Premium Essay

Amazon Analysis Report

In: Business and Management

Submitted By tamyahoo
Words 1135
Pages 5
Amazon is an American international electronic commerce company formed by Jeff Bezos in 1994. It is one the largest online retailer in the world.[1] Below is the analysis for the market valuation of Amazon.
Threat of New Entrants
When it is easy to enter the industry, the threat would be big. A bigger threat will lower the potential profitability in the industry. Regarding the industry, the market entry barrier is low because the technology requirement is not high. However, economic of scale enables Amazon to provide services and products at a competitive low price. Also it has built up its reputation and accumulated a certain amount of loyalty customers. It is difficult for a new startup company to compete with Amazon. Profitability of Amazon is high due to the small threat of new entrants.
Threat of Substitute Products/ Service
When there are more substitute products or services, the threat would be larger and the profitability of Amazon would be lower. Amazon is an online retailer selling various products. It is an innovative service and hence has a high brand recognition. Compared with substitute service such as service of buying on customer’s behalf, Amazon can provide more confidence to customers. Also, traditional retailers are also a substitute service to Amazon. However, there would not be a big conflict between Amazon and the traditional retailers because of the consumer behavior. This means some consumers would insist in shopping in a physical stores while some would prefer to online shopping. Also with a wide spread use of smartphone and tablets, consumers are shifting to online purchasing. Therefore, the threat of substitute service is small.
Bargaining Power of Suppliers
With a lower bargaining power of suppliers, the cost would be lower and profitability would be higher. The bargaining power of supplier in the

Similar Documents

Premium Essay

Situational Analysis Report for Amazon Drive-Thru Grocery

...MKT100 Principles of Marketing 10/27/2015 Situational Analysis Report for Amazon Drive-Thru Grocery Ryerson University Situational Analysis Strengths Amazon has been in business for over 20 years and is known for its wide distribution network and low prices.Amazon Fresh builds on this network distribution centers. Amazon’s management team is led by “clear thinking and a cohesive vision, even if it takes a while for rivals to figure out Amazon’s motives.”Amazon Fresh’s most marketable feature that will resonate with customers the most is that it offers local products. Amazon Fresh works with small business, which gives customers“more of a local flavor than places like Wal-Mart.”Thanks to Amazon’s close relationship with its suppliers allows it to offer the lowest overall prices for household items. Weaknesses Amazon Fresh is currently in a few cities. Amazon Fresh will need a lot of time to expand. Think about how long it took Wal-Mart to expand. Amazon Fresh must also built dedicated refrigerated warehouses to be able to handle fresh fruit and frozen items.With properties over valued in Canada it will limit Amazon’s ability to expand. Amazon Fresh may have trouble hiring people because workers have told Business Insider that it’s a “bruising workplace where employees are asked to harshly critique their peers, and those suffering personal crises are often pushed out of their positions.” Another weakness lies in Amazon Fresh’s search feature. Many users reported that they...

Words: 903 - Pages: 4

Free Essay

Amazon - Case Report

...Case Report - Amazon CONTENT 1. Amazon in Brief 2. Amazon’s Five Forces 2.1 Threat of New Entrants 2.2 Bargaining Power of Buyers 2.3 Rivalry Among Existing Competitors 2.4 Bargaining Power of Suppliers 2.5 Threat of Substitute Products or Services 3. Amazon’s Value Chain 4. Conclusion 5. References Case Report - Amazon 1. AMAZON IN BRIEF, an American company, started the journey 1994 in a small garage based in Seattle, Washington. Today, twenty years later Amazon has become the world's largest web retailer with a predicted revenue around $100 billion in 2014. The founder Jeffrey Bezos, a former Wall Street broker, started by selling books online from the garage in Seattle through the website; With a mission to provide everything for everyone. The company is one of the most customer-centric company in the world and every decision taken by Amazon, started with the key question; What is the value for the customer? - to provide the costumer with the best possible experience of Amazon. Jeffrey Bezos did not care about profit or return to the shareholders; the main focus has always been to provide the costumers with the most enjoyable experience. By offering a wide range of products and services to the lowest possible price and a fast and convenient delivery. Over the years, the selection of products and services have expanded enormously from just...

