Amazon.

com
15/04/2019
BUSINESS MANAGEMENT
Made by:, Aditya, Carolina, Nupur, Christopher, Tejasvi

“The world’s largest online retailer”

Page 1 - About Amazon (Tejasvi)

 Page 2 - About CEO (Nupur)
Page 3 - Geographic Reach
Page 4 - SWOT (Carolina)
Page 5 - Operations (Nupur)
Page 6 - Strategy (Carolina)
Page 7 - Competitors (Christopher)
Page 8 - Mergers and Acquisitions (Aditya)
Page 9 - Sales and Marketing (Christopher)
Page 10 - Financial Performance (Aditya)

About Amazon
➢ Amazon is a multinational technology based company which is
based in America. It has its operations in e-commerce, artificial

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 intelligence and cloud computing. Amazon is the largest e-commerce marketplace and cloud
computing platform in the world as measured by revenue and market capitalization.
➢ It was founded on July 5, 1994 by Jeff Bezos and was started as a book-store which went on
to get more diversified to sell video downloads/streaming, MP3 downloads/streaming,
audiobook downloads/streaming, software, video games, electronics, apparel, furniture, food,
toys, and jewelry. Has a number of employees to be - 566,000 (according to 2018).
➢ The company also owns a publishing arm, Amazon Publishing, a film and television studio,
Amazon Studios, produces consumer electronics lines including Kindle e-readers, Fire tablets,
Fire TV, and Echo devices, and is the world's largest provider of cloud infrastructure services
through its AWS subsidiary.Amazon has separate retail websites for some countries and also
offers international shipping of some of its products to certain other countries.100 million
people subscribe to Amazon Prime.
As of March 2019, the board of directors is:
● Jeff Bezos, President, CEO, and Chairman
● Tom Alberg, Managing partner, Madrona Venture
Group
● Rosalind Brewer, Group President, and COO,
Starbucks
● Jamie Gorelick, partner, Wilmer Cutler Pickering Hale, and Dorr
● Daniel P. Huttenlocher, Dean and Vice Provost, Cornell University
● Judy McGrath, former CEO, MTV Networks
● Indra Nooyi, former CEO, PepsiCo
● Jon Rubinstein, former Chairman, and CEO, Palm, Inc.
● Thomas O. Ryder, former Chairman, and CEO, Reader's Digest Association
● Patty Stonesifer, President, and CEO, Martha's Table
● Wendell P. Weeks, Chairman, President, and CEO, Corning Inc.
Partners :
In 2000, U.S. toy retailer Toys "R" Us entered into a 10-year agreement with Amazon, valued at $50
million per year plus a cut of sales, under which Toys "R" Us would be the exclusive supplier of toys
and baby products on the service, and the chain's website would redirect to Amazon's Toys & Games
category.

About the CEO

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 ➢ The CEO and founder of Amazon is Jeff Bezos.
➢ He is the son of Jacklyn Gise Jorgensen and Ted Jorgensen.
➢ He was born in Albuquerque, New Mexico, United States.
➢ He has a net worth of 15,150 crores USD as of 2019.
➢ He graduated from Princeton University in 1986. He has a degree in electrical engineering
and computer science.
➢ He was married to MacKenzie Tuttle until their divorce this year. They had a total of four
children.
➢ Amazon was founded when he was on a cross country trip from New York to Seattle in the
late 1994.
➢ He makes personal investments through his venture capital vehicle, Bezos Expeditions.

Geographic Reach

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 ➢ Amazon has its headquarters in Seattle, Washington. The European headquarters are in
Luxembourg City.
➢ There around 26 software development centers around the globe and 6 customer service
centers.
➢ It has customers in more than 180 countries and has its stock listed in more than 30 countries.

Competitors

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 ➢ In the media segment, Amazon competes with auction site eBay (EBAY); media game-
changer Netflix (NFLX); Time Warner Cable (TWX); Apple (AAPL) with iTunes; and
Google (GOOG) with its Play Store.
➢ Amazon has several competitors in the electronics and general merchandise segment, many of
which are brick and mortar retailers, including Best Buy (BBY), Family Dollar, Staples,
Target (TGT), Walmart Inc. (WMT), Big Lots (BIG), and SysteMacs. Its online competition
in the electronics and general merchandise segment includes Alibaba Group (BABA),
LightInTheBox Holding Co. (LITB), Overstock.com (OSTK), PCM, Inc. (PCMI), Vipshop
Holdings Ltd. (VIPS), JD.com (JD), Wayfair Inc. (W) and Zulily.
➢ In the third operating segment, Amazon competes with several of the world's largest
companies including CDW (CDW), PC Connection, Inc. (CNXN), Insight Enterprises, Inc.
(NSIT), Oracle (ORCL), salesforce.com (CRM), Accenture (ACN) and Citrix Systems, Inc.
(CTXS), among others.

