AMAZON.COM instant video

ryan fernando . jason zijlastra . melissa lew . kristina ong . anastacio galicia . fiona wang

Largest Online Retailer Founded in 1994 in Seattle, Washington by Jeff Bezos Tech innovations and superior online knowledge contributed to growth Online streaming part of Amazon Prime for students

That’s not all...

What’s Amazon Prime? $79/year, free two day shipping

Instant streaming of 41,000

movies and TV shows

350,000+ Kindle titles to Amazon Prime for students

For students, free for 6 months,

$39.99/year after

What’s the problem? Inability to increase market share in the instant video market

Although Amazon offers a huge variety of items for customers to purchase

from their store, they lack in variety for their video

streaming service.

Current Situation

Netflix, 32.25%!

YouTube, 17.11%!

HTTP, 11.11%!

BitTorrent, 5.57%!

MPEG, 2.58%!Hulu, 2.41%!

iTunes, 1.90%!SSL,

1.89%!

Flash Video, 1.48%! Facebook,

1.48%!

Amazon, 1.31%! HBO GO, 0.34%!

Top Online Video Downstream Sources First Half, 2013

External Environment

LEGAL: website, video content, copyright issues

TECHNOLOGY: video quality makes online streaming

sites popular. HD will increase demand.

Five Forces Model

Rivalry Among Competitors

1. High 2. Netflix, Hulu,

Redbox

Threat of New Entrants

1. Medium 2. High capital requirement

Bargaining Power of Suppliers

1. Medium to High 2. Limited Number of

Suppliers

Bargaining Power of Buyers 1. High

2. Revenue based on customer sales; weak

loyalty

Threat of Substitutes 1. Medium

2. Many substitutes such as rental DVDs,

Apple TV, etc..

External Environment OPPORTUNITIES

Use brand and loyalty to gain market share

(buyers)

Strong capital base to get more content

(new entrants)

THREATS

Intense competition from Netflix, Hulu

(rivalry among competitors)

Pirated content from

illegal sites (legal factor)

Internal Environment WEAKNESSES

•  Not known for

online video streaming

•  No language

options, weak content

•  Slow in releases •  No original content

STRENGTHS •  Strong name, well known brand •  Strong presence, online retailer •  Amazon Prime very popular

Internal Environment RESOURCES & CAPABILITIES •  Abundance in Storage Physical Warehouses •  Innovation - Amazon Prime Air

CORE COMPETENCIES •  Ability of Superior Customer Service •  Sophisticated IT systems to provide the

largest selections of items

Although Amazon offers a huge variety of items for customers to purchase from their store, they lack

in variety for their video streaming service.

Internal Environment RESOURCES & CAPABILITIES •  Knowledge & Informational Resources •  Product Management

CORE COMPETENCIES •  The ability to utilize strong customer

knowledge and understanding to develop superior quality goods and services.

Can this be leveraged into instant video to

provide sustainable competitive advantage? YES

Internal Environment VRIO ANALYSIS •  Valuable - Experience serving 152 million

customers •  Rare – Experience successfully launching

services vertically and horizontally •  Imitate – Advanced IT systems, human

resources, capital •  Organized to Capture Value – Over 51,000

employees. CEO 2012 Businessperson OTY

Strategic Analysis INTEGRATED COST LEADERSHIP / DIFFERENTIATION

•  Premium Products at Non Premium Prices

•  Leverage Core Competencies

•  Provide More Value to Amazon Customers

•  Ex. Kindle Fire ecosystem, Prime

Offer Original Content HOW? Creating Production Studio FEASIBLE? More and more people are leaving cable

New Releases Faster HOW? Advanced Licensing Agreements FEASIBLE? ….

End Result •  Increase Market Share in Instant Video Market

•  New Prime members and increased value

•  Quality

Did you know?

ALL RUN ON AMAZON’S INFRASTRUCTURE