Words: 1690 - Pages: 7

Premium Essay

Marketing Analysis of Amazon

...Introduction This report conducts External Analysis for Amazon, which includes macro and micro factors, Strategic Analysis, consisting of Porter's 5-force model, SWOT analysis and Marketing Mix, which conclude 7Ps, in order to assist Amazon in extending into a new online service, a social platform named `Amazon Book Club`. Part A: External Analysis 1. The Macro environment 1.1 Economic In recent years after economics crisis, global economy has been gradually improved. GDP, as a measure of a countries’ economy, has been increased in a stable pace in America [1]. At the same time, according to the data from People’s Daily Online, China’s household disposable income reached 20167 yuan in 2014, 8.0 percent increase compared with 2013 [2]. Take China as an example, ‘shopping online’ becomes the hot words in recent years. As it indicates in the chart [3], the scale of the E-commerce market extends gradually. All these figures indicate that people are more capable to purchase and attach more importance to the quality of life. Amazon, in the last 18 months, undoubtedly benefited from this tendency. For example, in the first Chinese ‘shopping overseas festival’ beginning on 28th, November in 2014, the sale increased by 24 times compared with the week before it [4]. 1.2 Political a. Governments’ policies will influence market structure and behavior. For example...

Words: 3533 - Pages: 15

Premium Essay

Term Paper

...Amazon Strategy Analysis The strategic planning processes. Amazon and other large enterprises to build your organization with a view - from the view of the company’s mission, goals and objectives are developed. Many times during the life of an organization is necessary for the organization to redefine the objectives of the organization on the basis of profitability, customer concerns, and the internal, external and international challenges. • Value Chain • Resource Based View • Financial Analysis Using an Analysis of the Value Chain Amazon Amazon has developed an analysis of the value chain of its Competitive Advantage “own internal operationally better assess how you can add value and sustain competitive advantage have used the value chain model of Michael Porter,"Create and maintain superior performance. " Example of a Strategic Plan Model - Amazon Internal Analysis Tools, Strategic Planning, Strategic Planning Models Primary activities and support activities Primary activities are those needed to produce a product or service to the end customers. These activities generally include: • Inbound Logistics: receiving goods from suppliers, and store and move the good • Operations: Manufacturing or assembly of the product • Outbound Logistics: The shipment of goods to wholesalers, retailers or directly to the final customer • Marketing and Sales: Marketing involves customer needs understanding, communicating...

Words: 1384 - Pages: 6

Premium Essay


...The purpose of this report is to conduct a comprehensive business performance analysis using financial historical information/analysis of Costco. While Costco may not seem to have the revenue, assets and market share like similar and larger companies such as Wal-Mart and Target they are without a doubt a very profitable and successful company. What Costco lacks in high margins, they make up for in being a highly efficient company boasting high asset and equity turnover while maintaining optimum liabilities and debt to equity ratios. Costco is a great company that is seeing profitable success due to their business model that prioritizes quality for both its customers and employees. However, emerging with the 21st century are new ways of doing business. Online companies like are quickly taking market share not just from Costco but also their biggest competitors: Wal-Mart and Target. In order to stay relevant, Costco will need to maintain their business growth in the coming years and also find ways to compete against online retail giants like 1. Company Background Costco is a multi-billion dollar warehouse company that operates on a global scale. Consumers can frequent Costco to find merchandise including but not limited to groceries, electronics, furniture and home goods, pharmaceuticals and gasoline. Costco specializes in purchasing its merchandise wholesale and re-selling to consumers. Consumers who frequent the warehouse club are required to pay...

Words: 3764 - Pages: 16

Premium Essay

Amazon in the Year 2000

...2000 Syed T.A Zaidi 100285122 BUSI 3150 Financial Statement Analysis Prof. Jane Bowen March 14th, 2011 Long Term Viability of Amazon Amazon had a significant vision in terms of its long-term viability. This vision consisted of many strategies that allowed them to operate efficiently and effectively. Amazon primarily raised profits by the means of developing strong brand equity on a global scale, developing direct relationship with wholesalers allowing them to reduce inventory shipping/holding costs supported by an excellent logistic system, which permitted them to deliver any and every product fast. They also started up this venture when the Internet market was just emerging, therefore allowing them to be one of the pioneers of this business. Amazon also pursued a strategy to incur huge loses in the current time period, in order to gain profits for the future “high the risk, higher the return”. The company chose to go down this route primarily to gain majority of the market share in the online book-selling sector. These strategies however raise a question as to why and how Amazon is performing while implementing these strategies. Are they invincible or just ‘cooking books” and becoming another Enron. Significant concerns go towards the brand equity, which is an intangible asset, however the company places dedicates majority of the profitability to this aspect of the venture. Another question, which concerns Amazon is the barrier to new entrants, as mentioned in the case at...