Mergers and Acquisitions

Amazon has acquired 89 companies and has stakes in around 21 companies.
Its biggest acquisitions include:
➢ Zappos - A retail company worth over $1.2 billion

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 ➢ Whole Foods Market - A grocery store chain worth over $13 billion.
➢ Ring - a home automation company which is worth over a billion dollars.
➢ Goodreads - a social networking
➢ The deal gives Amazon immediate entry into a business that it had been inching into with a
small store in Seattle that features cashless payment and the AmazonFresh delivery service.
➢ While the grocery business is a big part of the US economy, it remains a small percentage of
online sales.
➢ Smaller purchases in 2017 include Souq.com, the largest e-commerce seller of goods in the
Middle East, for about $580 million
➢ Amazon also bought California-based Graphiq, which provides search technology Amazon
hopes to use to improve digital assistant Alexa.
➢ As well as, the Massachusetts-based security camera/video doorbell producer Blink Home,
which will enhance Amazon's in-home delivery service (Amazon Key).
➢ In 2018 agreed to buy PillPack, an online pharmacy, for a reported $1 billion.
➢ PillPack ships medications in pre-sorted dose packaging, coordinates refills and renewals, and
ensures timely shipments.
➢ The company has pharmacy licenses throughout the US and is authorized to deliver in 49
states.
➢ The purchase would add a valuable consumer category to Amazon's warehouse of goods and
increases its presence in health care.

Financial Performance
➢ It is a bit of an understatement to call Amazon.com's recent revenue growth strong.

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 ➢ In online shopping, the company's sales have rocketed nearly 140% since 2013.
➢ Net income has been slightly move volatile, however, as Amazon has been investing in its
fulfillment operations, digital content, technology infrastructure, and other initiatives.
➢ After a 27% jump in revenue in 2016, the company reported a 31% increase in 2017 to about
$178 billion.
➢ All three segments grew that year, with North America adding $25 billion in new revenue
from increased unit sales.
➢ AWS continues to be the fastest-growing segment with a growth rate of 43%
➢ Amazon posted record net income for the second consecutive year with profit of $3 billion, up
from $2.3 billion the prior year.
➢ Cash at the end of 2017 was about $20.5 billion, an increase of $1.2 billion from the prior
year.
➢ Cash from operations contributed $18.4 billion, while investing activities used nearly $28
billion, mainly for property and equipment, including internal-use software and website
development, and acquisitions.
➢ Financing activities added about $10 billion as Amazon recognized proceeds from long-term
debt of more than $16 billion.

SWOT

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Strategy
➢ Amazon.com's strategy seems simply to be more more industries, more products, more services,
more (and faster) delivery options that lead to more customers, more revenue, and more profit.

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 ➢ Perhaps most important is more information, Amazon uses artificial intelligence throughout of
its systems to collect data on how the systems are used and how they can be improved.
➢ The information is also used to improve the customer experience.
➢ Machine learning drives the company's algorithms for:
● Demand forecasting
● Product search ranking
● Product and deals recommendations
● Merchandising placements
● Fraud detection
● Translations and more
➢ Visible applications are autonomous drone
delivery, the Alexa digital assistant, and AWS, as Amazon also wants to make it easier to
consumers to buy products from it.
➢ Amazon’s $99-a-year Prime service provides free two-day delivery as well as next day delivery
when products are stocked in a nearby fulfillment center.
➢ Owners of the Echo products can order products through Alexa. To get shipment to customers
faster, Amazon has been on a fulfillment center building binge. In its 2017 fiscal year, the
company added 26 warehouses.
➢ Amazon also offers same-day delivery for some products in some cities for a price.
➢ Amazon, as well, offers other consumer products such as its Fire TV devices, Kindle e-book
readers, Audible audiobooks, and more that tie closely into its ecosystem.
➢ Lastly, the company is making moves into the healthcare industry. In 2018 it announced plans
for a health care alliance (details are sparse) with Berkshire Hathaway and JPMorgan Chase.
➢ Amazon is also bulking up its medical supplies inventory as it looks to better serve hospitals
and other medical facilities through its business-to-business offering.
(Amazon’s
Retail Expansion
Strategy)

Operations
➢ Amazon.com organizes reporting of its operations into three segments:

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 ● North America (about 60% of revenue)
● International (about 30% of revenue)
● Amazon Web Services (AWS, about 10% of revenue)
➢ Its North America segment includes retail sales and subscriptions sold via North American-
focused websites.
➢ While the International segment includes the operations of internationally-focused websites
such as Amazon sites serving the UK, Brazil, Japan, and other countries.
➢ AWS includes global revenue from its cloud, storage, database, and other services.
➢ Stepping back from the geographic reporting, online sales, including products sold on behalf
of third-parties, account for about 80% of Amazon's total revenue.
➢ The company's retail subscription services contributes about 5% of revenue and consists of
the annual and monthly fees associated with Amazon Prime membership. As well as
audiobook, e-book, digital video, digital music, and other subscription services.

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Sales and Marketing
➢ Amazon.com serves consumers through its online and physical stores.
➢ Its AWS segment targets businesses of all sizes, government agencies, schools, and other
entities.
➢ About 31 % of amazon's annual sales comes from the third party sales on it.
➢ Amazon marketing comes down to three core elements:
● The Product: The product side of marketing deals with conveying the superiority of
the product.
● Paid Marketing Strategies: Paid strategies like headline search, video ads,
sponsored products and other display ads make for an essential part of time-bound
Amazon marketing campaigns.
● Organic Marketing Strategies: These include optimising on and off page factors to
improve sales in a completely organic way.

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 ➢ Conclusion
Amazon has its task cut out as far as its future strategies are concerned and this SWOT Analysis
can provide a guide and a roadmap that the company can implement going forward. The key
take away from this SWOT Analysis is that Amazon has to focus on profitability and not
volumes alone if it has to be competitive in the future where volumes and market leadership are
not alone to add value to its stock.

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