Amazon: Strategic Management
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Transcript of Amazon: Strategic Management
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Business 189 – Professor Shirley
Presented By: Alma Rios, Jeremy lacsa, José R. Vigil, Farhaad Sheikh, Kunal Patel
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Agendao Introduction
o EFE Matrix
o IFE Matrix
o IE Matrix
o SWOT Matrix
o Quantitative Strategic Planning Matrix
o Recommended Strategy
o Organizational Structure
o Organizational Culture
o Product Positioning Map
o Target Market
o Strategy Evaluation Report
Jeremy
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EFE MatrixKey External Factors Weight Rating Score
Opportunities
The number of buyers over the internet is growing
0.25 4.0 1.0
Forecasting increase in US ecommerce 0.2 4.0 0.9
Threats
eBay, OverStock (NewEgg, CDW, etc) 0.35 4.0 1.4
Government regulations and instability on internet products and sales in international economies.
0.05 1.0 0.05
Low market entry barriers 0.15 2.0 0.3
Totals 1 3.65
Jeremy
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IFE MatrixKey Internal Factors Weight Rating Score
Strengths
Customer Relationship Management 0.18 3.0 0.6
Strong Focus on R&D0.20 3.8 0.84
Diverse Products 0.13 2.5 0.375
Logistical advantage0.15 4.0 0.76
Weaknesses
High Debt Ratio 0.16 2.9 0.58
Risk of Introduction of Wrong New Category
0.09 1.9 0.19
Free Shipping affects bottom line 0.09 2.7 0.27
Total 1
3.615
Jeremy
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Strong Average Weak
(3-4) (2.0-2.99) (1-1.99)
HighII III
(3-4)
MediumIV V VI
(2.0-2.99)
LowVII VIII IX
(1-1.99)
IE Matrix
Jeremy
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SWOT Matrix
Strengths - S
1. Customer Relationship Management2. Strong Focus on R&D3. Diverse Products4. Logistical advantage
Weaknesses - W
1. High Debt Ratio2. Risk of Introducing a New Product or Service3.Free Shipping affects bottom line
Opportunities - O
1. The number of buyers over the internet is growing2. Forecasting increase in US ecommerce
SOS4O2 - Use logistic advantage to reach consumers in new countriesS1, O1 - Increase human interaction within the website.
S1O2 - Provide a loyalty program to provide an incentive to both new and existing members
WOO1,W3 - Leverage Amazon Prime subscriptions to absorb the cost of free shipping. O1,W2 - Create an online school that provides certifications
Threats - T
1. Growth potential of direct competitors (eBay, Overstock Newegg, CDW, etc.)2. Government regulations and instability on internet products and sales in international economies. 3. Low market entry barriers
STS1T1 - Maintain a strong relationship to increase consumer loyalty. S2,T3 - Set up affiliates with mom and pop shops for brick and mortar in store buying
WTT1,W1 - Increase Bond offerings to gain further lead over competitors.T1,W2 - Capitalize on Government use of cloud services to form relationships.
Jose
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Quantitative Strategic Planning Matrix
Jose
Increase human interaction within
the website.
Establish a loyalty program to provide further incentive to
both new and existing members
Create an online school that provides
certifications
Key Factor Weight AS TAS AS TAS AS TASStrengths From IFE
Customer Relationship Management 0.18 4.0 0.72 4.0 0.72 4.0 0.72
Strong Focus on R&D 0.20 2.0 0.40 2.75 0.55 4.0 0.80Diverse Products 0.13 0.0 0.00 3.0 0.39 4.0 0.52Logistical advantage 0.15 0.0 0.00 0.0 0.00 0.0 0.00Weaknesses From IFEHigh Debt Ratio 0.16 0.0 0.00 0.0 0.00 1.0 0.16
Risk of Introduction of Wrong New Category
0.09 3.0 0.27 2.0 0.18 1.0 0.09
Free Shipping affects bottom line 0.09 2.0 0.18 2.3 0.21 1.0 0.09
Sum of Weights 1.00 1.57 2.05 2.38Opportunities From EFEThe number of buyers over the internet is growing
0.25 4.0 1.00 4.0 1.00 4.0 1.00
Forecasting increase in US ecommerce 0.20 4.0 0.80 4.0 0.80 3.0 0.60
Threats From EFE
Growth potential of direct competitor 0.35 3.0 1.05 3.5 1.23 3.0 1.05
Government regulations and instability on internet products and sales in international economies.
