Amazon business model
-
Upload
engtahrawi -
Category
Business
-
view
324 -
download
0
description
Transcript of Amazon business model
Virginia RosalesAnabel JuárezJaime Millán
Vladimir Matović
October 2010
Business Models: Themes and Issues
- from A to ZCompany Overview
Mission, Vision & ValuesCore Value Proposition, Objective & StrategyThree Customer Sets
Attention Economy and e-TrustBusiness Model
Amazon.com Business Model EvolutionBusiness Model Canvas – The 9 Building BlockseBook/KindleValue Capture
Diversifying Revenue Streams Geographical Expansion & Product Range Amazon.com Acquisitions and Investments Sales
Conclusion Sky is the limit
References
- from A to ZCompany Overview
Mission, Vision & ValuesCore Value Proposition, Objective & StrategyThree Customer Sets
Attention Economy and e-TrustBusiness Model
Amazon.com Business Model EvolutionBusiness Model Canvas – The 9 Building BlockseBook/KindleValue Capture
Diversifying Revenue Streams Geographical Expansion & Product Range Amazon.com Acquisitions and Investments Sales
Conclusion Sky is the limit
References
Company Overview
Founded in 1994in Seattle, USA
28,300 employees
Global leader in e-commerce
Wide range of products
Worldwide network of fulfilment
Mass customisation
Customer experience Affiliations Stickiness
• ‘To leverage technology and the expertise of our invaluable employees to provide our customers with the best shopping experience on the Internet.’
Mission
• ‘To be earth’s most customer centric company; to build a place where people can come to find and discover anything they might want to buy online.’
Vision
• Customer Obsession• Innovation• Bias for Action• Ownership• High Hiring Bar• Frugality
Values
• ‘Not to discount a small number of products for a limited period of time, but to offer low prices everyday and apply them broadly across our entire product range.’
Objective
• Price• Convenience• Selection
Core Value Proposition
• ‘To ‘Get Big Fast’ by investing aggressively in new product categories and new businesses, by spending money on brand awareness and getting new customers.’
Strategy
Strategy
Source: www.amazon.com
Who want to buy products on Amazon
Who want to use Amazon
developing services
Who want to sell products on Amazon
Three Customer Sets
Consumers
DevelopersSellers
- from A to ZCompany Overview
Mission, Vision & ValuesCore Value Proposition, Objective & StrategyThree Customer Sets
Attention Economy and e-TrustBusiness Model
Amazon.com Business Model EvolutionBusiness Model Canvas – The 9 Building BlockseBook/KindleValue Capture
Diversifying Revenue Streams Geographical Expansion & Product Range Amazon.com Acquisitions and Investments Sales
Conclusion Sky is the limit
References
- from A to ZCompany Overview
Mission, Vision & ValuesCore Value Proposition, Objective & StrategyThree Customer Sets
Attention Economy and e-TrustBusiness Model
Amazon.com Business Model EvolutionBusiness Model Canvas – The 9 Building BlockseBook/KindleValue Capture
Diversifying Revenue Streams Geographical Expansion & Product Range Amazon.com Acquisitions and Investments Sales
Conclusion Sky is the limit
References
How long do you stay @ ?
Attention attraction and retention
Customer’s needsRelevant ContentFrequent UpdateBuying habitsReactions to Web site designDemographicsFavorite and least favorite products
HOW?
GOAL:
Brand DifferentiationCustomer Loyalty
e-TrustQualityValueTimelinessAppropriateness of Goods & ServicesBusiness ReputationSecurity in Transactions
How long do you stay @ ?Stickiness
Holds customers and keeps them coming back for more!
