Young Lee Amazon Case Study BUS 550 FALL 2018
HIGHLIGHTS History Technology Organization/Management Business Challenges/Opportunities Customer Relations/Strategies Testbeds Discussion Questions HIGHLIGHTS
History Started by Jeff Bezos in 1994 Lost 3 Billion in first 7 years Started his career as a product manager in banking VP of D.E. Shaw & Co (hedge Funds) Lost 3 Billion in first 7 years Many skeptical of ever making it as a dot com Started as a online book store Fastest firm in history to reach $100 billion in sales. History
Technology Ecommerce Free shipping to members Largest Online Retailer Little store front Free shipping to members Largest Online Retailer Use of Kiva Kindle, Kindle Fire Fire TV Echo Trunk delivery Blue Origin Cloud Computing Amazon Web Services (AWS) Technology
Organization/Operations Low prices, Faster delivery, Vast selection. Amazon focused on costs, data, and processes Efficient cash conversion cycle Wait to the last minute to pay Amazon spent $21.7 Billion in shipping cost Spend a lot of time studying logistics Challenging the shipping industry Allow other vendors to use Amazon as a “storefront” Huge pricing power Large investment into technology Organization/Operations
Challenges and opportunities Stiff eCommerce competition Walmart with Ecommerce Competiton in TV market Netflix Apple TV Roku Groceries has not figure out the right formula Cell phone flop Channel conflict Fighting publishers and Apple Different charging method Growing Content publishing AWS growing market “While e-commerce brings in the most in terms of sales revenue, AWS is now responsible for the majority of the firm’s profits.” Echo and IOT Campus bookstores Personal storage Challenges and opportunities
Customer Metrics/ Strategies Huge data on data from its customers Algorithms to study buying Target marketing Customer Metrics/ Strategies
Testbeds Amazon Go Bookstores no cash Own shipping company Drone shipping on the last mile Testbeds
Discussion Can Amazon survive at the top Is Amazon making enemies Too much focus on technology User data :manipulation or free game Discussion
How many years did it take for Amazon to be profitable? Question?