THE PRESENT AND THE FUTURE

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

Low-cost leadership

strategy

Continuous alignment of operations• Made market expansion and

product development

possible

Wide range of products &

servicesGlobal coverage

Customer satisfaction and

retention through premium

subscription

Rode out the storm of global

crisis

PROBLEM DISCUSSION

The wonderings of Bezos: Is amazon spreading too thin, or are your investments positioning the company for the future?

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

PROBLEM DEFINITION

How can Amazon Acquire new-to-company customers?

Long Term Problems Short Term ProblemsCost reductionGrowthMaintenance of profitabilityDifferentiation

Finding new areas of growthIncrease of profits

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

MULTINATIONAL E-COMMERCE COMPANY

B2C B2B C2C

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

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

RANGE OF PRODUCTS AND SERVICES

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

ACQUISITIONS

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

CORPORATE GOALS

Innovation

Cost-leadership

Bias for action

Customer obsession

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

COMPETITIVE ADVANTAGES

Technological expertise

Economies of scale

Talented workforce

Brand reputation

and recognition in

established markets

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

FINANCIALS$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

CHALLENGES

Differential difficulties

Online retail not able to offer

fast gratification

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

PROBLEM DEFINITION

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

ALTERNATIVES

Recommendation

C: Expansion of Amazon Web

Services

B:Tablet and

Smartphone Development

A: Scandinavian

expansion

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

SCANDINAVIAN EXPANSION

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

WHY SHOULD YOU MOVE INTO THE SCANDINAVIAN

MARKET?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

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

TABLET AND SMARTPHONE DEVELOPMENT

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

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

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.

EXPANSION OF AWS (AMAZON WEB SERVICE)

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

WHY SHOULD YOU FOCUS AWS?

Currently only 5 % of the revenue Young service

Have potential to increase the number of customers

Cloud service got potential for

growth

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

Aligns with long term perspective

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

SWOT MATRIXStrengths

•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 competitorsA B

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

RECOMMENDATION– SCANDINAVIAN EXPANSION

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

RECOMMENDATION – SCANDINAVIAN EXPANSION

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

CONCLUSION

Amazon achieves further positioning as low-price leader Increased brand recognition

Larger customer base

Long term growth