Amazon.com Inc. Tufail Rahman |[email protected]
com | E-Business | 26/12/2017 Table ofcontent Contents Introduction. 2 The beginning. 3 Products and services 5 Revenue Model 7 Target Market 9 Sector Overview.. 10 Amazon Website.
11 Conclusion. 12 Bibliography. 13 Introduction Name Amazon.com, Inc Headquarter Mountain View, California, United States Founder Jeff Bezos Date founded July 5, 1994 Active Since July 1994 ( 23 years ) Revenue $135.98 Billion ( 2016 ) Employees 541.900 ( 2017 ) CEO Jeff Bezos ( Since 1996 ) In late 1990s, with the publicrelease internet it was certain that the way of business know for the time wasabout to change.
At the time electronic ecommerce was still at its first stagebut it did not discourage big company to invest on it. Company like E-bay,AltaVista, HotBot, Lycos, Yahoo! and many more decided to migrate to this newway of business and among those was Amazon.The history behind electronic commercewas an interesting. Since the beginning in 1990s electronic commerce grewrapidly until 2000, when many company has seen to struggle. The phenomenon wasdescribed by popular media as “dot-com boom”.
Between 2000 and 2003, many haveseen the end of their industries. But in the beginning of 2003, electroniccommerce began to show sign of a new life. And the companies that had survivedwere able to see increase of sales and also started to make profit. Amazon.comInc was along those companies who had survived the “dot-com-boom”.Inthis paper I will discuss about Amazon strategy, product and services thatbrought the company to become one of the most successful electronic business inthe entire world. The beginning Amazon wasfounded by Jeff Bezos, in 1994 in Seattle, Washington USA.
Bezos initially registeredhis company as Cadabra Inc. but often people misled it with the word “cadaver”so Bezos decided to name it differently. In September 1994 Bezos purchased thedomain Rentless.com and considered to name his online store Relentless, butfriends told him the name sounded a bit sinister, so Bezos began to look for aword that he can use to name his company.
Looking through the dictionary heselected the word amazon to name his company as he found “exotic anddifferent”. At the beginning Bezos realizes that an online store that sellseverything would not be practical so he decided to write 20 possible productthat he might sell, including computer software, office supplies and music. Theoption that sought best for first product was books. On November Bezosregistered the domain amazon.com.The first productsold by Bezos in his company was FluidConcepts & Creative Analogies: Computer Models of the FundamentalMechanisms of Thought. At the time Amazon had not anyone assigned to packthe books so Bezos would take order during the day and pack the book during thenight with the help of some of his friends and his wife and dispatch them thevery next morning at the post office.
After beingfeatured on the home page of Yahoo!, the company started to swamp with ordersand within the first month it would have sold books in 45 countries. In late1995 Bezos receive $1 Million in investment to expand its company in term tokeep up with the high volume of order through server upgrade, hiring new staffsand improving the infrastructures. Thanks to the success of the sales of thebooks Bezos decided to amplify the catalog including product such as DVD.Between 1998 and 2000 Amazon acquired IMDb (Internet Movie Database), Telebookand Bookpages. This strategic acquisition gave access to Amazon the customerbased in United Kingdom and in Germany. During this time the company expandedthe product line including toys and electronics. Surprisingly Bezos company didnot make him any profit until late 2001. Bezos stated that he emphasized thecustomer service over profit.
At the same time Amazon beganto struggle as many companies under Amazon went down and Amazon stock pricedropped from $107 to $7. The keep the cost one thousand employees were laid offand one facility was shut down. Luckily in 2003 the company began recover andat the same time they expanded the product line including jewelers, softwaredevelopment center, Amazon Prime. Since then Bezos company has acquired averity of companies and began to operate in different sectors. Figure 1. Amazon stock price between 1997 and 2009 Products and servicesSince2003 Amazon started to build its empire acquiring company and investing itsasset to improve its product and services. Today amazon is a platform thatoffers a complete solution for its customer and the main are the following: AmazonPrime is a paid subscription service introduced in2005. It was first launched in the USA with the annual cost of £79 dollars or£7.
99 monthly, then followed by United Kingdom, Germany, Japan, Canada andother countries. It offers free delivery in 1-2 working days as well asdiscounted products. Amazon Prime include other amazon paid subscription soservice such as Amazon Video, Amazon Music are included.
AmazonVideo is an online video streaming service under premium subscription offersdigital movie and TV shoes. Prime Video features TV shows and movies. Itsoffers more than 15000 digital content and its main competitor is Netflix. AmazonMusic is an online music streaming platform lunched in 2007.
It offers over 30million songs in digital format from more than 180.000 artists and over 20.000labels including EMI music and Universal Music Group. AmazonFresh is a service introduced buy amazon in 2007 in the USA and in 2016 in theUK. It offers fresh grocery with same day delivery or early next day morningdelivery depending on the post code and area. It is an additional service toAmazon Prime and it cost annually £14.98 monthly. AmazonKindle is physical device developed by Amazon.
It is a small one-hand devicelaunched in 2012 with and it is used to read e-books. AmazonEcho is the latest product introduced by Amazon in 2015. Echo is a brand ofsmart speakers that mounts the Fire OS the personal assistant on board. Echo iscapable of voice interaction, play music, make to-do list, setting alarms andmany other smart function.Theseare the few most important services and product that Amazon offers to itcustomer.
Revenue Model Thecompany often touted as the largest online retail shop in the world. Itsoperates under a business model with many moving parts. A great percentage ofproduct are sold by Amazon directly, but it also offers other retailers tosells product to buyers. Product sold indirectly by Amazon by other retailerare less common and sometime with a higher purchase price. This createsrelationship between Amazon and businesses of any size and type. The companydoes not assess any fee for its retailers however is good to precise that itdoes retain a portion of the sale as a commission.
