...fortify in the tablet market as new entrants such as Amazon, Samsung, Motorola and Google battle to overrule the already dominant and established Apples, iPad. Jeff Bezos, creator of amazon chose to step out of his area of comfort, away from the online bookstore in attempt to overthrow the tablet industry, he did so an was able to capture half of the non-Apple tablet market. It can be said that Amazon were the one who introduced e-books because of Jeff Bezos innovation and urge to simplify the everyday lives of individuals. Despite the success the Kindle Fire experienced as it entered this market, amazon was moving further away from what they had originally specialized in, and closer to a market which was already established long before they decided to enter. A detailed analysis of Amazons internal and external environment is needed in order to be able to fully understand the condition of the issue and to be able to formulate a successful recommendation that will align with the corporations goals. The internal analysis includes the companies features while the external analysis was conducted using Porters five forces study. The three alternatives that amazon could pursue were: to continue to compete in the tablet market, to step away from this industry and focus on the companies strong areas, and to partner with universities in order to stay close to their comfort zone while still expanding. In the long run, Amazon should work towards satisfying their current consumers...
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...Introduction This report conducts External Analysis for Amazon, which includes macro and micro factors, Strategic Analysis, consisting of Porter's 5-force model, SWOT analysis and Marketing Mix, which conclude 7Ps, in order to assist Amazon in extending into a new online service, a social platform named `Amazon Book Club`. Part A: External Analysis 1. The Macro environment 1.1 Economic In recent years after economics crisis, global economy has been gradually improved. GDP, as a measure of a countries’ economy, has been increased in a stable pace in America [1]. At the same time, according to the data from People’s Daily Online, China’s household disposable income reached 20167 yuan in 2014, 8.0 percent increase compared with 2013 [2]. Take China as an example, ‘shopping online’ becomes the hot words in recent years. As it indicates in the chart [3], the scale of the E-commerce market extends gradually. All these figures indicate that people are more capable to purchase and attach more importance to the quality of life. Amazon, in the last 18 months, undoubtedly benefited from this tendency. For example, in the first Chinese ‘shopping overseas festival’ beginning on 28th, November in 2014, the sale increased by 24 times compared with the week before it [4]. 1.2 Political a. Governments’ policies will influence market structure and behavior. For example...
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...of goods. Amazon concentrates almost its entire business in e-commerce. In a nutshell, Amazon’s major line of businesses can be categorized as online retail, Internet services. Amazon situates itself as destination site, where it doesn’t stock everything that it offers. It holds a retail strategy where it acts as a channel for other retailers, or sellers to use its site to sell their goods, and takes a cut of each purchase. Amazon’s use of this strategy has made amazon a leading long-tail retailer, the concept where online stores can drive revenue from much broader set of products that can be achieved in physical store offering a much wider variety of products. Though not as significant revenue driver Amazon also utilizes internet services as almost a line of business, where it leases out server space to other companies and individuals, known as Amazons Web services. Its internet services are strongly connected to its online retail business and kindle library, where it introduced amazon prime, that essentially lays out the all you can eat business model by charging an annual subscription fee. Amazon has also recently expanded its business into manufacturing and distributing kindle tablets, an E-book. Amazon sells the kindles and a very low price, that barely covers cost of production, and relies on the assumption that its consumers will cover the cost of production of its kindle by making additional purchases on the kindle service. Internationally Amazon operates in...
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...Conclusion Amazon is a revolutionary e-marketplace that is both world-renowned and extremely efficient. Amazon has gone from a small company run out of a garage, to a Fortune 100 company run all over the world. Amazon fulfills their mission statement every day by being a customer-centric company that offers over 200 million products at the lowest prices possible. Amazon is a very Background image of page 3 innovative company that creates and manufactures many products. They are always expanding and trying to create new ways to make their company and the lives of their customers better. Amazon’s biggest competition as an e-marketplace is eBay. Amazon currently leads this market by having a more organized, effective, professional, and easy to use website. Furthermore, Amazon’s brand personality is that they are a fast, friendly, innovative company that can be trusted. All of these traits make Amazon the website where most customers choose to do their shopping. Also, Amazon makes their customers their top priority and successfully appeals to their values, knowledge, and interests. Amazon’s two loyalty programs of Amazon Prime and Amazon Visa Rewards Card provide many benefits to their members and make shopping on their website quick and easy. Overall, Amazon has developed into one of the most important and successful companies in the world today. Background image of page 4 Porter’s Five Forces analysis In order to get a broader picture of the competitive structure of Amazon...
