Romain english presentation

Summary:
Why is Amazon.com so successful?

•  The goal of this presentation is:
Ø  First, to show how big is Amazon
Ø  Then, to explain in what Jeff Bezos is a genius
Ø  And finally, to illustrate his visions

Friday 17th February 2012 Why is Amazon so successful? 1

WHY IS AMAZON.COM SO
SUCCESSFUL?

Friday 17th February 2012

Amazon.com, a digital shop around the
corner…

Example:


… and a digital colossus.


Amazon.com is a giant…
E-commerce
Y/Y growth for Q1 2011 +38% 3 x growth of
market

Market cap $90 bn 2 x market cap

Customers 137 m 2 x customers

Employee 33,700 15 x more than

Turnover $34 bn 16% more than

Internet traffic rank 16th before

Retail brand 1st before

Paid out $1.2 bn to buy


Why? Because Jeff Bezos had a vision.
“You could build a store online that simply could not
exist in any other way.

You could build a true superstore with exhaustive
selection; and customer value selection.”

Jeff Bezos

1 Digital enables limitless inventory

2 Digital boosts customer care

3 Digital allows higher margins, lower prices


To enable limitless inventory, Amazon
needed to get big fast…
More
merchants

More More
traffic selection
Growth

Better customer
experience


… and achieved it by three different
means.
•  Build
Ø  From time to time, Amazon simply creates a new category.
Ø  Example:

•  Buy
Ø  When competitors are already established, Amazon may buy
out an incumbent.
Ø  Example:

•  Partner
Ø  In some vertical markets, Amazon offers its technology
service and e-commerce expertise to third parties.
Ø  Example:


Did you know that all these companies
belong to Amazon.com?




Jeff Bezos



3 Digital allows high margin, lowest prices


Jeff Bezos has built a customer centric
company based on innovations.
An outstanding customer service E-commerce easier than commerce

Why
•  “If you make customers unhappy on •  1995: Customer reviews
the internet, they can each tell •  1997: Recommendations & bundle
Select •  2001: Look inside the book
6,000 friends.”
•  2003: Search inside the book
•  Customer service is the only human-
to-human interaction for an e-
commerce website.
Order •  1997: 1-click ordering

How
•  Amazon developed its own software
to manage e-mail centers and 90% of Receive •  2001: Where’s my stuff
customer service is done by e-mail. •  2002: Free supersaver shipping
•  Human: Every employee, even the
CEO, spends two days every two
years on the service desk to answer
calls and help customers.




Jeff Bezos



3 Digital allows higher margins, lower prices


To be cheaper than its competitors,
Amazon.com focuses on volume…
Better customer
experience

Lower
Growth
prices

Lower cost
structure


… and its competencies such as logistics
and tracking.
•  Optimizing its supply chain thanks to its digital advantage:
Ø  Automatically chooses the cheapest origin for the customer’s order in real-
time.
Ø  It will re-optimize it based on the other customers’ orders.

•  A data driven company:
Ø  Amazon pionneered A/B testing in 1997.
Ø  In 2001, Amazon implemented software to measure its costs for each
shipped product.

•  Sharing cost centers:
Ø  With Fulfillment by Amazon, sellers let Amazon handle their logistics.
Ø  Amazon monetizes its know-how in scalability and reliability.


Other brilliant ideas.

•  Digital driven supply chain
Ø  Amazon hired from the expert, Walmart.

•  Amazon Web Services monetizes Amazon’s know-how in scalability and
reliability.


Amazon Web Services drives these
companies.


Romain english presentation

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