Post on 08-May-2015
transcript
““Amazon.com named after theAmazon.com named after the
BIGGEST river in the worldBIGGEST river in the world””
We see our customers
as invited guests to a
party, and we are the
hosts. It's our job
every day to make
every important
aspect of the customer
experience a little bit
better.
Jeff Bezos
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AMAZONAMAZONHistoryHistory
History
• Founded : 1994 Seattle Washington, U.S.
Founder : Jeff Bezos
• “Anything they might want to buy on
internet”.
• Web's most successful pure online retailer.
• “Internet was evolutionary , only the big early
on company would survive”
Jeff Bezos.
• Started with selling books, CDs and DVDs.
HistoryHistory
• Pass through explosive early growth, huge
loss, then on to profitability
• First profitable quarter in fall 2002, first
profitable year in 2003.
• Face a big fluctuation from 1999-2008.
• Stock price swing from $6 - $105 per share.
• Sites in US, Japan Germany, UK, French and
Canada.
HistoryHistory
• In 2002, Diversified to other products.
• Objective
“Offer the Earth’s biggest selection and the
be Earth’s most customer-centric company
where customer can find and discovery
anything they may want to buy.”
HistoryHistory
• Path to Success
� Lowest Price.
� Best Selection.
� Convenience.
• Millions of Unique new ,used and collectible
items
• 11 Major Categories of Goods
�Feature Rich content
�User's review content
�Fast , Reliable
�Ease of use
““To be Shopping PortalTo be Shopping Portal””
• Provide online shop who rents Space from
Amazon
• Bring user to other places on Web , if things
are not found on Amazon.
• Competition
• Market Place : Ebay
• Portal : Yahoo ,MSN and Google.
AMAZONAMAZONVISION VISION
STATEMENTSTATEMENT
Vision
To be earth's most
customer centric company; to build a
place where people
can come to find and
discover anything
they might want to
buy online
AMAZONAMAZONBUSINESS BUSINESS
MODELMODEL
1994 1994 -- 20002000
• From Brick-and-Mortar to E-tailer
• 1 Click Shopping
• From 1 department to 10 departments
• Acquire many other business company
– IMDB
– Alexa
– A9
20032003
2003
A9.com > Product Search
• Customer-Focused
• Search Inside The Book
Clickriver Ads > Advertising Network
• Interface like Google Adwords
• Matching Services to Content
20062006
2006
March introduces Amazon Web Services
• Simple Storage Service (S3)
• Elastic Compute Cloud (EC2)
• Simple Queue Service (SQS)
• SimpleDB
• Flexible Payments Services (FPS)
• Amazon Mechanical Turk
Model I :Model I :RETAILERRETAILER
Model I : RetailerModel I : Retailer
Offer customer 3 things
• Lowest price
• Best selection
• Convenience
Model I : RetailerModel I : Retailer
Offer new, used, collectible
item of 11 category :
• Books
• Movies, Music & Game
• Digital Downloads
• Computers and Office
• Electronic
Model I : RetailerModel I : Retailer
Offer new, used, collectible
item of 11 category :
• Home and Garden
• Grocery, Health and Beauty
• Toys
• Kids and Baby
• Sport and Outdoors
• Tools, Auto and Industrial
Model I : RetailerModel I : Retailer
• Cookies
• Recommend
Model I : RetailerModel I : Retailer
• Search Engine
• Information
Model I : RetailerModel I : Retailer
• Customer Review
• Ranking
Model I : RetailerModel I : Retailer
• Free Shipping over $25 (for some item)
• Amazon Prime : paid $79 Annual Fee to get
2-Day shipping free.
