MGMT 4210 Power Point

8/3/2019 MGMT 4210 Power Point

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Baquerzo, Kong, Li, Lo, Powell, YauHKUST

November 29, 2011

___________ .com

1


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The Cloud in 2008E-Reader in 2007 Present:2010 - 2011

90th most popular

website

180,000

customers

Founded in 1994 Incorporated in 1996 IPO in 1997

Person of the Year in

1999

.com Bubble in 2001

1.5 Million

Customers

$147.8

MillionRevenue

$1,600

MillionRevenue

14 Million

Customers158

Employees

25 MillionCustomers E-Reader Released, sold

out in 51.5 hours

$3,120 MillionRevenue Amazon Fulfillment

$34 Billion inRevenue

$94 BillionMarket Cap

$24,510 MillionRevenue

Service OrientedArchitecture

Evolution

Pioneers in the CloudPioneers of the E-Commerce Pioneers of the E-Reader


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The Most Client-Centric Company in

the World


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E-Commerce

Services Products


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Price Selection Convenience

Virtual Shelf

2-Day Shipping

One-Click Shopping

True Supply and Demand

3rd Party Vendors

Amazon Fulfillment Amazon Silk

Whispersync

Kindle

Fire

Amazon Prime


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E-Commerce natural habitatBooks

Music

Movies

Electronics

Appliances

Toys

Groceries

Tools


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GET BIG FAST!

Market share now equals

revenue later.


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The Fastest Growth in the Internets History So Far

Y/Y Growth for Q1 2011 = + 38% = 3 x growth of

the whole e-commerce market


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Diverse SelectionCustomer-

Centric Vision

Skilled

WorkforceApplied

Advanced

Technology

AWSKindle

Strategic

Location

Strong Logistics

Focus on R&D

Global Brand

Resources and Capabilities

Valuable + rare + costly to imitate

Sustainable Advantages


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Earths Biggest Selection


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Classical Value Proposition

Foster the model with the

Internets specific advantages

LimitlessInventoryHigh Margin,

Lowest Price

Customer Care


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First Mover

The only bookseller in

the worlds top 500

websites

From books to music(1998)

Began with books(1995-1997)

No First-Mover

Become the largest

online seller of music

within 4 months

Only 3 Main Categoriesbefore 2000

Books

Music

DVD/Video


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16 Main Categories, Over 100 Sub-categories

Today, 16 Main Categories, Over 100 Sub-Categories


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Amazon dominates the US e-commerce sales by

introducing new product categories every year


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From time to time,

Amazon simply created a

new category.

E.g.,

BuyBuild

When competitors are

already well established,

Amazon may buy out anincumbent.

E.g.,

Partner

In some vertical markets,

Amazon offers its

technology service and e-

commerce expertise tothird parties.

E.g.,

Amazon had been able to offer a massive inventory by


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To be Earth's most customer-centriccompany where

people can find and discover anything they want to buy

online.

Amazons Mission

Customer-Centric Company


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Amazon created a trusted, informative and loyal

customer relationship

Amazons customer service was ranked #1 in 2009 and 2011


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Easy-to-use

Functionality

Timely Customer

ServiceFast and Reliable

Fulfillment

Customer Focus

We start with the customer and work backward.

Customer-Centric Innovations PersonalizedStores

Trust

User

Experience


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Customer-Centric Innovations

Amazon was a first-mover of most e-commerce innovation practices


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More Consumers

More Sellers

Lower Prices

Larger

Selection

GreaterConvenience

More

Distribution

Channels

Larger Reach

Amazon aims at being the only place where you

discover and buy goods.


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For over 500 years, the publishing

industry remained unchanged

f f d l


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In 2007 after 3 years of development,

Amazon revolutionized the industry

with the release of the

It sold out within 51.5 hours


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Prior to Kindle, substantial concentration

and costs along the chain

Virtual delivery = value creationPull marketing

Efficiency

SuppliersElectronic paper, screen technology (E-ink)

E-books (Publishers)Network technology

Authors

Publisher

Printers

Distributors

Consumers

Transporta

tion

Top 10 =

20%

Top 5=40%

Source: Booz & Co.