Words: 918 - Pages: 4

Premium Essay

Business Valuation

...Q&A Introduction CASE = AMAZON.COM IN YEAR 2000 Version: 4/12/10 This case analyzes Amazon’s growth strategies up to June 2000, and critiques Lehman Brothers’ credit analyst Ravi Suria’s report of that month. Suria report was one of the first to be publicly critical of the cash flow prospects Amazon and the dot com sector in general. He did this because he was a credit analyst and Amazon was rare among dot coms to have a lot of debt. The case provides a variety of learning opportunities: (1) an evaluation of a company’s strategy and performance from a credit analysis perspective; (2) an appreciation of the potential value of contrarian thinking in fundamental analysis; and (3) the analysis of the type of strategies and market conditions that fueled the dot com bubble. Q1. 1.1 Regarding the long-term viability of Amazon's business per the case: What was Amazon’s original business model? (2 pts) I shall define a for-profit firm’s business model as the set of plans and strategies for the future that the firm has in place for earning at least normal profitability in the long run. Viewed through the lens of a statement of cash flows, a business model requires: Plans for financing; strategies for converting the cash raised by financing into investments of tangible and/or intangible assets; and strategies for generating abnormal profits from those assets through operations. Note that in their investing and operating activities, firms are less likely to be price takers...

Words: 4583 - Pages: 19

Premium Essay

Marketing Essentials

...A marketing plan report for Kindle Fire in the UK [pic] Contents A marketing plan report for Kindle Fire in the UK 1 Introduction 3 Amazon 3 Current Market Scenario 4 Global Market- eBook 4 Competitive landscape 4 Market Structure 5 SWOT Analysis 6 Amazon Kindle Fire 7 Corporate Strategy of Amazon 7 Marketing Objective 7 Marketing Strategy 8 STP of Kindle Fire 8 Segmentation 8 Targeting 9 Positioning 9 Marketing Mix 9 Product 9 Price 10 Place 10 Promotion 10 Promotional Cost 10 Cost Estimation of Kindle Fire 11 Revenue Model 11 Conclusion 11 Bibliography 12 Introduction Marketing is a strategic activity of a business, It incorporates understanding the marketplace, bring the product or service to the market or even developing a new market for a product. In the broadest sense marketing is a superset of different activities including market research, market development, competitor analysis, pricing strategy promotion etc (Weinstein, 1998). Here in this report, exclusively cover various marketing essential elements for Amazon Kindle, for the entrance into UK market. Apart this, main objective of this report is to develop a marketing plan for the successful entrance of Amazon into the UK digital market. In this report, various macro & micro elements which interact with the company as well as the global market scenario, competitive landscape and future trends and projections are discussed to tailor the marketing...

Words: 2981 - Pages: 12

Premium Essay

Strategy at Amazon

...Management Consultancy Report Aleksandr Karev (A816441) Abstract The purpose of this report is to analyse the strategic position of Amazon and determine any competitive advantages held by the company. Beginning with a discussion of Amazon’s industry and review on the political, economic, social, and technological environments in which the company operates, the report than narrows to focus on Michael Porter’s Five Forces: threat of new competition, threat of substitutes, bargaining power of customers, bargaining power of suppliers and intensity of competitive rivalry. The report continues with a thorough SWOT analysis of the company and follows on to the analysis of the company’s internal environment. Resource base view together with value chain analysis has been chosen to analyse Amazon’s internal environment. Introduction Company Overview Jeffrey Bezos started Amazon in 1994, after identifying that Internet usage was growing at a rate of 2,300 per cent per year (Emerland, 2002). Working from a 400-square foot office in Seattle, Jeffrey launched Amazon in July 1995. By the end of 1996, Amazon has posted sales of over $16 million and served about 180,000 customer accounts, which made it one of the most successful Web retailers in the world (Galante, 1997). Amazon has continued to expand its customer base, and sales revenues have increased every year. The firm’s revenues increased from $16 million in 1996 to $41.1 billion in 2011 (Bloomberg, 2012). Today, Amazon offers perhaps...