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...Amazon.Com - Financial Analysis Case Study Name Institution Course Date Amazon.Com - Financial Analysis Case Study Introduction The bookselling business is one of the stable developing industries which have an estimated a total sale of $27 billion in 2006. The vending of the books mainly relies upon distinctive seasons. The business has different clients who purchase various types of books which also incorporates the professional books, trade books, college books, and mass business paper-back books. With solid competition from the corporate sector, the organizations are strongly concentrating on adopting distinctive ways and means to win more customers and getting a high market share in the company. Company Overview Amazon.com is thought to be the market player in the e-trade industry; that is, bookselling. The company was established by Jeff Bezos, who concentrated on upgrading the book shopping experience of buyers, with the development and better approaches to selling books via the web. One of the key players of the company is Noble and Barnes. Initially, the company began as an online bookshop that has transformed into one of the biggest online retailers offering items ranging from movies and music to furniture and artwork. As its website states, "it is by configuration that technological development drives the growth of Amazon.com to offer clients more different products, at lower prices, and even more conveniently." In this paper, we will review the financial...
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...Financial Analysis Project Throughout the last decade, Amazon has become one of the most sustainable companies within its industry. One of the major reasons that Amazon has been able to achieve a long term competitive advantage is by offering superior pricing power, capitalizing on a large market share and creating a well-known brand name. Through these achievements Amazon has been able to produce long term advantages that have made it difficult for other companies to duplicate. Amazon has an elite status within itself, throughout out the past decade it has both surpassed bench marks and created new ones. Amazon has set the bar so high that it would be extremely difficult for a company to reproduce their success. Amazon was first developed when e-commerce was in an infancy stage. This gave Amazon the opportunity to create and expand on the platform that we know today. It would prove to be very difficult if a similar firm were to try and duplicate the same success as Amazon. A similar firm would need to develop the credibility and reputation that Amazon has taken years to develop. Then it would need to establish a large client base that can bring together both buyers and sellers. One of the second major tools that a new firm would need to be competitive with Amazon is large amounts of capital. If a firm was to borrow capital the result would cause the company to become highly leveraged, which would mean that the margin of error would...
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...SWOT Analysis Taylor Freeling Bus/211 1-25-16 SWOT Analysis Amazon.com is a world wide online retailing company that is the largest in the U.S. Amazon started out as an online bookstore that later started selling movies, music, audio books, electronics, apparel, furniture, food, and now has its own line of consumer electronics. It is a company that has rapidly grown and will steadily grow each year. A companies SWOT analysis is a tool that defines the companiess strengths, weaknesses, opportunities, and threats. SWOT helps a company asses what the organization can and can not do as well as potential opportunities and threats. A SWOT analysis determines what will help a company accomplish its objectives and what obstacles the company needs to overcome to reach the desired results. Amazon has many strengths such as cost leadership strategy, quality products and services, strategic acquisitions, and efficient distribution. These strengths are what help the company keep returning customers as well as creating new ones. Amazons cost leadership strategy is a strength because this means that Amazon produces their products and services at a lower cost than its competitors. Amazon is a reliable, convenient, and know for its low prices and fastest shipping as well the great reputation for customer service. This is why quality products and services are among the companies strengths. Another strength Amazon has is the companies strategic acquisitions. This means whatever the...
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...was optimistic for this brand new business model. People still enjoy the physical store, and skeptical on online shopping. However, with more than a decade efforts, Amazon was named the world’s top brand ahead of common names like Coca-Cola, Microsoft, and so on. Amazon and its online business model had creased more than $34 billion revenue, and equally 80 million people visit Amazon.com every month. In order to achieve greater success, Amazon need to overcome the challengeable external environment, strengthen organization structure, fulfill the product line, and leverage its brand strategy. CURRENT MISSION, GOAL, AND STRATEGY The current mission statement for the Amazon.com is “to be the Earth’s most customer-centric company, where customers can find and discover anything they might want to buy online, and endeavor to offer customers the lowest prices.” Amazon added 13 new fulfillment centers in 2010 and another 15 new center in the 2011 and company is planning to launch cloud technology in 2011 which allowed customers to store and access music. The company believed that in the nearly future this technology could bring the internal strength and competitive advantage for Amazon.com. INTERNAL ANALYSIS: See attached IFEM Amazon.com internally with an IFEM score of 3.25 FINANCE: Amazon is on strong financial position now; online sales reached $9.91 billion in the 2nd quarter of 2011, nearly 51 percent increase compared with last year. According to...