0.05 1.0 0.05 1.0 0.05 2.5 0.13
Low market entry barriers 0.15 3.0 0.45 3.0 0.45 3.0 0.45
Sum of Weights 1.00 3.35 3.53 3.23
Sum of Total Attractiveness Score 2.46 2.79 2.80
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Introduce Online Certification Course for Amazon Vendors – Amazon University
Expand & Grow! Unrelated Diversification
Strategic Alliance with the University of Phoenix
Teach Amazon Vendors how to be effective by offering
Logistics, Customer Service, & Transactions
Final Recommended Strategy
Jose
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CEOMarketing
Jeff BezosFounder and
CEO
CEOOperations
CEO Business
Expansion
CEO Developmen
t
CEO Editorial
Warehouse Ops.Customer Service
Special OrdersCustomer Programs
AdvertisingCommunications
Strategic Relationships
Business developmentNew product &
service development
Software design,development and
maintenance
Web site designEditorial content
Book features
Corporate R&D
Corporate HQs Staff
Board of Directors
Current Organizational Structure (Multidivisional Structure)
Krunal
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Proposed Organizational Structure
Krunal
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Amazon Leadership Principles
Customer Obsession
Ownership
Invent and Simplify
Are Right, A lot
Hire and Develop the Best
Insist on the Highest Standards
Think Big
Bias for Action
Frugality
Vocally Self Critical
Earn Trust of Others
Dive Deep
Have Backbone; Disagree and Commit
Deliver Results
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What’s it like to work for Amazon?
For a Senior Manager? Employee’s are treated as absolute equal in the work place.
For an Engineer? It’s draining.
For a Warehouse Employee? White Collar sweat shop
Farhaad
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Amazon Culture Improvement Proposal
A continuous seeking of the optimal balance between flexibility and control (Work-Life Balance)
Responsibility and personal empowerment
Commitment to one’s group, the company and to one’s fellow citizens
Farhaad
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Product Positioning Map
Hig
her
Qualit
y
Lower Price
Alma
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Product Positioning Map - Proposed
Lower Price
Hig
her
Qualit
y
Alma
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What stage do you think the E-commerce market is in?
Early Majority
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Current Target Market
Shoppers
Early Majority Internet shoppers
College Students
Price conscious shoppers
Early adopters (kindle)
Sellers
Third party retailers
Online sellers
Developers
Web developers
Alma
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New Target Market
Shoppers
Late Majority and Laggard Internet Shoppers
Early Majority Internet shoppers
College Students
Price conscious shoppers
Early adopters (kindle)
Sellers
Current Low Performing Sellers
Third party retailers
Online sellers
Developers
Web developersAlma
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Balanced Score Card
Area of Objectives Target Target Deadline
Primary Responsibility
Growth•Improve sales through Amazon certification incentive
15% Increase Service Revenue
Q4 2014 Marketing
Quality•Reinforce to customers the customer-driven vision
85% positive survey
Q4 2012 Marketing/ Customer Support
Innovation •Provide an online certification program for users
Create curriculum with University of Phoenix
Q3 2013 Research & Development/Management
Consumer Confidence•Ensure customers that Amazon sellers are certified and trustworthy
75% of sellers are certified
Q4 2014 Marketing
Jeremy
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Balanced Score Card
Area of Objectives Target Target Deadline
Primary Responsibility
Growth•Improve sales through Amazon certification incentive
15% Increase Service Revenue
Q4 2014 Marketing
Quality•Reinforce to customers the customer-driven vision
85% positive survey
Q4 2012 Marketing/ Customer Support
Innovation •Provide an online certification program for users
Create curriculum with University of Phoenix
Q3 2013 Research & Development/Management
Consumer Confidence•Ensure customers that Amazon sellers are certified and trustworthy
75% of sellers are certified
Q4 2014 Marketing
Jeremy
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Conclusion
Jeremy
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Q & A
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References