A case study handed out in the Marketing Management course.

1. Introduction – Problem – Amazon – Problem –
Alternatives – A – B – C – SWOT – Recommendations

2.  The wonderings of Bezos: Is amazon spreading too thin, or are your
Low-cost
leadership
strategy
investments positioning the company for the future?
Continuous
alignment of
operations
•Made market
expansion and
product
development
possible
Wide range of
products &
services
Global coverage
Customer
satisfaction and
retention
through
premium
subscription
Rode out the
storm of global
crisis
Introduction – Problem – Amazon – Problem –
Alternatives – A – B – C – SWOT – Recommendations

3. How can Amazon Acquire new-to-
company customers?
Long Term Problems Short Term Problems
Cost reduction
Finding new areas of
Growth
growth
Maintenance of
Increase of profits
profitability
Differentiation
Introduction – Problem – Amazon – Problem –
Alternatives – A – B – C – SWOT – Recommendations

4. Introduction – Problem – Amazon – Problem –
Alternatives – A – B – C – SWOT – Recommendations
B2C B2B C2C

5. Retail Non-retail
• Books (e & physical), music & movies
• Consumer electronics (smartphones,
tablets, e-readers)
• Computer & office
• Tools & automotive
• Food & household
• Home improvement
• Toys & video games
• Sports & fitness
• Clothing and jewelry
• Kids and baby
• Catalogue
• Commission based selling
• Amazon Web Services (AWS)
• Fulfillment by Amazon (Services to
businesses)
• Prime Music (ad-free music streaming for
Prime subscribers)
• Amazon Instant Video
• UpNext (3D mapping company)
• Appstore
Introduction – Problem – Amazon – Problem –
Alternatives – A – B – C – SWOT – Recommendations

6. Introduction – Problem – Amazon – Problem –
Alternatives – A – B – C – SWOT – Recommendations

7. Innovation
Cost-leadership
Bias for
action
Customer
obsession
Introduction – Problem – Amazon – Problem –
Alternatives – A – B – C – SWOT – Recommendations

8. Technological
expertise
Economies
of scale
Talented
workforce
Brand
reputation
and
recognition in
established
markets
Introduction – Problem – Amazon – Problem –
Alternatives – A – B – C – SWOT – Recommendations

9. $74 billion in revenue
2013
237 million customer
accounts
Workforce of 117,100
Stock has risen 17,000 %
since launch
Net income ≈$300 million
Introduction – Problem – Amazon – Problem –
Alternatives – A – B – C – SWOT – Recommendations

10. Introduction – Problem – Amazon – Problem –
Alternatives – A – B – C – SWOT – Recommendations
Differential
difficulties
Online retail not
able to offer
fast gratification

11. How can Amazon Acquire new-to-
company customers?
Long Term Problems Short Term Problems
• Cost reduction
• Growth
• Maintenance of
profitability
• Differentiation
• Finding new areas of
growth
• Increase of profits
Introduction – Problem – Amazon – Problem –
Alternatives – A – B – C – SWOT – Recommendations

12. Scandinavian
expansion
C:
A:
Expansion of
Amazon Web
Services
Introduction – Problem – Amazon – Problem –
Alternatives – A – B – C – SWOT – Recommendations
B:
Tablet and
Smartphone
Development
Recommendation

13. Introduction – Problem – Amazon – Problem –
Alternatives – A – B – C – SWOT – Recommendations

14. Amazon has no
warehouse and e-commerce
in
Sweden
Will come closer to
customers, being
able to be cost
leader
Market untapped,
moving here would
open up for new
customers
Aligns with long
term profitability
Aligns with
corporate goals
Introduction – Problem – Amazon – Problem –
Alternatives – A – B – C – SWOT – Recommendations

15. Pros Cons
• Well-developed
infrastructure.
• Internet usage is high
• High income per capita
• Great export and import
possibilities
• Different exchange rates
• Price comparison sites often
used
• Swedish government planning
to increase taxation on
businesses
Introduction – Problem – Amazon – Problem –
Alternatives – A – B – C – SWOT – Recommendations

16. Introduction – Problem – Amazon – Problem –
Alternatives – A – B – C – SWOT – Recommendations
A way to differentiate and diversify
Increases brand recognition
Integration of product software with e-commerce solutions
Better products – potential customer acquisition and development
• Increase of revenue through up-selling and cross-selling
Aligns well with strategy of long term profitability
• Potential increase of customers
• Customer referrals (if product is good)
• Links to corporate goals – customer obsession, innovation, bias for action

17. Pros Cons
• Long term potential.
• Consumers more engaged in Amazon
and online retailing.
• Higher expected return on
investments
• Increased sales of media
• Tablet – Production costs higher than
selling price.
• Fierce competition from established
brands (such as Apple, Samsung, Sony).
• High costs.

18. Introduction – Problem – Amazon – Problem –
Alternatives – A – B – C – SWOT – Recommendations

19. Currently only 5 %
of the revenue
Young service
Cloud service got
potential for
Have potential to
increase the
number of
customers
growth
Introduction – Problem – Amazon – Problem –
Alternatives – A – B – C – SWOT – Recommendations
Aligns with long
term perspective

20. Pros Cons
• Large industry growth
• Wider the Customer base
• Have potential to become very
profitable
• Requires large investments
• Highly competitive, with large
players such as IBM
• Takes time to become profitable
and gain market share
Introduction – Problem – Amazon – Problem –
Alternatives – A – B – C – SWOT – Recommendations

21. Strengths
•Low prices A B C
•Visibility/Trustability A B C
•Efficient distribution channel A B
•Extensive product catalog A B C
•High profits A B C
•Scalable IT-system infrastructure A B C
•Optimal inter-connection between services A B C
•Stable finances A B C
•Technological expertise A B C
•Economies of scale A
•Talented workforce A B C
•Good brand name and reputation A B C
Weaknesses
• Small product margins A B C
• Lower brand awereness outside domestic A
• Low differentiation B C
• Delayed gratification A
Opportunities
• Global expansion – unestablished markets A
• Cloud computing growth A C
• Growth in online streaming A B
Threats
• AWS in competitive environment C
• Rise of taxes in Sweden
• Well established competitors A B
Introduction – Problem – Amazon – Problem –
Alternatives – A – B – C – SWOT – Recommendations

22. Why?
• Aligns with
corporate goals
• Utilizes
strengths and
opportunities of
company and
environment
• Minds about
weaknesses and
threats, long
and short term
problems
Potential
• New-to-company
customers
• Better customer
experience for
Scandinavians
• Loyalty
• Customer
development
Expansion
• Increased
growth
• Maintenance of
profitability
• Cost reduction
• Competitive
pricing
Scandinavia as an
opportunity
• Well-develop
infrastructure
• High internet
usage
• Great
import/export
possibilities
• High income per
capita
Introduction – Problem – Amazon – Problem –
Alternatives – A – B – C – SWOT – Recommendations

23. Look at promising
warehouse sites
Create tailored
websites
Research
potential retailing
of books in
Scandinavian
languages
Scandinavian
Expansion
Introduction – Problem – Amazon – Problem –
Alternatives – A – B – C – SWOT – Recommendations

24.  Amazon achieves further positioning as low-price leader
 Increased brand recognition
 Larger customer base
Long term growth