Final Debriefing About Case N. 16 Amazon (State N. and Name of the Selected Company) Analyzed by Alfonso - Name –Navarro Miralles- Surname

Home , Amazon Go, Amazon Prime, Jeff Bezos, Prime Now, Whole Foods Market

Final debriefing about case n. 16 Amazon (state n. and name of the selected company) Analyzed by Alfonso - name –Navarro Miralles- surname

Scientific articles/papers

State at least n.1 scientific article/paper you selected to support your analysis and recommendations

N. Title Author Journal Year, Link number 1. 17/06/2017 https://www.elconfidencial.com/tecnologia/2017-06-17/amazon-whole-foods-supermercados-amazon-go_1400807/ 2. 2/06/2020 https://r.search.yahoo.com/_ylt=AwrP4o3VEdleYUMAKhxU04lQ;_ylu=X3oDMTByZmVxM3N0BGNvbG8DaXIyBHBvcwMxBHZ0aWQDBHNlYwNzYw- -/RV=2/RE=1591312982/RO=10/RU=https%3a%2f%2flahora.gt%2famazon-coloca-sus-bonos-al-interes-mas-bajo-jamas-pagado-por-una-empresa-en-ee- uu%2f/RK=2/RS=Zx5.zD_yM_46ddGLB3MWurVI_Yw- 3. 2/04/2019 https://r.search.yahoo.com/_ylt=AwrJS5g3EtleXmwAKj9U04lQ;_ylu=X3oDMTByaW11dnNvBGNvbG8DaXIyBHBvcwMxBHZ0aWQDBHNlYwNzcg-- /RV=2/RE=1591313079/RO=10/RU=https%3a%2f%2fwww.merca20.com%2famazon-lanzo-una-agresiva-estrategia-de-mercadotecnia-en-whole- foods%2f/RK=2/RS=iypqQZFlpG12X9jM7BsXb1VPVx8-

Describe the company’s strategic profile and its industry Applying the tools of analysis covered in the whole textbook, identify and evaluate the company’s strategic profile, strategic issues/problems that merit attention (and then propose, in the following section, action recommendations to resolve these issues/problems).

Jeff Bezos founded the electronic commerce company Amazon in 1995, a name chosen for his taste for the Amazon River. Their service was somewhat novel to netizens, resulting in the increase in visits fastly. Only in the first month of operation, and to Bezos' own happiness, had books been sold in all corners of the United States. Months later it reached 2,000 daily visitors, a figure that would multiply abysmally in the next year. In 1997, success made Amazon become one of the most important companies in the network. Amazon launched its initial public offering of shares on May 15, 1997, and the company's shares at that time were being offered at a price of $ 18 per share. In 2007, Bezos rocked the world with the creation and launch of Amazon's alter ego. This is Amazon Kindle, a device specially designed for displaying electronic books. Amazon Kindle was first released in North America. Announced on October 11, 2016, its plans to build physical stores and develop sidewalk pick-up points for food. This new business model was called "Amazon Go". The store finally opened to the general public on January 22, 2018. At the begining, Amazon´s bussiness was base on the “sell all, carry few”. Later, Amazon changed its business model from “sell all, carry few” to “sell all, carry more”. As case 16 indicates, the 4 pillars of Amazon's business model were low prices, wide selection, convenience and customer service

