Amazon.

com INC
Presented to: Mr. Zaffar Manan

Amazon.com
Earths Biggest Book Store CEO and Founder Jeff Bezos Internet based companies (Yahoo, Google) Named After the mightiest river in the world Fast Becoming worlds Biggest anything Store

Internal Factors

Strengths
1. 2. 3. 4. Large customer database. Worlds Biggest Book Store. Efficient Web Browsing. Amazon has proven themselves to be the most successful retailer online. Enables customers to compare prices across different products being sold by amazon. Product Offering is easily understandable. Customized home pages for website Members. Effective promotions and advertisements. Expansion has propelled Amazon.com in innumerable directions.

5.
6. 7. 8. 9.

Weaknesses
1. Lack of business skills in all products being sold. 2. Purchasing items from distributors rather than manufacturers. 3. A huge need of adding values to the online shopping experience (aesthetics needs). 4. More browsers than buyers. 5. Fear of competition is high as there are low barriers to market entry.

External Factors

Opportunities
1. 2. 3. 4. 5. Market size is growing. More things can be easily sold on the internet. More people are willing to buy online. Number of women internet users are growing. Increasing availability of other access channels is providing more opportunities for customers to shop online. Increase in acceptance of E-Commerce. Growth in consumer to consumer auctions.

6. 7.

Threats
1. 2. 3. 4. 5. 6. 7. High competition from direct and indirect sources. New entry barriers in the industry. High Taxation possibilities Customer might shop at partner's website for the next purchase after the first shopping at Amazon. Threat that retailers will draw back the partnership at the end of the alliance agreement. Some retailers may get jealous if Amazon promotes one company more than another. Customers still prefer try-and-buy shopping habits for clothing.

TWOS Strategy

STRENGTHS O P P O R T U N I T Y T H R E A T
WO strategies

WEAKNESS

SO strategies

ST strategies

WT strategies

Internal Factor Evaluation Matrix

IFE Matrix

IFE Strengths
INTERNAL FACTORS Strengths
1
Large customer database.

Weighted
.10

Rated
4

TWS
.40

2
3 4

Worlds Biggest Book Store

Efficient Web Browsing Amazon has proven themselves to be the most successful retailer online

.10
.05 .05

4
4 3

.40
.20 .15

5
6 7

Enables customers to compare prices across different products being sold by Amazon
Product Offering is easily understandable. Customized home pages for website Members.

.05
.05 .05

4
3 3

.20
.15 .15

8
9

Effective promotions and advertisements.

Expansion has propelled Amazon.com in innumerable directions.

.05
.05

4
3

.20
.15

.55

2.00

IFE Weakness
INTERNAL FACTORS Weighted Rated TWS

Weakness
1 2 3 4 5
Lack of business skills in all products being sold Purchasing items from distributors rather than manufacturers A huge need of adding values to the online shopping experience (aesthetics needs). More browsers than buyers Fear of competition is high as there are low barriers to market entry

.05 .05 .10 .05 .05

2 1 2 2 1

.10 .05 .20 .10 .20

.45 TOTAL (ST + WK) 1.00

.65 2.65

External Factor Evaluation Matrix

EFE Matrix

EFE Strengths
EXTERNAL FACTORS Weighted
.10 .15 .05 .05 .05

Rated

TWS
.40 .40 .20 .15 .20

Opportunities
1 2 3 4 5
Market size is growing. More things can be easily sold on the internet More people are willing to buy online Number of women internet users are growing Increasing availability of other access channels is providing more opportunities for customers to shop online Increase in acceptance of E-Commerce Growth in consumer to consumer auctions

6 7

.05 .05

.15 .15

.55

EFE Weakness
EXTERNAL FACTORS Threats
1
2 3 4 5
High competition from direct and indirect sources New entry barriers in the industry High Taxation possibilities Customer might shop at partner's website for the next purchase after the first shopping at Amazon Threat that retailers will draw back the partnership at the end of the alliance agreement

Weighted
.05
.05 .10 .05 .20

Rated
2
1 2 2 2

TWS
.10
.05 .20 .10 .40

6
7

Some retailers may get jealous if Amazon promotes one company more than another
Customers still prefer try-and-buy shopping habits for clothing

.45 TOTAL (ST + WK) 1.00

.65 2.65

Strategic position and Action Evaluation Matrix

SPACE Matrix

SPACE MATRIX:
FINANCIAL STRENGTHS 5 6 6

5
4 5 4 Total Average 35 5

SPACE MATRIX:

COMPETITIVE ANALYSIS

RATES -1

-5
-4 -1 -1 -2 Total Average -14 -2.33

SPACE MATRIX:
ENVIRONMENTAL STABILITY RATES -4 -4 -3 -3 -2 Total Average - 16 -3.20

SPACE MATRIX:
INDUSTRY STRENGTH RATES 4 5 4 4 2 Total 19

Average

3.80

SPACE MATRIX: X-Axis :

IS + (-CA) = 3.8 + (-2.33) = 1.47

Y-Axis :
FS + (-ES) = 5.0 + (-3.20) = 1.80

SPACE MATRIX
FS

Aggressive
CA IS

ES

SPACE Matrix:
STRATEGIES TO BE PURSUED Intensive Strategies Integrative Strategies Conglomerate Diversification

Concentric Diversification Horizontal Diversification Combination

Amazon Growth
Fiscal Year-End December

2004 Sales (mil.) 1-Year Sales Growth 2004 Net Income (mil.) 1-Year Net Income Growth

$6,921.1 31.5% $588.5 1,567.1%

2004 Employees
1-Year Employee Growth

9,000
15.4%

Source : www.iwishiknew.com

Boston Consulting Group Matrix

BCG Matrix

BCG Matrix
Relative Market Share High Medium 0.5 Low 0.0

1.0
High +20
Star *

Question Mark ?

Growth Rate

Medium 0

Cash Cows Dogs

Low -20

Grand Strategy Matrix

Grand Strategy Matrix

Rapid Market Growth Quadrant II Quadrant I

Weak Competitive Position

Strong Competitive Position

Quadrant III Slow Market Growth

Quadrant IV

Strategies From Grand Strategy Matrix

Market Development Market Penetration Product Development Forward Integration Backward Integration Horizontal Integration Concentric Diversification

IE Matrix

IE MATRIX:

DIVISIONS
Amazon.com

IFE
2.65

EFE

Others

1.8

2.2

IE - Matrix
IFE SCORES 4.0 STRONG 3.0 AVERAGE 2.0 WEAK 1.0

HIGH 3.0 EFE SCORES MEDIUM 2.0 LOW 1.0

Build & Grow

Quantitative Strategic Planning Matrix

CP Matrix