ASSIGNMENT TOPIC:-

ASSIGNMENT OUTLINE:-

Amazon.com Brief Introduction

• Amazon's logo
• Goals & objectives
• Vision statement
• Mission statement

Company History

• The Early 1990s: Beginnings

• Going Public in 1997
• Further Expansion in 1998
• Growth Continues: 1999 and Beyond

Principal Subsidiaries
Principal Competitors
Critical Success Factors

• Better Value Added Services

• Affordable Prices
• Recommendation Center
• Topic Areas to Browse
• Alert for fresh arrivals
• Customization
• Associate program
• Other success factors

Market Threats
Conclusion
Suggestions
 Amazon.com, Inc. – An Icon in the E-Business Arena

Type Public (NASDAQ: AMZN)

S&P 500 Component
Industry Retail
Founded 1994
Founder(s) Jeffrey P. Bezos
Headquarters Seattle, Washington, U.S.
Area served Worldwide
Key people Jeffrey P. Bezos
(Chairman, CEO, & President), Tom
Szkutak
(CFO)
Products Amazon.com
A9.com
Alexa Internet
IMDb
Kindle
Audible.com
Amazon Web Services
Endless.com
A2Z Development
Alexa.com
Revenue • US$ 24.509 billion (2009)
Operating income • US$ 1.129 billion (2009)
Net income • US$ 902 million (2009)
Total assets • US$13.8 billion (FY 2009)
Total equity • US$5.26 billion (FY 2009)
Employees 31,200 (2010)

Amazon.com, Inc. – An Icon in the E-Business Arena

Amazon.com Brief Introduction:-

Amazon.com, Inc. (NASDAQ:AMZN) is an American-based multinational electronic
commerce company. Headquartered in Seattle, Washington, it is America’s largest online
retailer, with nearly three times the internet sales revenue of runner up Staples, Inc.

Amazon was founded in 1994, in the state of Washington spurred by what Bezos called
"regret minimization framework", his effort to fend off regret for not staking a claim in
the Internet gold rush.
Jeff Bezos founded Amazon.com, Inc. in 1994 and launched
it online in 1995. The company was originally named
Cadabra, Inc., but the name was changed when it was
discovered that people sometimes heard the name as
"Cadaver." The name Amazon.com was chosen because the
Amazon River is the largest river in the world, and it starts
with 'A' and therefore would shows up near the beginning of
alphabetical lists.
Jeff Bezos, the founder of Amazon.com
AMAZON started as an on-line book store but soon diversified to product lines of
VHS, DVD, music CDs and MP3s, computer software, video games, electronics, apparel,
furniture, food, toys, etc. Amazon has established separate websites in Canada, the
United Kingdom, Germany, France, China, and Japan. It also provides international
shipping to certain countries for some of its products. Amazon.com is the most successful
e-tailer in the world. Innovative technology is the backbone of the company's success.

Amazon's logo:-
Amazon's logotype is an arrow leading from A to Z,
representing customer satisfaction (as it forms a smile);
a goal was to have every product in the alphabet.

Goals & Objectives

“We seek to be 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 possible prices.”

Vision Statement

“To build a place where people can come to find and discover anything they might want
to buy online”
Amazon.com, Inc. – An Icon in the E-Business Arena

Mission Statement
While Amazon does not have a formal mission statement, the basic mission and goals of
the Company are evident in the words of Mr. Bezos, which are as follow;

“The mission of Amazon.com is to leverage technology and the expertise of our

invaluable employees to provide the best buying experience on the Internet. Our goal is
nothing short of building the world's most customer-centric Company capable of
providing our customers with the best shopping experience online today, and into the
future.”

Company History:-

Considered a pioneer in online retailing, Amazon.com, Inc. expanded during the late
1990s to offer the "Earth's Biggest Selection" of books, CDs, videos, DVDs, electronics,
toys, tools, home furnishings and house wares, apparel, and kitchen gadgets.