Amazon employs a multi-level e-commerce strategic. The company started by focusing on B2C (Business to Consumer) type business with its end consumers and B2B (Business to Business) type with its suppliers. Later, he incorporated C2B transactions when realizing the value of his customer's reviews as a fundamental part of the description of the products. Nowadays it also facilitates the C2C channel with Amazon Marketplace, where it acts as an intermediary in the transactions. Amazon's great competitive advantage has always been cost leadership compared to its competitors in the online market. Inside this area we can highlight the price discrimination of one site with respect to another. Another aspect to highlight in the Amazon strategy is the great diversification, for example with the creation of AmazonFresh. However AmazonFresh faced problems inherent in the home delivery service including excessive wastage of food, management of refrigerated warehouses, hiring excessive wastage of food, hiring additional delivery people in each new market and logistical complexities. The high cost of the losses caused by food spoilage was an iisue with AmazonFresh that company had never faced with its other bussiness. There were many attempts by amazonfresh to increase profits, such as “Big Radish” that offered free o discounted delivery based on a customer´s total spending within a certain time period and the order size. The “Just Walk Out” technolgy in the store allowed customers to shop and checkout without having to pay at a cash register. Moreover, the store required the use of a credit or debit card and this is a problem for many people. And the analysts pointed out that the stores trial had excluded shppers without smartphones. SWOT ANALYSIS Strengths: brand power and know how of amazon, development of technologies and comprehensive systems for logistics management, ability to successfully optimize and operate data center (Big Data), development of digital marketing in a personalized way by client, capacity for continuous development and adaptability, capacity for empowerment and teamwork, ability to provide excellent customer service, ability to reinvest. Opportunities: the behavior of buying in the USA after going through a great economic crisis, the habits of buying and consuming have changed. Consumer behavior has evolved and its trend towards more responsible, price-sensitive consumption gives more options and flexibility in services that meet needs. Advances in technology are opportunities that Amazon can take advantage of and implement it in the physical stores it owns. Weaknesses: few physical stores, improve compliance network and customer response time in the shipment of products and returns, low profit margin due to high operating costs, improve the process of full-filment. Threats: geopolitical changes can affect the company at the cost level, since it would affect the margin to be obtained. The Trump effect, as a political factor, is a threat to the stock price and generates negative expectations.

Your action recommendations Write your recommendations and be critical not descriptive. Quote the references you accessed to let the reader understand how you used them to prepare the answer: you will have to justify and reinforce your suggestions even to actualize problems and solutions to the current scenario (that could be different than the one descripted in the reading).

1. What is competition like in the grocery retail industry? Which of the five competitive forces is strongest? Which is or are weakest? What competitive forces seem to have the greatest effect on industry attractiveness and the potential profitability of new entrants? The growth rate of the industry is increasing, so this rivalry intensifies and therefore has low appeal. I think that the one that has more strength is in the negotiating power of the suppliers, since in this industry there are many suppliers, therefore it will be easy to change suppliers and we can obtain a lower price. The weakest is the threat of new competitors because there are not many barriers to entry, and the capital requirement to open an online store is not very high. As it is not a very expensive industry, the attractiveness is very high, and above all, because economies of scale can be easily achieved. 2. What does your strategic group map of the U.S. grocery retail industry look like? Is Whole Foods Market suitably positioned? Why or why or why not? As can be seen in the graph, Whole Food Market is not in a good position in the market with respect to its competitors. This is because, among other things, customers could not touch the products they were going to buy, and some of these products depend a lot on their texture. It has also been affected because its main competitors such as Walmart, Kroger or Target have invested to improve their capabilities as a company or have partnered with third parties such as Instacart. Another aspect to highlight is that its own employees have seen how Whole Food has lost its essence and has been totally absorbed by Amazon, with posters everywhere, Amazon food kits, a box where it says Prime, etc. 3. What do you see as the key drivers of change in the U.S. grocery retail industry? Based on these drivers, trace Amazon, Inc.’s evolution in the U.S. retail grocery industry. Is the Amazon Inc. / Whole Foods Market combination potentially disruptive? Why or why not? Because the same quality is always offered, brand loyalty, promotions, e-commerce boom and the adoption of new forms of purchase by consumers, both online and offline. Whole Foods' performance did not skyrocket since its entry into Amazon despite changes made by it. Food chain revenue has been sustained after the acquisition, reaching quarterly revenue of between $ 4200 millions and $ 4600 millions in Whole Foods' full six quarters within Amazon. 3

