By Peter Moua Bus 550 The Contemporary Firm Short History Founded by Jeff Bezos in 1994 Recognized web usage was growing at 2300 a year He sought to find the first best product to sell online ID: 147367
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Slide1
Marching Towards Profitability
By Peter Moua
Bus 550
The Contemporary FirmSlide2
Short HistoryFounded by Jeff Bezos in 1994
Recognized web usage was growing at 2,300% a year. He sought to find the first best product to sell online.“Books”
Amazon opened its online bookstore in July 1995
Amazon went public on May 15, 1997 sold 3 million shares at $18 per share Slide3
Trivia Question
What was Amazon.com’s original name?Slide4
Trivia Question
CadabraSlide5
Customer ValueFocused on Customer’s online experience
: Features: “1-Click”: Fast/Secure credit card processing
easy and rich merchandise evaluation: pictures, descriptions, and reviews
Amazon Personalization: “build the right store for every customer”
recognize, remember, and learn
Branding:
e-commerce and customer satisfaction.Slide6
FulfillmentMinimum of Bricks:
Minimal Inventory and rapid fulfillment Automated interfaces for sorting and organizing ordersHow it
was done:Randomly processed and stored, Hand picked, Hand packed, and shipped. How it is done now:
Amazon
Acquired Kiva Systems for $
775MSlide7
Amazon PrimeCurrently around 10 million members enrolled
Results in about 1/3 of Amazon’s operating incomeRecently increased annual fee from $79 to $99
Prime benefits:Unlimited free two-day shipping on eligible purchases (20 million items are in the prime category)Unlimited streaming with Prime instant video
Ability to borrow books from the Kindle owners’ lending librarySlide8
Vision to improve upon the physical book.In October 2004 a small team moved into a shared space in Palo Alto law library and got to work as Lab126.
The Lab126 name originated from the arrow in the Amazon logo.
On November 19, first Kindle e-reader launched with 90,000 e-books. 5.5 hours later, Kindle was sold
out after 5.5 hours of its announcement.
The team has expanded
to products like the Kindle
Keyboard, Kindle Touch and Kindle
Paperwhite e-readers to Kindle Fire tablets. Slide9
Electronics from Lab1262007 - Amazon Kindle E-book
Reader: Reads like paper with no glare, even in bright
sunlight. Current versions: Kindle, Paperwhite,
Paperwite 3G, and DX
2011 - Kindle Fire Table Computer:
Runs Fire OS 3.0 “Mojito”. Current versions: Fire HD, HDX, HD 8.9”, Fire HDX 8.9”
2014 - Amazon Fire TV
: enables television sets to access internet programing, streaming shows from Amazon Prime, and video games. Features voice recognition on the remote and a gaming controller can be purchased.
Smartphone rumor:
6 camera across the face
to enable 3D images and ability to
use gestures for the OS. Projected
to release this year.Slide10
Electronics from Lab126Slide11
PatentsAs of 2013, Amazon has 1,263 Patents.
Examples:Affiliates Program: Allows owners of other Web sites to refer customers to Amazon in exchange for a referral fee.
1-Click: allows customers to shop without entering their shipping and billing information every time they purchase an item. Build-a-box: cranks out custom-designed boxes for odd-shaped shipments.
Anticipatory Shipping: Uses historical data to predict what a customer will buy next. Amazon would pre-ship the item in advance in anticipation that the customer will buy it.Slide12
Acquisitions & Investments
Company
Date
Company
Date
Company
Date
Bookpages
April 27, 1998
Leep Technology Inc.
Dec. 1999
Animoto
May 2008
Telebook
April 27, 1998
Greenlight.com
Jan. 2000
Farbric.com
June 2008
Internet Movie Database (IMDB)
April 27, 1998
GregManning
Feb. 2000
Box Office Mojo
July 2008
Sage Enterprises (Planet All)
Aug. 4, 1998
Basis Tech.
Feb. 2000
Engine Yard Inc.
July 2008
Junglee Corporation
Aug. 4, 1998
kozmo.com
March 2000
Elastra Corp
Aug. 2008
Drugstore.com
Feb. 1999
WineShopper.com
April 1, 2000
Shelfari
Aug. 2008
Geoworks
Feb. 1999
audible.com
Jan. 2000
Reflexive Entertainment Inc.