The Early 1990s: Beginnings

Throughout the 1990s, the popularity of the Internet and World Wide Web swept across
the world, and personal computers in most businesses and households got hooked up in
some form or another to Internet providers and Web browser software. As use of the
Internet became more prevalent in society, companies began looking to the Web as a new
avenue for commerce. Selling products over the Internet offered a variety of choices and
opportunities. One of the pioneers of e-commerce was Jeff Bezos, founder of
Amazon.com.

In 1994, Bezos left his job as vice-president of the Wall Street firm D.E. Shaw, moved to
Seattle, and began to work out a business plan for what would become Amazon.com.
After reading a report that projected annual Web growth at 2,300 percent, Bezos drew up
a list of 20 products that could be sold on the Internet. He narrowed the list to what he felt
were the five most promising: compact discs, computer hardware, computer software,
videos, and books. Bezos eventually decided that his venture would sell books over the
Web, due to the large worldwide market for literature, the low price that could be offered
for books, and the tremendous selection of titles that were available in print. He chose
Seattle as the company headquarters due to its large high-tech work force and its
proximity to a large book distribution center in Oregon. Bezos then worked to raise funds
for the company while also working with software developers to build the company's web
site. The web site debuted in July 1995 and quickly became the number one book-related
site on the Web.

In just four months of operation, Amazon.com became a very popular site on the Web,
making high marks on several Internet rankings. It generated recognition as the sixth best
site on Point Communications' "top ten" list, and was almost immediately placed on

Amazon.com, Inc. – An Icon in the E-Business Arena

Yahoo's "what's cool list" and Netscape's "what's new list." The site opened with a
searchable database of over one million titles. Customers could enter search information,
prompting the system to sift through the company database and find the desired titles.
The program then displayed information about the selection on a customer's computer
screen, and gave the customer the option to order the books with a credit card and have
the books shipped in a just a few days.

Unlike its large competitors, such as Barnes & Noble and Borders, Amazon.com carried
only about 2,000 titles in stock in its Seattle warehouse. Amazon.com simply received the
books from the other sources, and then ships them to the customer. At first, the company
operated out of Bezos' garage, until it was clear that it was going to be a success,
necessitating a move to a Seattle office, which served as the customer support, shipping,
and receiving area. It was interesting that, because of the Internet, such a small venture
could realize such a broad scope so quickly; within a month of launching the web site,
Bezos and Amazon.com had filled orders from all 50 states and 45 other countries.

Going Public in 1997

After less than two years of operation, Amazon.com became a public company in May
1997 with an initial public offering (IPO) of three million shares of common stock. With
the proceeds from the IPO, Bezos went to work on improving the already productive web
site and on bettering the company's distribution capabilities.

To help broaden the company's distribution capabilities, and to ease the strain on the
existing distribution center that came from such a high volume of orders, in September
1997 Bezos announced that Amazon.com would be opening an East Coast distribution
center in New Castle, Delaware.

When Amazon.com formed partnerships with Yahoo, Inc. and America Online, Inc. Both
companies agreed to give Amazon.com broad promotional capabilities on their sites, two
of the most visited sites on the Web. As the success continued, Amazon also struck deals
with many other popular sites, including Netscape, Geo Cities, Excite, and AltaVista.

As the company continued to grow in 1997, Bezos announced in October that

Amazon.com would be the first Internet retailer to reach the milestone of one million
customers. With customers in all 50 states and now 160 countries worldwide, what had
started in a Seattle garage was now a company with $147.8 million in yearly sales.

Further Expansion in 1998

As Amazon.com ventured into 1998, the company continued to grow. By February, the
Associates program had reached 30,000 members, who now earned up to 15 percent for

Amazon.com, Inc. – An Icon in the E-Business Arena

recommending and selling books from their web sites. Four months later, the number of
Associates had doubled to 60,000.

