• Amazon has taken control of the storage layer, captured value at the device level and now can explore backward-integration opportunities
Author
Retailer
Publisher
Traditional Model
AuthorRetailer
eBook Model
Stack + Vulnerabilities Search Pursue Relationships with Authors
Authors have traditionally been at the mercy of the publishers. However, with the new eBook model, they have a choice – one that is more profitable and efficient for Amazon and authors
User
Delivery
Publisher
Editor
Authors
Executive Summary
Current Analysis
eBook Stack
Recommendations
Measuring Success
Conclusion
Search Measuring Success
Category Metric Content Device (Kindle)
Consumer
Brand Awareness
Social Media
Web Analytics
Financial SDK Sales
Developer Number of Available Apps
Human Capital Talent Acquisition / Retention
Stack + Vulnerabilities Search Balanced Scorecard
The balanced scorecard approach to measuring success will ensure that Amazon is tracking the correct metrics to meet and exceed its strategic goals
Amazon is well positioned to define and take advantage of the evolving marketplace by:
1. Controlling the storage layer of emerging eBook stack
2. Relying on developer platform to lead market development and innovation
3. Use industry leadership position to pursue direct relationships with authors
Stack + Vulnerabilities Search Conclusion