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...I have been looking at some of the work of Rob Grant to analyse resources and capabilities, mainly examining work in and around Resource Based Theory of Competitive Advantage and implications for Strategy Formulation. So hopefully have covered some differing aspects to use for Amazon. Strategic Planning Processes. I believe an effect method for Amazon to undertake such an analysis would be to examine: • Value Chain • Resources Based View • Financial Analysis Use of a Value Chain Analysis for Amazon Amazon have developed a value chain analysis of its’ own to internal asses how it can operationally best add value and maintain a competitive advantage. They have used the value chain model from Michael Porter's book, "Competitive Advantage: Creating and Sustaining Superior Performance." [pic](Source: Bua Consulting) Example of a Strategic Plan Model - Amazon Internal Analysis, Strategic Planning Tools, Strategic Planning Models Primary Activities and Support Activities Primary activities are those needed to produce a product or services for the end customers. These activities typically include: • Inbound Logistics: receiving goods from suppliers, and storing and moving those good • Operations: Manufacturing or assembling the product • Outbound Logistics: Sending the goods to wholesalers, retailers or directly to the end customer • Marketing and Sales: Marketing involves understanding customer needs, communicating those needs...
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...You need to say something rather than just launching into it. Option 1: Cost Leadership With a long term strategy based on the ability to be cost leaders in the online retail market, Amazon Inc. strives to ensure all corporate level decisions adhere to this goal. REFERENCE Prices on Amazon.com are around the lowest in terms of products sold and the background services that make it possible for third party traders to make use of the marketplace. This strategy employed has made it possible for Amazon to recognise significant increases in revenue; however they have recently begun to notice changes in their profit margin. A loss of $0.1 billion was recorded last year, REFERENCE which was attributed to modification made to their distribution centres and the underwriting of costs of production for the Kindle Fire. There is a need to for Amazon to increase their profit while striving to maintain the balance between low costs in order to not lose their customers. In order to achieve this they should look to increasing the costs associated with Third Party traders. REFERENCE These fees include: * Subscription Fees * Transaction Fees * Advertising Fees * Affiliate Fees There are risks attached to pursuing this proposed strategy as it involves increasing prices which always serves as a deterrent to customers. Some of which include government regulations, new entrants and pre-existing customers confidence. * Government Regulation: any unfair increases in subscription...
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...Industry Analysis 3. Financial Analysis - Profitability & Growth Analysis - Cash Flow & Cash Uses - Liquidity & Solvency 4. Outlook & Investment Recommendation 1. COMPANY ANALYSIS Amazon has continually been growing; although the company suffered from a $ -241 M net loss at $ 89 B revenue in 2014. Analysis based on latest audited data FY 2014 by EY. REVENUE & NET INCOME Revenues of $ 89 B with a net loss of $ -241 M in 2014 HISTORY Jeffrey Bezos launched Amazon.com in July 1995 SOURCES OF REVENUE Products (online retail with 79% / $ 70,080 M) and services (= 21% / $ 18,908 M) compuDng services, consumer electronics, digital content & adverDsing services DIVERSIFICATION Constant efforts to diversify by acquiring companies/start-ups and supported by high investments in R&D (e.g. IntegraDng the value chain by creaDng digital content provided online) CORPORATE STRATEGY Amazon at a glance ROE BREAKDOWN ROE -2.35% = NI Assets -241 47,332 -1% X Assets Equity 47,332 10,244 Main focus on strong growth above market average to gain market share rapidly since the company’s foundaDon. Focus on expansion esp. in Europe in 2016 (Example: + 2,500 employees, +3 R&D centers and + 10 warehouses in U.K.) 462.07% ESADE MBA - Class of 2017 - Section A - Group 8 3 1. Company Introduction 2. Industry Analysis 3. Financial Analysis - Profitability & Growth Analysis - Cash...