• Traceable Order
Model II :Model II :MARKET CREATORMARKET CREATOR
Model II : Market CreatorModel II : Market Creator
Merchant service
Enable 3rd parties to integrate their products into
Amazon’s web site and use Amazon’s customer
technologies (started on 2002)
• Amazon Market place (individual and small
business)
• Merchants@ program (large and branded
business)
Model II : Market CreatorModel II : Market Creator
• Amazon Market place
– Only product in Amazon’s category
Model II : Market CreatorModel II : Market Creator
Amazon Market placeAmazon Market place
- Merchant must register
- Merchant’s product will show on Amazon’s site
- Amazon Collect Money (include Shipping cost)
- Merchant ship product to customer (Amazon will
support transaction cost)
- Amazon take $0.99 + referral fee 6%-15%
Model II : Market CreatorModel II : Market Creator
• Merchants@ program
Model II : Market CreatorModel II : Market Creator
• Merchants@ program
– Paid $39.99 per month + Referral Fee
– Merchant Upload their Inventory
Model III :Model III :SERVICE PROVIDERSERVICE PROVIDER
Model III : Service ProviderModel III : Service Provider
• Fulfillment By Amazon (FBA)
• Payment Solution
Fulfillment by Amazon Fulfillment by Amazon ((FBAFBA))
• Store your products in Amazon's fulfillment
centers, and we directly pack, ship, and
provide customer service for these products
Fulfillment by Amazon Fulfillment by Amazon ((FBAFBA))
• There are no additional set-up charges or
subscription fees
• Fulfillment fees vary depending on the type of
item (Media or non-media), its dimensions
and weight, and the shipping method used
Payment SolutionPayment Solution
• Checkout by Amazon
• Amazon Simple Pay
• Amazon Flexible Payments Service (FPS)
Checkout by Amazon™
• Use shipping addresses and payment methods
stored in their Amazon.com accounts
• Pricing : Fees are assessed on a per-
transaction basis. There are no start-up
charges, monthly charges, hidden fees, or
long-term contracts
Checkout by Amazon™
• Use Amazon's 1-Click® and other tools for
sales and post-sales activities
• Express Lane Checkout Experience
• 1-Click® Checkout Experience
• Amazon PayPhrase Experience
• Standard Checkout Experience
11--ClickClick®® Checkout Experience Checkout Experience
Amazon Simple PayAmazon Simple Pay
• Use shipping addresses and payment methods
stored in their Amazon.com accounts
• Pricing : Fees are assessed on a per-
transaction basis. There are no start-up
charges, monthly charges, hidden fees, or
long-term contracts
• Payment occurred at Amazon Website
Amazon Simple PayAmazon Simple Pay
• Amazon Simple Pay Standard
• Amazon Simple Pay Subscriptions
• Amazon Simple Pay Donations
• Amazon Simple Pay Marketplace
Amazon Simple Pay StandardAmazon Simple Pay Standard
Amazon Flexible Payments Service Amazon Flexible Payments Service ((FPS)FPS)
• Offers developers unmatched flexibility in
how they can structure payment instructions.
These instructions impose conditions and
constraints on money movements and can be
set by both senders and receivers of funds
Amazon Flexible Payments Service Amazon Flexible Payments Service ((FPS)FPS)
• Accept one time payments on your website
• Execute periodic or delayed payment features
required by subscription
• Facilitate transactions between a buyer and a
third party seller
Model IV :Model IV :ADVERTISEMENTADVERTISEMENT
Model IV : AdvertisementModel IV : Advertisement
• Product Ads on Amazon
• Advertise with Amazon
• Advertising for Service Providers
Product Ads on AmazonProduct Ads on Amazon
• Product Ads is an
advertising program
that puts your products
in front of millions of
Amazon.com
customers.As a seller,
you simply upload your
product catalog and set
your cost-per-click bids
and daily budget.
Advertise with Advertise with AmazonAmazon
• Advertise your
products through online product ads,
online display
advertising or offline package inserts.
• List your services
next to related
products
Advertising for Service ProvidersAdvertising for Service Providers
• Clickriver Ads offers the unique opportunity to
promote your services
Model V :Model V :WEB SERVICEWEB SERVICE
Model V : Web ServiceModel V : Web Service
• To utilized the $s billon Amazon’s technology
– Simple Storage Service (S3)
– Elastic Computer Cloud (EC2)
– Simple Queue Service (SQS)
– SimpleDB
Model V : Web ServiceModel V : Web Service
Model V : Web ServiceModel V : Web Service
• WebStore
– Create Web using Amazon’s Framework
Model VI :Model VI :AFFILIATEAFFILIATE
Model VI : AffiliateModel VI : Affiliate
• Amazon Mechanical Turk
– Provide a marketplace for work that requires
human intelligence
– offers access to a virtual community of workers
that are available to help you accomplish your
business goals. A robust set of APIs and command
line tools enable you to programmatically
distribute tasks that require human intelligence to
a widely distributed, on-demand workforce
AMAZONAMAZONBUSINESS
PERFORMANCE
Business PerformanceBusiness Performance
• revenue primary from selling products
– 65% from media sales like books, CDs, DVDs and music from streaming service.
– In 2007, 62% of its revenue ($9.2 billion) is from the sales of media, only 37% from electronics and other general merchandise.
– Still not yet achieved the product diversification of offline mass-market merchants such as Wal-mart, Costco or Sears.
