Complete business structure

1. Presented By:
Ikram Ahmed Khan, Mohit Thakur, Jackie Kiarie,
Spencer Masenda, Youngsam Kang

2. Amazon.com A Step Ahead

3. Founded in 1994
in Seattle, USA
28,300
employees
Global leader in
e-commerce
Wide range of
products
Worldwide
network of
fulfilment
Mass
customisation
Customer
experience
Affiliations Stickiness

4. • ‘To leverage technology and the expertise of our invaluable employees to
provide our customers with the best shopping experience on the
Internet.’
Mission
• ‘To be earth’s most customer centric company; to build a place where
people can come to find and discover anything they might want to buy
online.’
Vision
• Customer Obsession
• Innovation
• Bias for Action
• Ownership
• High Hiring Bar
• Frugality
Values
Mission, Vision & Values

6. Record Growth

7. Amazon facing claims and investigations due
to their Transfer Pricing Strategy

8. Fulfilment Procedure

9. • Books & E-Books
• Movie, Music and Games
• Kindle
• Electronics
• Home And Garden
• Computer And Office
Key Products

10. Amazon’s Revolution
“eBooks & Kindle”
>450 000 books
available for
download
Newspapers,
magazines and
blogs subscription
Amazon keeps 65%
of the revenue from
all eBook sales for
Kindle
eBooks downloaded
from Amazon not
exclusive to Kindle
Kindle eBooks add
35% to a physical
book’s sale on
Amazon
Amazon reported 80%
of eBook market
"Our vision is to have every book ever printed, in any
language, all available in tinder 60 seconds.“
Jeff Bezos, Amazon.com CEO

11. PESTEL
Factors
Key point Relevance to Amazon
Political Government regulations of e-commerce and other
services.
Laws and policies in different jurisdictions affecting
trade and foreign investments.
International policies impede Amazon’s plan for further
expansion internationally.
Economic Currency fluctuations can cause issues when selling
multimedia over the internet since the company uses
US dollars
Amazon holds cash equivalents and marketable securities
primarily in different currencies. Therefore, if the U.S. Dollar
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
services (broadband) has increased usage of media
applications
Amazon as an online retailer is forced to surpass its
competitors in terms of innovation.
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
covering all the countries
Amazon should be aware of both the domestic and
international laws
PESTEL Analysis

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

14. Bargaining power of suppliers
Low - Amazon has more power over its suppliers since it influence on costs and features to
improve the products. In addition, because of the highly trained experts in the departments of
development, market research and marketing, it is well informed about the suppliers market
thus Amazon has more power over the suppliers.
High - it is possible that Amazon’s suppliers can individually or allied supply products
directly to their customers.
Threat of substitutes
High - Major substitutes to goods
and services provided by Amazon
will be bookshops, electronic
shops, accessories shops, health
and personal care shops that are
physically located in different
cities. Also books can be
purchased at Barnes and Noble
Books, Books-A-million, and Half
Price Books can also be borrowed
for free at university libraries,
music can also be purchased at
discount retailers.
Rivalry among competing firms
High - from companies like Barnes and
Noble, Google, Wal-Mart, EBay etc. Some
of Amazon’s current and potential
competitors have greater resources, longer
histories, more customers, and greater
brand recognition. They may secure better
terms from suppliers, adopt more
aggressive pricing, and devote more
resources to technology, infrastructure and
marketing. Other companies also may enter
into business combinations or alliances that
strengthen their competitive positions.
Threat of new entrants
Low - in the e-commerce business. This
is because e-commerce is a fast
technologically driven industry and
Amazon invests in the best technology to
be the leader in the market. It would be
virtually impossible for a new company
to reach the magnitude of inventory and
status that Amazon.com
maintains. Moreover, brand loyalty is
fundamental when competing in any
industry. Amazon has established a high
standard trademark in the market and has
a greater percentage of customers loyal to
them thus a new entrant in the market
will face stiff competition to win loyal
Amazon customers.
Power of buyers
High - Amazon.com’s customers have the option of buying the products and
services they desire on the hundreds of thousands of other retail web sites on the
internet. If Amazon.com does not offer low prices to satisfy the customer then the
customer will search the Internet until they find that low price.
Porter’s 5 Forces Model

15. Strengths
1. Cost leadership strategy
2. Superior quality services and products
3. Strategic acquisitions
4. Strategic alliances
5. Efficient distribution chain and logistics
Weaknesses
1. Only online presence
2. Selling at zero margins
3. Negative publicity
Opportunities
1. Online payment system
2. Release more its own brand products and
services
3. Increase services and product portfolio
through acquisitions
4. Open more online stores in other countries
5. Physical presence
6. Straight-to-consumer model
Threats
1. Online security
2. Lawsuits
3. Strategic alliances
4. Regional low cost online retailers
SWOT Analysis

18. 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 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
Expansion

19. 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 Financials

20. 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
Amazon Financial Statement

21. Financial Analysis

22. Financial Analysis

23. 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

25. Dr. Robert Kaplan and Dr. David Norton
Balance Scorecard

26. Strategic Objectives Measures Targets Actual
Financial
• Maximize shareholder wealth
• Increased operating profit
• Reduction in prices
• Increase share price
• Higher Profit margin
• Lowering down the publishing cost
$460
3%
10%
$307.28
1%
4%
Customer
• Fast Delivery
• Brand loyalty
• User Friendly website
• establishing more distribution centres
• Customer revisits
• Increased customer ratings by
• Investments in site maintenance
3 days
38%
4.9
200m
5 days
28.5%
4.2
154m
Internal business process
• Speed of processing orders
• Secure online data processing
• Reduce processing time
• Reduction in customer complaints
2 hrs
0
3 hrs
5%
Learning and growth
• Highly skilled staff
• Innovation
• Training and employing high expertise staff
• Research and development
No.1- 108m
2.26 b
No.1- 79m
1.75 b
Balance Scorecard

27. Conclusion
Evolution
• Logical path
• Resources &
Channels
• B2C, B2B
Expansion
• New markets
• Strength of
Brand
• “Earth’s biggest
selection”
Attention
Economy
• Community &
Stickiness
• Trust
• Customer
Experience

29. Thank you!