The company's customer database continued to grow as well, with cumulative customer
accounts reaching 2.26 million in March, an increase of 50 percent in just three months,
and of 564 percent over the previous year. In other words, it took Amazon.com 27
months to serve its first million customers and only six months to serve the second
million. This feat made Amazon.com the third largest bookseller in the United States.

Amazon.com ended the second quarter of 1998 as strong as ever. Cumulative customer
accounts broke the three million mark, and as sales figures for Amazon.com continued to
rise, and more products and titles were added, the future looked bright for this pioneer in
the Internet commerce marketplace. As Bezos told Fortune magazine in December 1996:

"By the year 2000, there could be two or three big online bookstores. We need to be one
of them."

Growth Continues: 1999 and Beyond

As such, the company's focus on growth continued. In 1999, it launched an online auction
service entitled Amazon Auctions. Bezos reached the upper echelon of the corporate
world when Time magazine honored him with its “prestigious Person of the Year”
award.

At the end of 1999, Amazon had raked in over a billion dollars in sales. It seemed as
though the profit would never cease. However, in 2001, Amazon reported a fiscal loss of
$1.4 billion, and had laid off over 200 workers in the last year. The beginning of 2001
found Amazon laying off even more workers, totaling over 1000. Instead of giving up,
Bezos had an idea: recruit other companies to sell their products online through Amazon
as well. The idea worked. Companies such as Target, Toys R Us, Old Navy, and many
others have agreed to sell their items through Amazon. Although Amazon is not directly
responsible for inventory through these companies, they do get part of the sales, creating
a profit for all involved. In 2001, sales grew to $3.12 billion, an increase of 13 percent
over the previous year. During the fourth quarter, Amazon.com reached a milestone that
many had regarded as unlikely; it secured a net profit of $5 million.

In 2002, the company launched its apparel store, which included clothing from retailers
The Gap and Lands' End. Overall, the company reported a net loss of $149 million for the
year, an improvement from the $567 million loss reported in 2001. In the fourth quarter
of 2002 however, the firm secured a quarterly net profit of $3 million--the second net
profit in its history. While securing quarterly net profits was a major turning point for the
young company, a July 2002 Business Week article warned, "After seven years and more
than $1 billion in losses, Amazon is still a work in process."

Amazon.com, Inc. – An Icon in the E-Business Arena

Indeed, the company's foray into providing the "Earth's Biggest Selection" had yet to
prove it could provide profits on a long-term basis. Nevertheless, Bezos and his Amazon
team remained confident that the firm was on the right track. With $3.9 billion in annual
sales, Amazon.com had without a doubt come a long way from its start as an online book
seller.

Principal Subsidiaries:

• Amazon Global Resources, Inc.

• Amazon.com.dedc, LLC
• Fulfillco.ksdc, Inc.
• Amazon.com.kydc, Inc.
• Amazon.com Commerce Services, Inc.
• Amazon.com Holdings, Inc.
• Amazon.com International Sales, Inc.
• Amazon.com LLC
• Amazon.com Payments, Inc.
• NV Services, Inc.
• Amazon Fulfillment Services, Inc.
• Amazon.com@Target.com, Inc.

Principal Competitors:-

• Barnes & Noble Inc.

• CD Now Inc.
• E Bay Inc.
• Onlineauction.com
• Rediff.com
• Timesindia.com
• Wal-Mart

Critical success factor:-

A 2009 survey found that Amazon was the UK's favorite music and video retailer, and
third overall retailer. Its success has partly been based on;
o Superior order fulfillment,
o Allied to a user-friendly interface built around its patented 1-Click technology and
also came up with kindle concept of having books online in a file form like pdf. A
computed file.

Amazon.com, Inc. – An Icon in the E-Business Arena

 o Using its unparalleled customer database that provides the most comprehensive
insight into consumer behavior, the company will need to continue to anticipate
and address those needs in a unique way before its competitors.