Whole Foods shares soar 28% following Amazon's purchase announcement. Shares of the Whole Foods supermarket chain soared more than 28% after announcing its purchase by Amazon, valued at $ 1300 millions. For its part, Amazon rose 2.8% and was above $ 990 per share. Today, more Whole Foods products are sold than before, but stores have not gained significant sales. Whole Foods posted a 2.7% drop in sales in the fourth quarter of 2018 and a 1% rise in the first quarter of 2019. Slower growth than Whole Foods had before being purchased. Amazon maintains that the real sales increase for the last quarter of last year was 6% On the other hand, Whole Foods has registered a 3.6 point increase in Forrester's annual customer experience index. The largest increase of any brand in the United States. This has been reflected in a 16% growth in customer traffic in stores during the first months of 2019, mainly driven by the use of online shopping collection points. Based on all these data, I think that the purchase of Whole Foods has been a good option for Amazon, because in just two years those sales have increased, and it is a long-term investment. 4. What key factors may determine the success of the Amazon, Inc. combination with Whole Foods Market? In addition to lowering prices for prime customers, it has also introduced price improvements on key products for all customers. With its ability to analyze the price elasticity associated with increased consumption, it has touched those products with the greatest impact on price perception. Amazon has introduced several promotional venues throughout the store, where it has introduced top-selling Amazon products. They decided to lower the prices of some basic products such as some fruits, including avocado, eggs and salmon. Amazon Prime members will see a 10 percent reduction in dozens of products in stores, in addition to weekly discounts, as well as reduced prices on certain items. Prime Now users will be able to start ordering products from Whole Foods with a free address, if the total products in the basket have a total value of more than $ 35 dollars.

5. 5.What recommendations would you make to Je Bezos, CEO and founder of Amazon, Inc. to improve Whole Foods Markets’ competitiveness in the market while mitigating any current and future risks?

Do not place too many items in the Whole Food Market that refer to Amazon, as there are workers who explain that the essence of Whole Foods is being lost as the shelves are full of Prime, Amazon kits, etc. Help Whole Market workers against Covid-19, as some feel unprotected by their bosses despite measures they have taken as an additional $ 2 per hour in addition to the hourly base pay and an increase in overtime pay. Get to get an economy of scale because the main difference between whole food market and its competitors lies in the price. It should be noted that Whole food market sells organic food, but perhaps this aspect does not interest many people and they go to cheaper places even if they are not organic.

Optional section: additional sources (company disclosures, web pages, video etc) N. Title Author Journal Year, Link number 1. Gladis https://www.youtube.com/watch?v=YFM3C5csqOM&t=764s Seara 2. https://r.search.yahoo.com/_ylt=AwrJS5fiEtle6kkAtyhU04lQ;_ylu=X3oDMTByZzJoOXByBGNvbG8DaXIyBHBvcwM0BHZ0aWQDBHNlYwNzcg- -/RV=2/RE=1591313250/RO=10/RU=https%3a%2f%2fwww.fortuneenespanol.com%2fnoticias%2famazon-vs-walmart-batalla- minorista%2f/RK=2/RS=kuFSNCTsCjyMxweAKBWY5QRuPfc- … https://www.fortuneenespanol.com/noticias/amazon-vs-walmart-batalla-minorista/

Final debriefing about “Chapter 9” Analyzed by _____ - name – _____ - surname

Scientific articles/papers

State at least n.1 scientific article/paper you selected to support your analysis about one or more topic covered by chapter 9

N. Title Author Journal Year, number Link 1. 2. 3.

Describe paper objectives and methodology

(Text format: n. 12 points Garamond, single-spaced, with justified left and right margins)

Your analysis recommendations Write your recommendations and be critical not descriptive. Applying the paper findings, describe your remarks to let the reader understand how the selected paper could be used to investigate one or more topic covered by chapter 9.

(Text format: n. 12 points Garamond, single-spaced, with justified left and right margins)

Optional section: additional sources (company disclosures, web pages, video etc) N. Title Author Journal Year, number Link 1. 2. …