Amazon.

com
From Start Up to 2004
Presented By:
Arun G.
Ashima Kakar
Avinash Prasad
B.Pranith Raju
Bhupinder Singh
Deepak Sharma
 History
• November 1994 CEO Jeff Bezos and two associates set up shop in
a converted garage.
• Founder and Bezos opened the virtual doors of Amazon.com's
online store in July 1995 and began selling public.
• In May 1997 Amazon.com completed its initial public offering (IPO).
• April 1998 the company acquired online bookstores in U.K. and
Germany (Bookpages and Telebuch): first international expansion
• In 1999 the company launched its own auction site
• In 2000 Amazon.com launched amazon.co.jp and amazon.fr (Japan
and France)
• In 2002 e-commerce strategic alliances were performed with Virgin
and Office Depot.
• In January 2003 announced the Free Super Saver Shipping
• September 2003 launched new Sporting Good store.
 Acquisitions/Partnerships
• Acquisitions: • Partnerships:
– Bookpages (April 1998,
Amazon.co.uk)
– Telebuch (Telebook) Inc.
(April 1998, Amazon.co.de)
– Paid $200M to acquire e-
Niche, Inc., Music Find,
Accept.com, and Alexia
Internet Company (1999)
– Introduced zShops;
Amazon.com’s online mall
(1999)
– Bought 46% of Drugstore.com
(1999)
– Bought 50% of Pets.com (1999)
– Gained a 1.7% stake in Sotheby’s
Holdings and formed a joint online
auction site (1999,
sothebys.amazon.com)
– Bought 35% of Homegrocer.com
(1999)
– Bought 49% of Gear.com (1999)
– Offered a co-branded credit card
with Nextcard (1999)
– Annouched plans to open a Target
store at www.amazon.com (2001)
– Others partnered with:
BabiesRUS, ToysRUS, and
Borders Group (2001)
Business Model Canvas

Value
Proposition
(VP)
 Three Customer Sets

Who want to
Consumers buy products
on Amazon

Who want to Who want to use

Amazon
sell products
on Amazon Sellers Developers developing
services
Effectiveness Model
Threats to Current Business Model
• Emergence of big malls
• Product cannibalization
• Emergence of m-commerce
• Technical challenges like cyber attacks, virus threats
• Emergence of social networking networks where people
share their reviews about products
Should they continue to be all
things to all people?
• Obviously YES

• Vision : From 1995 has developed from being the world’s biggest and best
online store to becoming a one stop online store where consumers can buy
anything .

• As seen in Exhibit 6 : there has been continuous increase in NET SALES

figures which has also percolated to enhanced sales in different Segments
like Books , Music , CDs , DVD’s , Electronics , Tools & Kitchens

• International Sales : which comprises of sales in countries apart from US .

• Services Sales ( ex: web services ,

 Strengths of the Brand
•They should expand their brand across all different streams and increase
it’s value.
•Extensive brand building exercises such as sponsoring worldwide social
causes which will help in earning recognition
•Increase the circumference of the services through new technologies
such as mobile commerce
New products

•Introduction of new products for the consumers like food and beverages, real
estate, arms and ammunition which cater to the needs of all and sundry
•More efficient distribution channels which provide prompt after sales
services.
•Should stress on becoming “Earth’s biggest selection center”
 The Innovations
• Since the beginning Amazon.com have stressed on new
innovations and enhanced customer experience.
• Tie ups with Yahoo! which helped in providing web guides for
almost everywhere
• Language based websites enabling to connect with people all
around the globe
• Various luxury items, kitchen ware, sports apparels, medicines, gift
shopping, pet food, personal care.
• First to start on line book retailing
• One clicked processing orders
• High discounted rates
• Availability of regional books and music
• Web services linking to other web pages of customers interest
 The Road Ahead
• Enhance their market share in South East Asia and
Latin America:

The customer base of Amazon.com is largely confined to

US and European markets with a small chunk in Asian
markets in the form of Japan and China. Amazon.com
should try and increase their presence in Asian markets
so as to capture the large customer base with an ever
increasing consumers of internet.Also they should
venture into Latin America with countries like
Brazil,Mexico and Argentina which are nearby but yet
untapped.
 Worldwide Sales Mix
Q1 ’04 – Net Sales $5,710 MM Q4 ’09– Net Sales $24,509 MM
2% 3%

22% z
45%

76% 52%

Source: www.amazon.com
WW Media (Books, Music, Movies, Video Games and Consoles, Software
and Digital Downloads)

WW Electronics & Other General Merchendise (EGM)

WW Other (Marketing and Promotional Activities, Amazon Web Services,

Amazon Enterprise Solutions, & Co-branded Credit Cards)
 International Sales
MM

• 2008 International sales

47% of WW sales, up from
45% in 2007
• Shipments to over 200
countries

Source: www.amazon.com
• And since the expansion of amazon.com business
model has already seen Recession of 2001 , now
we can fairly assume that it has learnt to balance
the Growth where it had acquired more and more
customers and then had cut cost in terms of man
power as well as cost improvement in logistics and
distribution .
• This model will definitely will pave the way in future
as well as innovation and technological
improvements are always explored and will help
Amazon in future as well
 The BCG Analysis

Books Kindle

Video &
Entertainment
 SWOT
Weakness
Strengths
•New Business Ideas
•Free Shipping Causes erosion of $
•Wide Reach and Instant Recall
•At times the last list of offerings may
•High volume of repeat customers
Become confusing for the customers
•First Movers Advantage
•Strong Logistics

Opportunities Threats
•Entering the public sector with tie up •Cyber Attacks
With British library •M Commerce
•Tie up with retail giants such as M&S • Competition with major publications
•Venturing in China with Joyo in 2004 Going online
•Copyrights and Royalty