Better Value Added Services:-

Amazon.com works hard to achieve value-added differentiation through customer-

focused information services. Amazon.com's market success depends on its ability to
maintain and grow its customer base by knowing and serving its customers better than its
competitors and providing a higher level of value-added differentiation in customer
service Due to high level of customer satisfaction, repeat customers account for
approximately 60% of Amazon.com's orders.

Recommendation Center:-

For people who could not decide, Amazon.com offered a recommendation center. There
a customer could find books based on his or her mood, reading habits, or preferences.
The recommendation center also offered titles based on records of books the customer
had purchased in the past, if they were return customers to the site.

Topic Areas to Browse:-

For customers who were just looking for something to read in a general area of interest,
Amazon.com offered topic areas to browse, as well as lists of bestsellers, award winners,
and titles that were recently featured in the media.

Alert for fresh arrivals:-

Other hits with customers were the little touches, such as optional gift wrapping of
packages, and the "eye" notification service, which sent customers e-mails alerting them
when a new book in their favorite subject or by their favorite author came into stock.

Customization:-

Amazon.com's site retains customer preferences and provides automated customization

for users.

Affordable Prices:-

The company also began offering 10 to 30 percent discounts on most titles, making the
prices extremely affordable.

Amazon.com, Inc. – An Icon in the E-Business Arena

Associate program:-

Amazon.com was the success of its "Associate' program. Established in July 1996, the
program allowed individuals with their own web sites to choose books of interest and
place ads for them on their own sites, allowing visitors to purchase those books. The
customer was linked to Amazon.com, which took care of all the orders. Associates were
sent reports on their sales and made a 3 to 8 percent commission from books sold on their
sites.

Z Shops:-

Amazon charges other merchants a monthly fee to sell their wares on the Web site. Z
Shops have higher profit margins than the company's own direct sales. Merchants who
sell their products through z Shops pay Amazon a monthly fee of $39.99 and a closing
fee of 5 percent on items sold for $25 or less.

Amazon Upgrade:-

To avoid copyright violations, amazon.com does not return the computer-readable text of
the book. Instead, it returns a picture of the matching page, disables printing, and puts
limits on the number of pages in a book a single user can access. Additionally, customers
can purchase online access to some of the same books via the "Amazon Upgrade"
program.

Other success factors:-

• E-Tailing Industry
• Instant growth opportunity
• Instant wide exposure
• Stores never close
• Unique cash flow characteristics
• Distribution capabilities
• Innovative technology
• Reliability
• Strategic Alliances
• Brand Recognisation
• Economies of Scale
• Broad customer base
• The first mover advantage
• Customer loyalty

Amazon.com, Inc. – An Icon in the E-Business Arena

Market Threats:-

• No Merchandise branding
• Instable environment
• High competition
• Low margin
• Distribution problem
• Offline companies are going online
• Heavy investments Amazon must do
• Increase the expenditure in the research and development area
• Increase its word-of-mouth advertisement
• Continue expanding its product lines
• Further expansion of Amazon.com mostly to the developed countries
• Strive to offer low, competitive prices to its customers

Conclusion:-

A Concise Conclusion of the entire Amazon.com, Inc.’s fabulous impact as an E-

Business Venture and an Inspiring Success Story for all E-Business based firms around
this world.

Suggestions:-

• Although Amazon is having a good strategy in the virtual world but it is not
applying the integrated marketing approach which could have multiplied new
customers.
• Since the marketing expenses are high, Amazon.com can implement some self
liquidating promotions to grab the attention of potential customers.
• The competition from retail chains can be brought under control if Amazon
decides to buy its books from the manufacturers.
• In order to triple sales (or maybe even grow exponentially), a quick and relatively
cheap method can be by implementing a referral scheme, where each user is asked
to bring in 5 or 10 other members in exchange for discount coupons. The newly
referred members should also be given a discount on their first purchase, in order
to induce them to start buying.
• Increase customer traffic to websites
• Create awareness of products and services
• Promote repeat purchases
• Develop incremental product and service revenue opportunities
• Strengthen and broaden the Amazon.com brand name