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Amazon

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Himanshu Mehta

The document outlines an analysis of Amazon.com, including its history, current business segments, mission statements, internal and external audits identifying strengths, weaknesses, opportunities and threats, and competitive profiles. Goals for the next 3-4 years include launching an online gourmet food store, increasing marketing expenses to boost brand recognition, and promoting their new A9 search engine to compete with Yahoo and Google.

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Presented by: Naimesh bhatt Mukti shah Himanshu mehta
Outline  History  Where we Stand Today  Vision Statement  Mission Statements – Actual – Proposed  Business Segments  External Audit – Opportunities – Threats  EFE  CPM  Internal Audit – Strengths – Weaknesses  IFE  Matrix Analysis – SWOT Matrix – Space Matrix – Grand Strategy Matrix – BCG Matrix – IE Matrix  Matrix and SWOT Summary  Financial Ratios  QSPM  Strategy Recommendations  EPS/EBIT Analysis  Future Goals/Objectives  Amazon. COM in the News
•Amazon was incorporated in the state of Washington on July 5, 1994. •Before the company was renamed Amazon it was called Cadabra, Inc. •The company was developed by Jeff Bezos and two associates in a garage converted into a shop. •The company began selling to the public in July 1995. •On May 15, 1997 the company went public with an opening price of $18 per share. •In 1999, the company bought 46% of drugstore.com and launched it’s own auction site to challenge e-bay. •In 2002, Virgin Entertainment Group and Amazon.com relaunched www.virginmega.com as a co-branded Web site. •Also in 2002, Amazon.com launched Amazon.ca, bringing Canadians the selection, convenience, and the value of the Amazon shopping experience.
A little about us…  Headquarters is located in Seattle, Washington.  Amazon’s common stock is publicly traded on the NASDAQ under AMZN.  Our web-site address is amazon.com
Where we stand today.. Amazon.com, Inc. is an internet-based company that offers books, music, videos, DVDs, electronics, software, toys, video games, electronic greeting cards, home improvements, online auctions, and a virtual mall called z-shops. Amazon has sites in France, Japan, Germany and the United Kingdom. Domestically, Amazon has experienced tremendous growth since its inception. However, that growth has not come without a cost. As the world economy worsens, Amazon faces pressure from stockholders as well as the entire financial community to realize a profit. Amazon has created a platform and customer base that many companies envy, but can they stay in business long enough to reach profitability.
Price and Volume Information from Amazon.com Recent Price $34.60 Trade Date 04/11/05 52-Week High $54.70 52-Week Low $32.82 Beta (5-Year) 2.37
Mission Statement Actual The company motto: “Work Hard, Have Fun, and Make History.” The company’s six core values: customer obsession, ownership, bias for action, frugality, high hiring bar, and innovation.
Business Segments •The North America segment consists of amounts earned from retail sales through www.amazon.com and www.amazon.ca, Syndicated Stores and mail-order catalogs, Merchant.com, marketing, and promotional agreements. This segment has seen a growth in net sales from $2.382 billion in 2000 to $2.74 billion in 2002 •The International Segment consists of amounts earned from retail sales through www.amazon.co.uk, www.amazon.de, www.amazon.fr, and www.amazon.co.jp, Syndicated Stores, and international focused marketing and promotional agreements. This segment has seen a growth in net sales from $381million in 2000 to $1.17billion in 2002
External Audit Threats • 1. Taxes imposed for EU customers • 2. Unemployment level highest sine 1994 • 3. Currency fluctuation • 4. Failure to permanently ban Internet taxes • 5. Aggressive competition • 6. Identity theft • 7. Terrorist attack, war • 8. State of the economy, high inflation • 9. Volatile stock market • 10. High interest rate • 11. Ease of entry into market Opportunities • 1. Pressure to permanently ban the Internet Tax • 2. State of the economy is improving • 3. Customer spending increased • 4. Currency fluctuation (weak dollar) • 5. Increased number of Internet users in the US • 6. Broadband access technology • 7. Increased number of Internet users worldwide • 8. Online sales predicted to increase • 9. Low interest rate • 10. One European currency - Euro
Competitive Profile Matrix Amazon. COM Barnes & Nobles eBay Critical Success Factors Weight Rating Weighted Score Rating Weighted Score Rating Weighted Score Market Share Price Financial Position Product Quality Consumer Loyalty Global expansion Advertising Software technology Management e-commerce expertise 0.05 0.10 0.15 0.10 0.10 0.15 0.15 0.05 0.10 0.05 4 4 2 3 4 4 4 4 4 4 0.20 0.40 0.30 0.30 0.40 0.60 0.60 0.20 0.40 0.20 3 3 4 3 3 3 3 3 4 3 0.15 0.30 0.60 0.30 0.30 0.45 0.45 0.15 0.40 0.15 4 4 3 3 4 4 4 3 4 4 0.20 0.40 0.45 0.30 0.40 0.60 0.60 0.15 0.40 0.20 Total 1.00 3.60 3.25 3.70
Weaknesses 1. Accumulated deficit of $3 billion 2. Operating losses 3. Interest payments on debt issued 4. High inventory risk - seasonality 5. Small number of vendors (suppliers) 6. Breach of customer confidential information InternalAudit Strengths 1. Strong management team 2. Strong customer service support 3. Up-to-date technology and software 4. High brand name recognition 5. Corporate culture 6. Distribution centers 7. Strategic alliances 8. Increased revenue from international segment 9. High inventory turnover
Goals and Objectives For the next 3-4 years, Amazon is hoping to have started their online gourmet food and beverage store. Also, Amazon want to increase their marketing expenses from 2% of net sales to 3%. This will give them more advertising and brand recognition. Amazon has recently launched their search engine called A9. Now they need to spend the next three year trying to get the name known and get in the competition with yahoo and google.