Words: 5579 - Pages: 23

Premium Essay

Audit Report - Amazon

...ACT 410 10-K Annual Report, Inc. Miriam Batres Part I - 1. What is the purpose of the Management Discussion and Analysis (MD&A)? The Management Discussion and Analysis section of the company’s annual report is a report from management to shareholders that accompanies the firm’s financial statements. It explains the period’s financial results and enables management to discuss topics that may not be apparent in the financial statements in the annual report.[1] The MD&A section also emphasize on other parts of the company and explain what accounting methods they use. 2. Summarize the SEC requirements for the presentation of the MD&A. The SEC requires that the MD&A present the most important and relevant information to the investors or anyone who reads the MD&A. The SEC emphasizes that the MD&A shouldn’t be a recitation of financial statements in narrative form; it should come from management in terms that everyone can easily understand. The SEC emphasizes the following: overall presentation and focus of MD&A, an emphasis on analysis of financial information, known material trends and uncertainties, key performance indicators, including non-financial indicators, liquidity and capital resources, and critical accounting estimates. [2] Part II - 3. What types of investments does the company hold? According to the Annual Report, amazon invests in money market funds, corporate debt securities, U.S. government agency securities, asset backed securities...

Words: 1778 - Pages: 8

Premium Essay

Study on Amazon

...this publication at: A STUDY ON AMAZON: INFORMATION SYSTEMS, BUSINESS STRATEGIES AND e-CRM ARTICLE · APRIL 2014 READS 9,305 1 AUTHOR: Abdullah Al Imran 1 PUBLICATION 0 CITATIONS SEE PROFILE Available from: Abdullah Al Imran Retrieved on: 29 September 2015 A STUDY ON AMAZON: INFORMATION SYSTEMS, BUSINESS STRATEGIES AND e-CRM MD. ABDULLAH AL IMRAN DEPARTMENT OF COMPUTER SCIENCE & ENGINEERING UNIVERSITY OF LIBERAL ARTS BANGLADESH 2014 Table of content Background 3 Part 1- Information Systems utilized for internet activity 3 1. Information System 3 2. Transaction Processing System 4 3. 1-click purchase 4 4. Secure C/debit card payment 4 5. Recommendation System 5 6. Interactive searching System 5 7. Supply Chain Management (SCM) 5 8. Enterprise Resource Management (ERP System) 5 9. Customer Relation Management (CRM) 5 Part 2-Business strategies applied for internet activity 6 1. Smart Innovation Strategy 6 2. Customer Relation Management Strategy 7 3. Jeff Bezos 3 big idea 7 Page-1 A. Limitless inventory 7 B. Customer Care 8 C. High margin, lowest price. 8 4. Marketing and Promotion Strategy 8 5. Associate Program 8 Part 3- eCRM cycle Conducted for internet Activity 9 1. Customer Relationship Management 9 2. Electronic Customer Relationship Management 9 3. How amazon implement CRM 9 4. Customer Selection 10 5. Customer Acquisition 10 A. Customer...

Words: 3521 - Pages: 15

Premium Essay

Amazon's E-Business Model

...Barnes & Noble Vs. Amazon To attain a competitive advantage over, Barnes & Noble needs to develop a proper strategy and implement a successful marketing plan.   SITUATION ANALYSIS Barnes & Noble first must consider the issues and problems facing their company, and then perform an opportunity analysis to determine their strengths and weaknesses in relation to their customers, competitors, and company capabilities.   In regards to the main concerns of Barnes & Noble, the company needs to worry about the uncertainties associated with the expected rapid growth of the Internet, the changing profile of Internet users, increased competition and indeterminate future developments in electronic retailing from publishers, wholesalers, and retailers, and intense price competition.   By 2000, more than 80 million users will be on the World Wide Web, with an increase in females and a broader spectrum of education levels and age, changing the market demographics.   Additionally, some book publishers, namely Simon & Schuster and Bertelsmann, have expanded online, while the national leading wholesaler, Ingram, is developing a website where wholesalers could ship directly to consumers.   In the meantime, small publishers and universities have started to publish directly on the Web, avoiding print versions completely and thereby challenging the posterity of conventional books.   Within the Barnes & Noble Corporation, their smaller traditional bookstores such...

