ASSIGNMENT TOPIC:-

ASSIGNMENT OUTLINE:-

Amazon.com Brief Introduction

• '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), (CFO) Products Amazon.com A9.com Alexa IMDb Kindle .com 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. 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. • [email protected], 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