• International Organization
– In 2007, $6.7 billion from Amazon is 45% of $14.835 Billon of gross revenue offshore, which grew up by 39% in sales.
AMAZONAMAZONBUSINESS STRATEGY
Business StrategyBusiness Strategy
• Maximize growth in sales volume
– free shipping for Amazon’s retail (increase order
size by 25%)
– shorter order fulfillment times
– Accelerated shipping
– greater product selection
– Amazon Market place and Merchants@ program.
– Amazon’s syndicated stores program
Business StrategyBusiness Strategy
• cutting prices to the bare bone
– optimized the location of storing goods, size of
shipment
– consolidate order into larger batches
– use “Postal injection” (trucked package to U.S
Postal system center)
AMAZONAMAZONCOMPETITION
CompetitorsCompetitors
• E-tailer Dimension
• Web Portal Dimension
EE--tailer Dimensiontailer Dimension
• Direct - Online
– Clicks: eBay.com, buy.com
– Bricks-and-clicks: Wal-Mart, Target
• Indirect - Offline
– Retailers (Physical stores)
Web Portal DimensionWeb Portal Dimension
• Yahoo
• MSN
• etc.
AMAZONAMAZONSOCIAL AND
LEGAL CHALLENGE
Lawsuit Lawsuit –– Toys Toys ““RR”” usus
• Toy “R” us sued Amazon over what it claimed
was its exclusive right to sell toys on Amazon
• Toy “R” us claimed 4000 items is slipped
through the cracks.
• Toy “R” us won suit against Amazon
Variable Pricing
• Charges different prices for the same
products depending on who visits, and that's
hacking off some loyal customers
• This leads to creating unequal !!
10? 20? 15? 17?
AMAZONAMAZONFINANCIAL ANALYSIS
Income Statement
• Year over year, Amazon.com Inc. has been able to grow their bottom line from $476.0M to $645.0M primarily through revenue growth ($14.8B to $19.2B).
• Offer best services such as FREE Super Saver Shipping, Fast delivery
• Offer the Earth’s Biggest Selection and to be Earth’s most customer-centric company where customers can find and discover anything they may want to buy
• Heavily on affiliates and third party merchants to drive sales (no increase in marketing, administrative cost)
• For while the costs associated with cost of goods, Selling General & Admin Expense and income tax all increased as a percentage of sales but eliminating marketing in offline magazines and TV.
• Interest expense also decreased as a result of decreasing in Long Term Debt
• The growth in top line revenues contributed enough to still see net income improve
Income Statement
Income Statement - Quarterly
Drop in Q2 2009 came from payment to Toys
"R" Us $51 million to settle a lawsuit filed by the
toy retailer in May 2004.
Income Statement
Balance Sheet
• This company's debt to total capital ratio, at 19.90%, is in-line with the Internet and Catalog Retail industry's norm
• Operating Profits are more than adequate to service the debt.
• Amazon stretched out its bill-payment resulted in accounts-payable days have risen from 49.25 days in 2003 to 59 in 2008 before jumping to an average of 64.6 so far in 2009.
• Free cash flow has grown to $1.36 billion in 2008 from $346 million in 2003.
Balance Sheet
The stock has been erratic over this recent 10 years; however, it seems to
be a upward trend
AMAZONAMAZONFUTURE PROSPECTS
Business Model InnovationBusiness Model Innovation
“The key to sustained success is
business model innovation”
Amazon GiverAmazon Giver
Amazon GrapevineAmazon Grapevine
Amazon Giver & Grapevine Amazon Giver & Grapevine -- BenefitsBenefits
•See the Amazon wish list of your friends via
•See the Amazon activities of your friends via
Facebook, e.g. Product review, rating, etc.
•Currently, It’s no longer
Facebook and AWSFacebook and AWS
SanptellSanptell
Snaptell - "Accumulated Signed Gradient" (ASG).
Snaptell Snaptell -- BenefitsBenefits
• New way of Product Search
• Easy to find product you see
KindleKindle
• E-book reader
Kindle Kindle -- BenefitsBenefits
• Pricing Advantage (Lower Price)
• Immediate Delivery Book
• Handy
Amazon Affiliate ProgramAmazon Affiliate Program
Amazon Affiliate Program Amazon Affiliate Program -- BenefitsBenefits
• Earn commission up to 15%
• Expand channels around the world
• Similar to Google Adsense
Affiliate ProgramAffiliate Program
“The answer, we believe, is that Jeff Bezos
understands that the key to sustained success is
business model innovation”
Josh Suskewicz,
INNOSIGHT