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...An In Depth Analysis of Amazon Inc. In Relation to Information Technology Systems Table of Contents History page 3 Management page 4 Competitive Advantage page 5 Five Forces Model page 6 IT Strategy page 8 Value Chain page 9 E-Business page 13 Operating Systems page 15 Risk Assessment page 16 SWOT Analysis page 17 Supply Chain Management page 19 Customer Relationship Management page 19 Current Issues page 21 Recommendations and Conclusion page 22 Exhibits page 24 History Amazon.com, Inc. is a multicultural electronic commerce company founded in America by Jeffrey P. Bezos in 1994. It was originally named Cadabra, but was renamed after the Amazon River to bring into the picture a more powerful meaning (mashable). Amazon, since its release in 1995, has since become one of the Fortune 500 e-commerce company. In the business world, Amazon is currently the largest online retailer in the world. It manufactures consumer electronics, most widely known is the Amazon Kindle e-book reader, and has an extensive cloud computing service. Amazon’s start-up was initially only an online bookstore, giving Amazon an advantage of having more and readily available books than any long-established brick-and-mortar book store. By the last 1990’s, Amazon’s success had enabled an expansion from an online bookstore to a wide variety of other products...
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...Amazon is an American international electronic commerce company formed by Jeff Bezos in 1994. It is one the largest online retailer in the world.[1] Below is the analysis for the market valuation of Amazon. PORTER’S FIVE FORCES ANALYSIS [8] Threat of New Entrants When it is easy to enter the industry, the threat would be big. A bigger threat will lower the potential profitability in the industry. Regarding the industry, the market entry barrier is low because the technology requirement is not high. However, economic of scale enables Amazon to provide services and products at a competitive low price. Also it has built up its reputation and accumulated a certain amount of loyalty customers. It is difficult for a new startup company to compete with Amazon. Profitability of Amazon is high due to the small threat of new entrants. Threat of Substitute Products/ Service When there are more substitute products or services, the threat would be larger and the profitability of Amazon would be lower. Amazon is an online retailer selling various products. It is an innovative service and hence has a high brand recognition. Compared with substitute service such as service of buying on customer’s behalf, Amazon can provide more confidence to customers. Also, traditional retailers are also a substitute service to Amazon. However, there would not be a big conflict between Amazon and the traditional retailers because of the consumer behavior. This means some consumers would insist in shopping...
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...Risks analysis: * Cash flow risk. Since the company opened its business, it reported $1.2 billion in accounting loss, and its operating cash flows had been negative almost every quarter. Operating cash flow ratio measures how well current liabilities are covered by the cash flow generated from a company's operations. All the ratios are less than 1, which means that Amazon has generated less cash over the year than it needs to pay off short-term liabilities as at the year end. This may signal a need to raise money to meet liabilities. * Inventory risk. The inventory turnover ratio dropped from 8.5 in the first quarter of 1998 to a low of 2.9 in the first quarter 2000. A low turnover is usually a bad sign because products tend to deteriorate as they sit in a warehouse. It shows that the company wasn’t managing its sales growth well. * Financial structure risk. At the end of the first quarter of 2000, the company’s debt to capital ratio was 99%, which shows the company has much more debt than equity. The company uses more debt financing than equity financing. A company with high debt-to-capital ratios, compared to a general or industry average may show weak financial strength because the cost of these debts may weigh on the company and increase its default risk. * Strategic partnership risk. Amazon was making minority investment in many e-commerce companies. But there was an illusory quality relationship between Amazon and other companies. Amazon had begun...
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...Amazon.com: An E-Commerce Retailer A case report prepared for MG 495 Business Policy Fall ! 2014 Amanda Ransdell August 23, 2014 AMAZON.COM: AN E-COMMERCE RETAILER I. INTRODUCTION Amazon.com is one of the most prominent names in the e-commerce sector and has been for many years. In order to stay relevant in an ever-expanding market, Amazon.com has to continue to evolve. A. EXECUTIVE SUMMARY 1. Amazon.com wants to expand to keep up with the growing online marketplace. Their goal is to expand the product selection while controlling costs. They have two options to choose from to continue expanding their business one is to expand their business in online auctions. Because of the continued need for an intermediary in these types of transactions, Amazon.com would be able to market this additional service to both its current customer base, through the use of personalized emails, and to new customers through a general advertising campaign, including television and print ads. There second option was to develop and implement a business-to-business (B2B) exchange for suppliers, manufacturers, distributors, and retailers to use. Because the largest percentage of e-commerce sales resulted from transactions conducted on 13213 exchanges, this opened up a large potential market for Amazon.com to expand into. 2. My solution is to create the B2B exchanges, as it seems the most likely to provide the kind of expansion that Amazon.com is looking for while still...
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