BRIEFLY ANALYSE THE COMPANY EXPLAINING WHAT YOU SEE AS ITS MOST IMPORTANT FEATURES IN RELATION TO EACH OF THE THREE HORIZONTAL LAYERS IN THE FRAMEWORK PROVIDED, AND PROVIDE JUSTIFIED ANSWERS TO THE THREE QUESTIONS THAT FORM THE VERTICAL COMPONENTS OF THE FRAMEWORK (‘WHAT MAKES IT SUCCESSFUL?’, ‘WHERE DOES IT POSITION ITSELF?’ AND ‘HOW DOES IT ACHIEVE SUCCESS?’).
THE FRAMEWORK
SECTOR AND OWNERSHIP – PUBLIC, PRIVATE OR THIRD SECTOR. OWNED BY STATE, SHAREHOLDERS OR OTHER.
Amazon is a privately owned but publicly traded company on the NASDAQ stock exchange. The company is
essentially owned and controlled by the shareholders.
Private SectorPublic Ownership
OFFERING – PRODUCT/ SERVICE/ MIXED
Services: Web services; Amazon credit card; Love film (rental service); Marketplace
Products: books; consumer goods; Audible (audio books); kindle; e-books
Mixed, they have products and services
FINANCIALS – TURNOVER, SIZE, GROWTH, PROFIT, RATIOS
Turnover: $48bn
Size: Money, employment (depending on argument); number of customers and how that has grown. Number of services.
Growth (LY vs TY): $14bn increase (29.16%)
Profit: $631M (2011) $1152M (2010) - (Decrease: $
45.3%)
Financial Ratios: Gross Profit Margin (Gross Profit * 100 / Sales Revenue)10,789 * 100 = 1,078,900 / 48,077 = 22.44%
POSITION – SUPPLIERS/ CUSTOMERS
Suppliers: Market place allows individuals to become suppliers.Book publishersServer and infrastructure providersUtilitiesCouriersPackaging suppliersCredit card supplier
Customers:Online consumers – book readers – segment customers – who buys what – customer retention – customers that shop only at xmas. How can ypou pull them in? SME owners – web services
TARGET MARKET – RETAIL, BANKING, MANUF
SME’s for web services & product advertising & distribution
Internet users, willing to purchase online
Online retail & online services
BRICKS/CLICKS – INFRASTRUCTURE; TECHNOLOGY; STORES
Clicks – solely online; technical infrastructure in place to support their store-front and their back end web services. They have a system in place to manage their supply chain, which is passed on to end users of their service.
Servers; domain name servers; virtual store;
Data centres etc.. Warehouse, depots
BUSINESS MODEL – HOW THE BUSINESS ACHIEVES SUCCESS
By incorporating a wide range of products; aimed at a large demographic. By targeting SME’s Amazon is able to expand their
service offering to businesses in the form of web services and hosting. By making products available and desirable to such a
wide audience, they achieve financial success.
They tailor their services and recommendations to each individual customer. This means that their product
recommendations are relevant to the customer.
Different delivery options cater to different users needs, meaning that customers can receive goods as quickly as they need them. Amazon Locker is used as a delivery ‘depot’ for
amazon parcels. This removes the last-mile delivery costs, and provides a centralized, secure location for customers to retrieve
their goods.
UNIQUE SELLING POINT– WHAT DOES IT OFFER TO SURVIVE AND THRIVE
Customer satisfaction; recommendations; targeted email marketing; one click buy;
Sense of trust – buying from a random merchant through Amazon
MARKETING – WHAT APPROACHES AND CHANNELS DOES IT USE
Email based marketing; Kindle TV adverts; Word of mouth; Customer recommendations
WHAT MAKES IS SUCCESSFUL
USP – delivery options & customer centred approach, marketing methods (targeted mail)
Relationship with suppliers – marketplace gives vendors the ability to leverage Amazon’s trusted brand name
Consumer protection & reviews provide advice which adds value to their service
Incentives for reviews – free deliveryEasy returns policy – instils trust
Private ownership – incentive of money
WHERE DOES IT POSITION ITSELFAmazon position themselves as a provider of a wide range of consumer goods, delivered via multiple vendors from their market place services.
Amazon are able to leverage other manufacturers, and suppliers delivery, manufacturing and service offering, and deliver them as if they were its own. The multiple vendors mean that Amazon positions itself as
a one stop shop to buy multiple products from different geographical locations, with a single one-click checkout process. This simplifies the
process for the customer and enhances their experience with the company.
The web-services aspect of the business model covers the business from a SME standpoint. This means that the company positions itself to cater
to both the individual consumer market AND the small and medium enterprise market.
Amazon also positions itself as an entertainment provider, by adopting Love Film and Audible services to offer as a consumer
WHERE DOES IT POSITION ITSELF
The company USP (as discussed) centres around their ability to instil trust in their consumers and their reputation as a trusted brand. By
being well known as a trusted consumer brand, they position themselves for success in the SME market with their webs services.
By enhancing the customer experience with an easy to use (one click buy and website) they are able to further build their reputation with individuals, which further helps to support the notion that their web
services can support their SME’s without a substantial learning curve.
WHERE DOES IT POSITION ITSELF
Specific services for example mother & baby
Subscribe and save Caters for peoples everyday (consumable) needs
Frequent users obtain a free delivery service
Target entertainment industry – love film & audible
HOW DOES IT ACHIEVE SUCCESS
Critical numbers – quick comparison with competitors
Maybe discuss how operational costs (R&D) help support new services
Profit margins (gross and Net)
Bricks and clicks – solely online – no storefront costs, limits the number of staff required, by utilizing marketplace it enables
amazon to limit staff numbers (leveraging from other sellers). 24/7 selling; IPHONE & ANDROID APP (buy on the go)
Marketing – analyses buying habits and trends to market to specific individuals
THE FRAMEWORK