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Amazon

  • 1. Presented by: Naimesh bhatt Mukti shah Himanshu mehta
  • 2. Outline  History  Where we Stand Today  Vision Statement  Mission Statements – Actual – Proposed  Business Segments  External Audit – Opportunities – Threats  EFE  CPM  Internal Audit – Strengths – Weaknesses  IFE  Matrix Analysis – SWOT Matrix – Space Matrix – Grand Strategy Matrix – BCG Matrix – IE Matrix  Matrix and SWOT Summary  Financial Ratios  QSPM  Strategy Recommendations  EPS/EBIT Analysis  Future Goals/Objectives  Amazon. COM in the News
  • 3. •Amazon was incorporated in the state of Washington on July 5, 1994. •Before the company was renamed Amazon it was called Cadabra, Inc. •The company was developed by Jeff Bezos and two associates in a garage converted into a shop. •The company began selling to the public in July 1995. •On May 15, 1997 the company went public with an opening price of $18 per share. •In 1999, the company bought 46% of drugstore.com and launched it’s own auction site to challenge e-bay. •In 2002, Virgin Entertainment Group and Amazon.com relaunched www.virginmega.com as a co-branded Web site. •Also in 2002, Amazon.com launched Amazon.ca, bringing Canadians the selection, convenience, and the value of the Amazon shopping experience.
  • 4. A little about us…  Headquarters is located in Seattle, Washington.  Amazon’s common stock is publicly traded on the NASDAQ under AMZN.  Our web-site address is amazon.com
  • 5. Where we stand today.. Amazon.com, Inc. is an internet-based company that offers books, music, videos, DVDs, electronics, software, toys, video games, electronic greeting cards, home improvements, online auctions, and a virtual mall called z-shops. Amazon has sites in France, Japan, Germany and the United Kingdom. Domestically, Amazon has experienced tremendous growth since its inception. However, that growth has not come without a cost. As the world economy worsens, Amazon faces pressure from stockholders as well as the entire financial community to realize a profit. Amazon has created a platform and customer base that many companies envy, but can they stay in business long enough to reach profitability.
  • 6. Price and Volume Information from Amazon.com Recent Price $34.60 Trade Date 04/11/05 52-Week High $54.70 52-Week Low $32.82 Beta (5-Year) 2.37
  • 7. Mission Statement Actual The company motto: “Work Hard, Have Fun, and Make History.” The company’s six core values: customer obsession, ownership, bias for action, frugality, high hiring bar, and innovation.
  • 8. Business Segments •The North America segment consists of amounts earned from retail sales through www.amazon.com and www.amazon.ca, Syndicated Stores and mail-order catalogs, Merchant.com, marketing, and promotional agreements. This segment has seen a growth in net sales from $2.382 billion in 2000 to $2.74 billion in 2002 •The International Segment consists of amounts earned from retail sales through www.amazon.co.uk, www.amazon.de, www.amazon.fr, and www.amazon.co.jp, Syndicated Stores, and international focused marketing and promotional agreements. This segment has seen a growth in net sales from $381million in 2000 to $1.17billion in 2002
  • 9. External Audit Threats • 1. Taxes imposed for EU customers • 2. Unemployment level highest sine 1994 • 3. Currency fluctuation • 4. Failure to permanently ban Internet taxes • 5. Aggressive competition • 6. Identity theft • 7. Terrorist attack, war • 8. State of the economy, high inflation • 9. Volatile stock market • 10. High interest rate • 11. Ease of entry into market Opportunities • 1. Pressure to permanently ban the Internet Tax • 2. State of the economy is improving • 3. Customer spending increased • 4. Currency fluctuation (weak dollar) • 5. Increased number of Internet users in the US • 6. Broadband access technology • 7. Increased number of Internet users worldwide • 8. Online sales predicted to increase • 9. Low interest rate • 10. One European currency - Euro
  • 10. Competitive Profile Matrix Amazon. COM Barnes & Nobles eBay Critical Success Factors Weight Rating Weighted Score Rating Weighted Score Rating Weighted Score Market Share Price Financial Position Product Quality Consumer Loyalty Global expansion Advertising Software technology Management e-commerce expertise 0.05 0.10 0.15 0.10 0.10 0.15 0.15 0.05 0.10 0.05 4 4 2 3 4 4 4 4 4 4 0.20 0.40 0.30 0.30 0.40 0.60 0.60 0.20 0.40 0.20 3 3 4 3 3 3 3 3 4 3 0.15 0.30 0.60 0.30 0.30 0.45 0.45 0.15 0.40 0.15 4 4 3 3 4 4 4 3 4 4 0.20 0.40 0.45 0.30 0.40 0.60 0.60 0.15 0.40 0.20 Total 1.00 3.60 3.25 3.70
  • 11. Weaknesses 1. Accumulated deficit of $3 billion 2. Operating losses 3. Interest payments on debt issued 4. High inventory risk - seasonality 5. Small number of vendors (suppliers) 6. Breach of customer confidential information InternalAudit Strengths 1. Strong management team 2. Strong customer service support 3. Up-to-date technology and software 4. High brand name recognition 5. Corporate culture 6. Distribution centers 7. Strategic alliances 8. Increased revenue from international segment 9. High inventory turnover
  • 12. Goals and Objectives For the next 3-4 years, Amazon is hoping to have started their online gourmet food and beverage store. Also, Amazon want to increase their marketing expenses from 2% of net sales to 3%. This will give them more advertising and brand recognition. Amazon has recently launched their search engine called A9. Now they need to spend the next three year trying to get the name known and get in the competition with yahoo and google.