Consequence = Poor Value Chain


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The #1 bestseller on Amazon

Free 3G

Lending Library

eInk TechnologySynchronization with Kindle Store and

Amazon Publishing

Long term > Short Term

Low price starting at $79

New kindle fire tablet at $199

Synchronization with Services


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Service Amazon Web Services (AWS)

http://www.youtube.com/watch?feature=player_detailpage&v=ae_DKNwK_ms#t=65s

Dominate global market share for cloud

computing services

In terms ofmarket share Amazon is Coke and there

isn't yet a Pepsi.

(William Fellows, principal analyst of the 451 Group)
http://www.youtube.com/watch?feature=player_detailpage&v=ae_DKNwK_mshttp://www.youtube.com/watch?feature=player_detailpage&v=ae_DKNwK_ms


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Service Amazon Web Services (AWS)


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Entrepreneur Factory Companies by former employees

How about employee satisfaction?

Great place to grow professionally

Most meaningful experience

Encourage Innovation

& Professionalism

Mobile Web E-commerce


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E-Commerce over $2.5 billion

Services over $600 million

Database over $500 millionhttp://www.seobythesea.com/2006/10/amazon-acquisitions-and-investments/
http://www.seobythesea.com/2006/10/amazon-acquisitions-and-investments/http://www.seobythesea.com/2006/10/amazon-acquisitions-and-investments/http://www.seobythesea.com/2006/10/amazon-acquisitions-and-investments/http://www.seobythesea.com/2006/10/amazon-acquisitions-and-investments/http://www.seobythesea.com/2006/10/amazon-acquisitions-and-investments/http://www.seobythesea.com/2006/10/amazon-acquisitions-and-investments/http://www.seobythesea.com/2006/10/amazon-acquisitions-and-investments/http://www.seobythesea.com/2006/10/amazon-acquisitions-and-investments/


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E-Retailing: Competitors


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Recommendation

Market penetration

Extensive Marketing to

build brand name andraise awareness

E.g. TV, press, radio

Strategy 1

Increase product range

and suitability byintroducing merchant

programme to increase

market share and sales

Strategy 2


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Why China?

Most

attractivemarket for

Amazon

Rapideconomicgrowth

Increasingconsumerspending

High Internetusage


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Feasibility

Possess relevant

skills, experience

and knowledge to

undertake globaloperations

Less capital

intensive than

entering newmarket

Successful

Merchant

programme in the

US asdemonstration

Create value to Chinese consumers Increase

shareholder earnings in long term


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3535

Enhance Value Chain

PRODUCTS

ECONOMIES OF SCALEVirtual Shelf

INNOVATION (First Mover)Logistics (Fulfillment)

SERVICESRecoup IT Investments

KindleKindle DXKindle Fire

Data MiningClient-Centric

SOA (Service Oriented Architecture)Cloud StorageCloud Services

First MoverEstablish marketEconomies of Scale

Virtual ShelfKeep hot inventory

FulfilllmentShipping for 3rd party VendorsScale

HarmonizationShared and InteroperableProcesses

EC^2Shared Services Interoperable Processes

E-COMMERCE

PrimePremium service option

Whispersync

Amazon Silk3G Browser

Kindle StoreKindle Library

Sell Spare CapacityScaleNew Revenue Source

Books

Virtual DeviceDevice Isolation Cloud Storage

Revenue Source $ in MMedia 15,923 38%Electronics and

other general

merchandise 24,115 58%AWS, Misc.

Marketing 1,484 4%

Total 41,522

Net Sales in Past 12 Months ($M)

North America 22,736 55%International 18,786 45%

Total 41,522

Sales and income Past 12 Months ($M)Net sales 41,522

Net income 517

E


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E-cosystem

Kindle Library

Store

Amazons expansion into new arenas is

synergistically supported bytheir existing

model

However, the strategy is in direct

conflict with other players strategies,

we call this The Great Convergence

The Great Convergence foreshadows

'Great Paradox, the moment when

Amazon cannot compete solely on the

basis of their pillars of durability


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Thank You MerciGracias Danke

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MGMT 4210 Power Point