Measurement: *Time spent at a website *Number of visits per person *Number of pages viewed
Products & Services
Content
Interactivity & Production Values
Personalization
CustomizationOwnership &
Belonging
Co-Creation & Recognition
2
3
4
Variety
5Speed & Delivery
1Easy
Navigation
- from A to ZCompany Overview
Mission, Vision & ValuesCore Value Proposition, Objective & StrategyThree Customer Sets
Attention Economy and e-TrustBusiness Model
Amazon.com Business Model EvolutionBusiness Model Canvas – The 9 Building BlockseBook/KindleValue Capture
Diversifying Revenue Streams Geographical Expansion & Product Range Amazon.com Acquisitions and Investments Sales
Conclusion Sky is the limit
References
- from A to ZCompany Overview
Mission, Vision & ValuesCore Value Proposition, Objective & StrategyThree Customer Sets
Attention Economy and e-TrustBusiness Model
Amazon.com Business Model EvolutionBusiness Model Canvas – The 9 Building BlockseBook/KindleValue Capture
Diversifying Revenue Streams Geographical Expansion & Product Range Amazon.com Acquisitions and Investments Sales
Conclusion Sky is the limit
References
2007
1995
2001
2000
1999
2002
2010
Auctions & zShops
eBooks/Kindle
E-commerce Platform/
Web Services
Marketplace
OnLine Book Retailing
Partherships &
Logistic Services
Business Model Evolution
Business Model Canvas9 building blocks
Customer Segment (CS)
Cost Structure(C$)
Customer Relationship (CR)
Channels (CH)
Revenue Streams (R$)
Key Resources (KR)
Key Partnerships (KP)
Key Activities (KA)
Value Proposition
(VP)
MARKETINGTECHNOLOGY & CONTENT
FULFILMENT
SALES MARGINS
AUTOMATED SERVICES & CO-CREATION
(CUSTOMISED ONLINE PROFILES &
RECOMMENDATIONS)
AMAZON.COM (& OVERSEAS SITES)
AFFILIATES
IT INFRASTRUCTURE, SOFTWARE & EXPERTS
GLOBAL FULFILMENT INFRASTRUCTURE
FULFILMENT & IT INFRASTRUCTURE
DEVELOPMENT AND MAINTENANCE
Business Model Canvas
GLOBAL MARKET (SELLERS &
CONSUMERS)INTERMEDIATION
SERVICES
COMMISSIONS
SELLERS (COMPANIES & INDIVIDUALS)AGGREGATION OF
DEMAND (LONGTAIL)
FULFILMENTCOMPANIES (ONLINE &
TRADITIONAL RETAILERS)
LOGISTICS NETWORK
PARTNERSHIPS & ALLIANCES
DEVELOPERSMASS-CUSTOMISED
WEB SERVICES
APIsPORTABLE DEVICE
PRODUCT DEVELOPMENT, AND
PROMOTION
HARDWARE MANUFACTURERS
GLOBAL MARKET (CONSUMERS)
LOW PRICESCONVENIENCE
WIDE SELECTIONCUSTOMER EXPERIENCE
LOGISTIC PARTNERS
AFFILIATES (PUBLISHERS, AUTHORS,
BOOKSTORES…)
Online RetailingAuctions & zShopsMarketplacesPartnerships and Logistic Service ProviderE-commerce Platform/Web ServiceseBooks/Kindle
COMPANIES (ONLINE & TRADITIONAL
RETAILERS)
eBooks/Kindle>450 000 books available for download
Newspapers, magazines and blogs subscription
Amazon keeps 65% of the revenue from all eBook sales for Kindle
eBooks downloaded from Amazon not exclusive to Kindle
Kindle eBooks add 35% to a physical book’s sale on Amazon
Amazon reported 80% of eBook market
"Our vision is to have every book ever printed, in any language, all available in tinder 60 seconds.“
- Jeff Bezos, Amazon.com CEO
Capture Value:transforming earnings into profits
Capital efficiency
Inventory turnover
Cash generative
cycle
Maximize Profit Dollars, Not Margins
- from A to ZCompany Overview
Mission, Vision & ValuesCore Value Proposition, Objective & StrategyThree Customer Sets
Attention Economy and e-TrustBusiness Model
Amazon.com Business Model EvolutionBusiness Model Canvas – The 9 Building BlockseBook/KindleValue Capture
Diversifying Revenue Streams Geographical Expansion & Product Range Amazon.com Acquisitions and Investments Sales
Conclusion Sky is the limit
References
- from A to ZCompany Overview
Mission, Vision & ValuesCore Value Proposition, Objective & StrategyThree Customer Sets
Attention Economy and e-TrustBusiness Model
