Embed Size (px)
Citation preview
1. Introduction
Amazon.com, Inc is an American international electronic commerce company with headquarters
in Settle, Washington, United States. It is the world’s largest online retailer. Is was established in
1994 as an online bookstore, but then soon diversified with DVDs, VSHs, CDs, video and MP3,
video games, electronics, food, toys…The founder of Amazon is Jeff Bezos, at first, he wanted a
name for the company that began with A so that it would appear first in the alphabetic order,
after looking up carefully in the dictionary, he settled on Amazon because it was a place that was
exotic and different. And in 2000, Amazon’s logotype has featured a curved arrow leading from
A to Z, representing that they can carry all products from A to Z with a shape like a smile.
2. Mission statement and online value proportion
Amazon was founded with a mission: ‘ to be Earth’s most customers- centric company where
customers can find anything they want to buy online and offer the customers with the lowest
possible price”. Amazon sells products and service in all fields such as retail goods, customers
electronics and digital content such as books, movies, music and games, digital downloads,
electronic and computer, home and garden, toys, grocery, shoes and jewelry, health and beauty,
sport and outdoor…Amazon’s value proportion is based on low cost price for a high selection of
books ordered anytime, anywhere extremely convenient mechanism.
Business Strategy :
The company’s objective is to become the best place to buy, find and discover any products
online, Amazon is on the way to enhance and broaden it brand, customer base and electronic
commerce with the goal of creating customer’s preferred online shopping destination, in the
United State and around the world.
Amazon.com websites
The company believe that the sale of book, music and other products and service on the web can
create benefits to its customers including some convenience like greater selection, ease- of- use,
competitive pricing and personalization. On the website of Amazon, in addition to buy products
online, customers also can conduct targeted searches, browse the highlighted selection, view the
best sellers and other features, read and post comments, register for personalized services, check
order status… The key components of Amazon’s offering include browsing, searching, review,
recommendation and personalization, with I- click and secure credit card payment , the
company’s website promote brand loyalty and repeat purchase by providing an inviting
experience that a customer can return frequently and interact with other customers.
3. SWOT analysis
Strength
It is a brand well respected for price and customer convenience. Second, it is an online trading
company that has come through the recession relatively well. Last but not least, accumulated
technological expertise gather in retailing and customer management technology.
Weakness
First, Amazon’s net profit has been positive, but no better than many bricks and mortar retailers :
3.2.% in 2007, 3.4% in 2008, 3.7% in 2009 and 3.4% in 2010. The second weak point is that
Amazon’s self- publishing facilities will change the publishing industry business model, but the
beneficiary may not be Amazon.
Opportunities
The first opportunity for Amazon is that it is poised to exploit the shift to cloud and other third-
party service. The second one is with Amazon’s Kindle. Which has made ebook respectable, has
conquered only a small part of the publishing industry.
Threat
Amazon has improved the hardware and dropped the price, but many still regard the price and
ebook expensive, cheaper readers may come from China and Korean, and ebook price may
undercut with google. In addition, Amazonweb service face competition from established
providers such as Dell, Microsoft and Google. And merchant services are in competition with a
host of internet payment service providers around the world.
4. Customers and competition
Amazon categorize its customer into 3 groups : set customer, seller customer, and developer
customer. There are about 76 million customers account, but just 1.3 million active seller
customers in its marketplaces and Amazon is seeking to increase this group. Amazon is unusual
for a retailer in that it identities developer customers who use its Amazon web service, which
provides access to technology infrastructure such as hosting that developers can use to develop
their own service. Members are also encouraged to join a loyalty program.
In SEC 2005, Amazon describes the environment for their product and service as intensively
competitive. Its main current and potential competitors are:
Physical- world retailers, catalog retailers, publishers, vendors, distributors and
manufacturers of product, sales volume, customer base, mail order or direct
marketing…
Other online E- commerce sites.
A number of indirect competitors, including media companies, web portals,
comparison shopping…
Companies that provide e- commerce service, including website development, third-
party fulfillment and customer service.
Amazon believe that main factors in market segments include: selection, price, availability,
convenience, information, discovery, brand recognition, personalized service, accessibility,
customer service, reliability, speed of fulfillment, ease of use, ability to adapt to changing
condition, customer’s overall experience…
5. Business model of Amazon
5.1.Line of business
Amazon’s line of business will be defined as follow: online retail, internet services, and Kindle
ecosystem.
Online retailers
Amazon claims to have Earth’s Biggest Selection of products available through its family of
websites sold at the lowest cost possible. The company first started as an online book seller, then
music and movie seller and ultimately into electronics and household goods. However, Amazon
does not stock every products it sell so one of its strategy is to serve as the channel for other
retailers, it maintains its status as a destination website but does not have to maintain inventory
on slower- selling products, this strategy has made Amazon long- tail retailer.
Internet service
Amazon’s internet service can not be easily discussed as a stand alone line of business because it
is deeply intertwined with both its retail business and the Kindle ecosystem. Amazon has begun
to provide service like Amazon Prime, which provide free two day shipping on the retail
purchases, on- demand video streaming, and free access to the Kindle library, all for annual fee.
Kindle ecosystem
Amazon has expanded its business into manufacturing and distributing the family of Kindle
tablets, which was originally designed as an electronic book reader, the Kindle has become a
fully functional tablet and media device, with the Kindel, Amazon serves as manufacturer and
traditional retailer.
5.2. Amazon business model canvas
The chart below illustrates that Amazon keep something consistent. Its value proposition remains
price and convenience no matter the product or service and low price can be sustained by
ensuring customer relationship. The company is expected to expand into new area while
continuing to focus on two building blocks.