Therefore, it is possible toassume that the biggest online retail shop revenue is based entirely e-commercemodel however it uses more than one model revenue. As it uses: Figure 2. The company main revenue is based on sales of product directly to its customers from its online platform. The following revenue model the customers to choose the product and purchase it from one single platform. As the company offers other retailers to use its platform to sell product its retain a portion of the sale as a commission.
In this type of revenue model, other retailers advertise and sell their products and services through Amazon paying a commission. Figure 3. Figure 4. The company has growth to a size to become the third force in advertising only after Google and Facebook. Many retailers use ads on Amazon platform along aside with the products this create a strong relationship between Amazon and its partnerships. Researches shows that the company made $945 million in advertising in 2016. Figure 5.
Another model adopted by the company is the subscription model. An example is Amazon Prime which offers special content / access to the final consumer such as free 2 working days delivery, free access to the following services Amazon Book and Amazon Music. Therevenue models are perfectly adopted as the company has more than 80 million customers(2016) registered with Amazon prime and delivered over 2 billion productsworldwide ( 2012 ) with over based on the statistic of the website Statista. The number is predicted togrow over the following year. This demonstrate the result of a successfulstrategy taken over the year by Bezos company. Target Market Figure 6.
Average income member income Thecompany target is certain that aims to a wide audience who have got a littleexperience in the use of technology and often do not have time or prefershopping online rather that physical stores. However recent survey shows thatAmazon audience are younger and richer than its competitor such as Walmart. Theaverage for Amazon customer is 36.5 years versus 42.5 years for Walmart. Allthis is possible thanks to its strategy taken over the years.
Thispositioned the company as a Glocal or better known as Go global act locale-commerce, where is possible to buy anything and have it deliver in any remotearea. Sector Overview Since1990 the electronic commerce has changed way of business is transacted, whetherin retail or business to business (B2B), locally or globally. Prior the publicrelease of internet the success was entirely based on the location. However,this is not the case anymore, as internet is a global marketplace. Electroniccommerce is now became a fundamental part of economy in country.
According tothe U.S. commerce department, the country’s online sale during 2011 was roughly$194 billion and by 2013 the figure has increased to $262 billion with anincrement of 13.4%.
The sector is very competitive but dominated by Amazon,E-bay, Wal-Mart Stores, John Lewis and Costco Wholesale Corporation, Tesco PLC,Kroger Company and Walgreens Boots Alliance, Inc. Although all the companyearly cited operate on the internet, they all operate differently offeringdifferent product, targeting different audience and using different strategy. Thecompany biggest competitors are E-bay and Alibaba however Amazon leads thismarket by having a more effective, professional and easy interaction with itsclients. Furthermore, the company has made a brand personality as is fast,friendly and innovative. Figure 7.Stats of E-commerce ( in million ) between 2011and 2016Amazon Website Thekey factor of a business is certainly its website and Amazon has perfectlyimplemented all the feature in its platform. Below is described how the designand function are implemented to provide excellent experience to the finalcustomer.
Figure 8.Figure 8. The home page includesthe header, the navigation bar, the content more content scrolling down untilthe footer at the end. The header includes the amazon logo, the search bar andthe navigation bar. In the main content it is possible to observe how thebanner is integrated to capture the attention of the customers. Continuingscrolling product based on shopping trends are shown. Figure 9.
Figure9.This is a typical page of a product before the item is added to the chart. Inthe following page is possible to notice in the center left the review of theproduct by customer who already bought the item, therefore the customer is ableto make an idea of the product before buying it. Figure 10. Figure10.
The following page is a payment page where the customer finalizes theorder, its notable at the top-left the shipping address, aside the billing information,at the left-bottom the product aside with the shipping speed and at the veryright the order summary.Theplatform is simple, intuitive and user friendly from the choosing the productuntil the very end with the payment. ConclusionOncestarted selling books, has now strategically positioned itself to grab theemerging trend, has innovated its technology and usage of e-commerce and itsservices bringing the company ahead its competitor. The company diversificationstrategy does not have a clear direction. Its provide a variety of products,from book to the less common item. The company’s service is one of the key thatled the company ahead of any other electronic commerce company. Moreover, thefounder / CEO stated thathe emphasized the customer service over profit.
The company is looking ahead andseeking new way of delivering its product using drones and cutting of the cost overthe shipment. The future for Amazon is certainly bright if the company keeps innovatingand offering excellent products and service. Bibliography 2007Gary Schneider book – E-Business,International Edition 11th edition.
2016Web Page – First product sold: https://www.quora.com/What-was-the-first-product-sold-on-Amazon 2017Web Page – Amazon acquisitions: https://en.wikipedia.
org/wiki/List_of_mergers_and_acquisitions_by_Amazon#19982009Web Page – Amazon stock price: http://www.businessinsider.com/chart-of-the-day-amazons-stock-price-2009-11?IR=T2017Web page – Amazon products: https://aws.amazon.
com/products/2017Web page – Amazon information: https://en.wikipedia.org/wiki/Amazon_(company) AcademicDeclaration Icertify that I have accessed and understood the Blackboard Course BBK COIY042H52017: Avoiding Plagiarism. By submitting this assignment, I confirm that thework is my own, with the work of others fully acknowledged. All quotations fromthe published or unpublished works of other persons are duly acknowledged.Where there is no such acknowledgement the work is my own. The work presentedhere has not been presented, in whole or in part, for credit in any module inthis or any other school. Permission is granted to submit the work to anon-line database.
Itis understood that this work may be compared with other works in the databasein order to detect plagiarism and that work submitted to the database willremain in the database. TufailRahman