Words: 2657 - Pages: 11

Free Essay


...Calculators, lemmings or frame-makers? The intermediary role of securities analysts Daniel Beunza and Raghu Garud Introduction As Wall Street specialists in valuation, sell-side securities analysts constitute a particularly important class of market actor.1 Analysts produce the reports, recommendations and price targets that professional investors utilize to inform their buy and sell decisions, which means that understanding analysts’ work can provide crucial insights on the determinants of value in the capital markets. Yet our knowledge of analysts is limited by insufficient attention to Knightian uncertainty. Analysts estimate the value of stocks by calculating their net present value or by folding the future back into the present. In so doing, they are faced with the fundamental challenge identified by Frank Knight, that is, with the difficulty of making decisions that entail a future that is unknown. These decisions, as Knight wrote, are characterized by ‘neither entire ignorance nor complete . . . information, but partial knowledge’ of the world (Knight, [1921] 1971: 199). The finance literature has not examined the Knightian challenge faced by analysts. Indeed, existing treatments circumvent the problem by adopting one of two extreme positions. In the first, put forward by orthodox economists, it is assumed that Knightian uncertainty is non-existent and that calculative decision-making is straightforward. Analysts are presented as mere calculators in a probabilistic world...

Words: 12718 - Pages: 51

Free Essay


...Amazon – Group Work Cost Factors Amazon has a fixed cost business model, they use the Internet to gain highest possible leverage out of their fixed assets. They sell music, books and consumer electronics, which means they are selling ownership of a physical product, this is called asset sales. They have a massive IT infrastructure that needs maintenance to keep their costumers. Amazon let individuals and companies pay a small fee to use their infrastructure, using it as storage for their business. This is cheaper for the customers and Amazon benefits from it. It may seem that Amazon is struggling economically since they keep losing profits, but investors keep putting money into the business, pushing them to a higher level. It is shown that Amazon is a very beneficial platform due to the fact that people wish to sell via their homepage. They tend to loose money due to their massive investments, but in the end they profit from all of their transactions. Amazon's annual report from 2012 shows a decrease in operations income by 22% in 2012, a 3% decrease since 2010. However their cost of sales has increased to 24,8% in 2012, 2,5% increase since 2010. References Noren, E (2013) Digital Business Models, How Companies Make Money Online. Available at: (Accessed: 21 November 2013) Business Insider (2013) Former Amazon Employee Explains How The Company's Business Model Really Works...

Words: 293 - Pages: 2

Premium Essay


...decrease expenses. Amazon is a company that has taken it to new heights in terms of how they perform business. Their prices are low due to the fact that they do not have very much inventory. They work with other companies to help provide them exposure for their business in exchange for lower prices for their products. However a fierce competitor in terms of size and resources not to mention media and other digital information is Google. It has been spending mass amounts of money in order to compete and possibly take down Amazon. Below is a comparison of both the giant corporation’s financial story. The facts and figures in this report are based on the 2014 fiscal year as per the references listed at the end of the report. Profitability Ratios Gross Margin Google Amazon ($66,001,000,000-49,905,000,000) (88,908,000,000-63,880,000,000)/88,908,000,000=%28.15 /66,001,000,000=%24.39 Because it shows company retains after incurring the direct costs associated with producing the goods and services sold by a company. Amazon is more efficient than Google. The numbers are slightly higher on Amazons side due to more products and items are sold as compared to services or apps. Google has the App store but Amazon also has Amazon Prime as well as numerous other services. They both compare fairly equal in terms of services and goods. Operating Margin Google Amazon $4.4B/66,001,000,000 =6.6% 178,000/88,908,000,000=.008% After operating margin analysis we can say that neither...

Words: 1096 - Pages: 5