Oct. 2008
pets.com
March 29, 1999
Catalogcity.com
Nov. 2001
AbeBooks.com
Dec. 2008
LiveBid.com
April 24, 1999
Egghead.com
Dec. 2001
Justbooks
Dec. 2008
bibliofind
April 24, 1999
OurHous.com
Dec. 2001
IberLibro.com
Dec. 2008
MusicFile
April 24, 1999
CDNow
Dec. 2002
Bookfiner.com
Dec. 2008
exchange.com
April 24, 1999
joyo.com
Aug. 2004
Gojaba.com
Dec. 2008
Alexa Internet
April 26, 1999
BookSurge
Apr. 2005
FillZ
Dec. 2008
Accept.com
April 25, 1999
Mobipocket.com
Apr. 2005
LibraryThing
Dec. 2008
HomeGrocer.com
May 18, 1999
CustomFlix
June 2005
Chrislands
Dec. 2008
Gear.com
July 14, 1999
Shopbop.com
Feb. 2006
Yieldex
Feb. 2009
Tool Crib of the North
Oct. 1999
wikia Inc.
Dec. 2006
Lexcycle Inc.
Apr. 2009
Convergence Corporation
Oct. 1999
Dpreview.com
May 2007
BookTour.com
Apr. 2009
MindCorps
1999
Brilliance Audio
May 2007
Foodista
May. 2009
Della.com
Nov. 1999
Amie Street
Aug. 2007
Talk Market Inc.
Jun. 2009
Back to Basics Toys
Nov. 1999
withoutabox
Jan. 2008
Snap Tell Inc.
Jun. 2009
Ashford.com
Dec. 1999
Lovefilm.com
Apr. 2008
Zappos.com
July 1, 2009Slide13
Financials53-week high $408.06
1st Quarter revenue grew 23% over the year to $19.74 Billion
EPS of $0.23Slide14
Financials ContinueWhy the down slope?
Amazon focuses on long-term competitive advantage Capital Expenditures in infrastructure
Innovation SpendingTherefore Amazon continues to operate with negative Operating Income.
Spent $1.1 billion on additionalinvestments to support technology
i
nfrastructure including Amazon Web
Service, and fulfillment operations.
Amazon is investing more than they
did in the past. Domestically and internationally. Recent investmentsItaly and Spain and continued in
China. Slide15
Marching Towards ProfitabilityConclusion:
Currently not profitable because they are spending more than their profitsInfrastructureInnovation
Focuses on long-term competitive advantageContinue to grow at a fast paceNew technologies
Fire TVSmartphone
International Growth
Austria, Canada, China, France, Germany, Italy, Japan, Spain, UKSlide16
Multiple Choice Questions
How much did Amazon’s 2014 1st quarter revenue grow from the previous quarter?8%17%
23%31%What robotic company did Amazon acquire to improve the customer fulfillment process?
AeroViroment
Kiva Systems
iRobot
The Robot Company
You can play videogames on the new Amazon Fire TV.
TrueFalseSlide17
Works SitedByers, Ann (2006),
Jeff Bezos: the founder of Amazon.com, The Rosen Publishing Group, pp. 46–47 Himelson, Jeffrey (2014), Amazon: Impatient Investors Are Giving You A Golden Opportunity; http://seekingalpha.com/article/2178773-amazon-impatient-investors-are-giving-you-a-golden-opportunity
Lab126 (2014), http://www.lab126.com/welcome.htmAnders, George (2013), Amazon’s 1,263 Patents Reveal Retailing’s High-Tech Future; http://www.forbes.com/sites/georgeanders/2013/11/14/amazons-1263-patents-reveal-retailings-high-tech-future/
Lomas, Natasha (2014), Amazon Patents “Anticipatory” Shipping – to Start Sending Stuff Before You’ve Bought It”; http://techcrunch.com/2014/01/18/amazon-pre-ships/
Slawski
, Bill (2009), Amazon Acquisitions and Investments;
http
://www.seobythesea.com/2006/10/amazon-acquisitions-and-investments/