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amazon.

com
CO M PA N Y R E P O RT
H A M I D A L I Y E V, I NA R A M I R Z A- Z A DA, JAV I D A L I Y E V

Company Overview
Amazon.com Inc. is an American based multinational electronic
commerce company founded in 1994 by Jeff Bezos.
Headquarters: Seattle, United States
Sales: 88.988 bln $
Employees: 154 100
Main business:
-Online retail (E-commerce)
-Internet Services (Web hosting, Content distribution)
-Kindle Ecosystem
Operation markets:
- North America
- International: UK, Germany, France, China, Japan, Italy, Spain, Brazil, Australia, India, Mexico

Performance in the market


Market structure:

Oligopolistic (e-commerce, content distribution, innovative devices)


Monopolistic (Web hosting)

Market change:
40%

Amazon market share US e-commerce


37%

35%

33%

30%

29%

25%

25%
21%

20%
16%

15%
10%

10%

12%

5%
0%
2007

2008

2009

2010

2011

2012

2013 2014

2015

2016

Competition & international markets


Sales growth

Main competitors:

2011

2012

2013

Overall
Sales
growth

21%

27%

41%

North
America
sales
growth

28%

30%

43%

Internationa
14%
23%
43%
Wal-Mart, Best Buy, Toy-R-US,
E-bay, Alibaba
Group, Shopify,
Bigcommerce,
Overstock,
l sales
Google,
growth

Blue Nile, Costco, Macys, Nordstorm, Williams Sonoma, Urban Outfitters, Under
Armour, Asos, MercadoLibre, Rakuten, Belle, Intime, Sun Art

Amazons main strengths


Pioneer of the market
Huge number of customers (270 mln/Statista.com)
Knows preferences and buying patterns of target groups
Technology
Customer relations management
Strong brand image
Extensive number of low priced products
Effective logistics and distribution systems
High customer loyalty

Comparison with competitors products

growth)

($2.163 billion revenue in 2014- 17.8%

VS

(Apples 18,063 mln $ of sales, VS

VS
Amazons 22,505mln)

$299)

($95 annual membership VS Amazons

VS

VS
VS

( both are free)


(1.4 million customers in China)

Customers loyalty
Highest Customer Satisfaction Index in US and UK (88; 86)
Amazon was the first commercial site to use collaborative filtering, 1-click ordering,
shopping cart, purchase circles, friends and favorites, book review, hard-tofind books and recommendation center.

Amazons new products


Amazons Echo is $199, or $149 for Prime members
MayDay button - average response time is 9.75 seconds, and 75% of questions from
Kindle Fire customers come in through Mayday
FirePhone initially 449$, now 189$
Amazon Cloud Drive / 11,99$ photo storage, 59,99$ all files
Amazon Dash button

Market entry and cost advantages


High entry barriers, the market consists of few very large businesses with high
customer loyalty
Cost advantages:
no physical stores; no sales taxes
has wide and seamless distribution network
automatized fulfilment Kiva robots save 50% of time and human resources
well-known brand

Weaknesses
Amazons outbound shipping costs caused them $8, 71 billion in 2014

New unsuccessful products damage the reputation of Amazon and cause high losses.
For example, Fire phone resulted in writing off of $ 170 mln
technical problems may also cause them high losses - , in 2012 Amazon website went
down for 49 minutes what caused them 5.7 mln of sales losses; load slowdown of just
one second could cost it $1.6 billion in sales each year.
Amazons high expansion leads the company to loss of control and poor quality of
service
Switching costs within the industry are very low, so the risk of losing a customer are
very high

Price Discrimination
Second degree price discrimination.

AMAZON offers prime membership program. Amazon Mom, Amazon Student, Amazon Fresh
Amazon Prime, an annual membership program that includes unlimited free shipping on millions of
items, access to unlimited instant streaming of thousands of movies and TV episodes, and access to
hundreds of thousands of books to borrow and read for free on a Kindle device.

Stock price evolution


Stock price evolution
450
400
350
300
250
200
150
100
50
0
10/28/1995

7/24/1998

4/19/2001

1/14/2004

10/10/2006

7/6/2009

4/1/2012

12/27/2014

9/22/2017

Opportunities & threats


Opportunities
Collaborations with public sector and wholesalers
Joint ventures with store group like Toys-R-Us, NBA, Marks & Spencer, Target
Increases in sales
Threats
Brand competition (e.g. Kindle vs. Ipad)
Poor publicity
Foreign exchange fluctuations
Cultural diversity
Security issues

References
World Payments Report 2014/ Capgemini &RBS
Amazon Inc. 10-K Annual report 2014
Apple Inc. 10-K Annual report 2014
Ebay Inc. Annual Report for the fiscal year ended December 31, 2014
Critical success factors for businessto-Consumer E-business: Lessons from
Amazon and Dell/ Le Kha
www.statista.com
http://www.wired.com/2015/03/alibaba-us-cloud/

THANK YOU!