Amazon.com Business Model EvolutionBusiness Model Canvas – The 9 Building BlockseBook/KindleValue Capture
Diversifying Revenue Streams Geographical Expansion & Product Range Amazon.com Acquisitions and Investments Sales
Conclusion Sky is the limit
References
Source: www.amazon.com
Source: www.meettheboss.com
z
Worldwide Sales MixQ1 ’04 – Net Sales $5,710 MM
76%
Q4 ’09– Net Sales $24,509 MM
52%
22%
2% 3%
45%
WW Media (Books, Music, Movies, Video Games and Consoles, Software and Digital Downloads) WW Electronics & Other General Merchendise (EGM) WW Other (Marketing and Promotional Activities, Amazon Web Services, Amazon Enterprise Solutions, & Co-branded Credit Cards)
Source: www.amazon.com
International Sales
2004 2005 2006 2007 2008$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
$8,000
$9,000
$10,000
$3,074
$6,740
$8,938
MM
• 2008 International sales 47% of WW sales, up from 45% in 2007• Shipments to over 200 countries
Source: www.amazon.com
- from A to ZCompany Overview
Mission, Vision & ValuesCore Value Proposition, Objective & StrategyThree Customer Sets
Attention Economy and e-TrustBusiness Model
Amazon.com Business Model EvolutionBusiness Model Canvas – The 9 Building BlockseBook/KindleValue Capture
Diversifying Revenue Streams Geographical Expansion & Product Range Amazon.com Acquisitions and Investments Sales
Conclusion Sky is the limit
References
- from A to ZCompany Overview
Mission, Vision & ValuesCore Value Proposition, Objective & StrategyThree Customer Sets
Attention Economy and e-TrustBusiness Model
Amazon.com Business Model EvolutionBusiness Model Canvas – The 9 Building BlockseBook/KindleValue Capture
Diversifying Revenue Streams Geographical Expansion & Product Range Amazon.com Acquisitions and Investments Sales
Conclusion Sky is the limit
References
Conclusion
Evolution
•Logical path•Resources & Channels•B2C, B2B
Expansion
•New markets•Strength of Brand•“Earth’s biggest selection”Attentio
n Economy
•Community & Stickiness•Trust•Customer Experience
Sky is the limit
Thank you!
References• Websites:
– www.amazon.com– www.youtube.com– www.charlierose.com– www.meettheboss.com– SOLOMON D. 2009. Questions for Jeffrey P. Bezos: Book Learning. Available at:
http://www.nytimes.com/2009/12/06/magazine/06fob-q4-t.html " [22.10.2010].
• Articles:– 2006. From Niches to Riches: Anatomy of the Long Tail. MIT Sloan Management Review, 47, 67-71.– 2008. Amazon.com: The Brink of Bankruptcy.– ANTE, S. E. 2009. HOW AMAZON IS TURNING OPINIONS INTO GOLD. BusinessWeek, 047-048.– DAVENPORT, T. H. & BECK, J. C. 2000. GETTING the ATTENTION You Need. Harvard Business Review, 78, 118-126.– HOF, R. D. 2003. Reprogramming Amazon. BusinessWeek, 82-86.– KIRBY, J. & STEWART, T. A. 2007. The Institutional YES. (cover story). Harvard Business School Publication Corp.– MUDAMBI, S. M. & SCHUFF, D. 2010. WHAT MAKES A HELPFUL ONLINE REVIEW? A STUDY OF CUSTOMER REVIEWS ON
AMAZON.COM. MIS Quarterly, 34, 185-200.– O'BRIEN, J. M. & SHAMBORA, J. 2009. AMAZON'S NEXT REVOLUTION. (cover story). Fortune, 159, 68-76.– PENENBERG, A. L. 2009. The Evolution of Amazon. (cover story). Fast Company, 66-74.– TONKERY, D. 2010. Amazon Versus Ebook Publishers. Searcher, 18, 41-43.– ZMUDA, N. 2009. AMAZON SAYS 'I DO' TO ZAPPOS. NOW WHAT? Advertising Age, 80, 4-4.
• Books:– DAVENPORT, T. and BECK, J., 2001. The Attention Economy, Understanding the New Currency of Business. 1st ed. United States of
America: Harvard Business School Press– DEMAIO, H., 2001. B2B and Beyond, New Business Models Built on Trust. 1st ed. United States of America: John Wiley & Sons
– OSTERWALDER A. and PIGNEUR Y., 2010. Business Model Generation, Hoboken: John Wiley & Sons– SPECTOR, R., 2000. Amazon.com: Get Big Fast. London: Random House Business Books