Operational Strategy
• Cost-Leadership – Low and Fixed Prices, Bundle Discounts, Future Discounts. • Customer Differentiation – Personalization, Convenience, Quality. • Focus Strategy – Takes one of the above applies to a market niche a specialized area within a customer group.
Source: Amazon, 2009
Strategy
“We don‟t make money when we sell things; we make money when we help customers make purchase decisions”
- Jeff Bezos, Founder.
Consumers
84 Million Active Customers as „08
Kindle
Music Downloads
On Demand Videos
Selling On Amazon
Over 1.5MM Active Sellers, Up 18% Y/Y
Selling on Amazon
“Be afraid of our customers, because those are the folks who have the money. Our competitor are never going to send us money”
- Jeff Bezos, Founder
Technology
“If we can get this to work, it will be big”
- Jeff Bezos, Founder.
Amazon's first gateway page
Amazon's Today’s page
Amazon's first office building
Seattle headquarters building
• How much money has Amazon spent on real state (headquarters, warehouses, etc)?
– Amazon owns zero real estate!
• In 2003 Amazon passed the $5 billion sales mark – it took Wal-Mart 20 years to achieve this. Amazon has only 13,900 employees (2006) , Wal-Mart has 1.9 million employees (2007).
• Customer is the King – Create an experience for him • „Culture of Metrics‟ Customer‟s each „click‟ on website is recorded- a valuable asset for Amazon • Allows clear sensing of customer needs & preferences • Formation of „S Team‟ to address strategy issues • Customer is the key at all levels in the Organisation • Customer Loyalty and repeat purchase • Amazon do not over emphasise competitors – It has turned some of them like Borders in to collaborators
• Developers: Who want to use Amazon‟s developing services like Developing websites/portals, Hosting, Web Services, S3 (Storage), Checkout Services, etc.
Source
Comparing Technology
Source : /blogs/comparingpaas.png
Corporate Responsibility
Whole World is market place….. [Strategy Cont..]
• Strategic change in vision from being an online bookstore in 1995 to becoming world’s largest online store
• Leveraged on the strength of brand value and business model • Very low fixed costs • Geographical expansion in Canada, Western Europe, Japan & most recently China.
Financial Performance
Amazon Vision „„Earths most customer centric company - Start with customers and work backwards‟‟
-Jeff Bezos, Founder
“Data is King at Amazon” – Jeff Bezos, Founder & CEO
Interesting facts about Amazon
• What was the first name for the company (before Amazon)?
– Cadabra Inc.
• Where does the „Amazon‟ name come from?
– The name reflected the vision of Jeff Bezos, to produce a large scale phenomenon like the Amazon river.
Source:
Fulfillment By Amazon (FBA)
Available in US, UK, DE & JP; Beta in FR
Amazon Enterprise Solutions
Checkout By Amazon
[Strategy Cont…]
• A blend of traditional retail principles and innovative application of marketing practices. • Now after een years, Amazon has a revenue of 19 billion USD.
Who are Amazon?
• (NASDAQ: AMZN), a Fortune 500 company based in Seattle, Washington USA. It was one of the first major companies to sell goods over the Internet and was one of the iconic stocks of the dot-com bubble.
Amazon‟s Strategy
• Three Customer Sets
– Consumers, Sellers and Developers
[Strategy Cont…]
• Consumers: Who buy products on Amazon (including Amazon‟s products). • Sellers: Who want to sell products on Amazon (including Amazon)
Relationships matter [Strategy Cont…]
• Customers – Effective Process management – Satisfied Customer – Low costs • Competitors – Turn them into collaborators – Superior Technology Platform – value for competitors to use the platform, advantage for Amazon to offer wider choice • Collaborators – Amazon Marketplace – Customers and retailers can sell their new and old items – Amazon Merchants – Larger third party Merchants – Amazon Affiliate Programme- Amazon Associates – Advertising Amazon‟s Products on website.
Expansion
Global
International
International
Amazon …an experience [Strategy Cont..]
• Selection – Wide product range – Books, videos, many more …and they have a category „Crazy Things‟ under Toys & Games ! • Convenience – Selection available on your screen – Various price ranges – New & Used – Delivery in shortest possible time • Prices – Prices revised daily – Many times Free Shipping