1. Virginia Rosales
Anabel Juárez
Jaime Millán
Vladimir Matović
October 2010
Business Models: Themes and Issues

2. - from A to Z
Company Overview
Mission, Vision & Values
Core Value Proposition, Objective & Strategy
Three Customer Sets
Attention Economy and e-Trust
Business Model
Amazon.com Business Model Evolution
Business Model Canvas – The 9 Building Blocks
eBook/Kindle
Value Capture
Diversifying Revenue Streams
Geographical Expansion & Product Range
Amazon.com Acquisitions and Investments
Sales
Conclusion
Sky is the limit
References

3. - from A to Z
Company Overview
Mission, Vision & Values
Core Value Proposition, Objective & Strategy
Three Customer Sets
Attention Economy and e-Trust
Business Model
Amazon.com Business Model Evolution
Business Model Canvas – The 9 Building Blocks
eBook/Kindle
Value Capture
Diversifying Revenue Streams
Geographical Expansion & Product Range
Amazon.com Acquisitions and Investments
Sales
Conclusion
Sky is the limit
References

4. Company Overview
Founded in 1994
in Seattle, USA
28,300
employees
Global leader in
e-commerce
Wide range of
products
Worldwide
network of
fulfilment
Mass
customisation
Customer
experience
Affiliations Stickiness

5. • ‘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

6. • ‘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

7. Strategy
Source: www.amazon.com

8. 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

9. - from A to Z
Company Overview
Mission, Vision & Values
Core Value Proposition, Objective & Strategy
Three Customer Sets
Attention Economy and e-Trust
Business Model
Amazon.com Business Model Evolution
Business Model Canvas – The 9 Building Blocks
eBook/Kindle
Value Capture
Diversifying Revenue Streams
Geographical Expansion & Product Range
Amazon.com Acquisitions and Investments
Sales
Conclusion
Sky is the limit
References

10. - from A to Z
Company Overview
Mission, Vision & Values
Core Value Proposition, Objective & Strategy
Three Customer Sets
Attention Economy and e-Trust
Business Model
Amazon.com Business Model Evolution
Business Model Canvas – The 9 Building Blocks
eBook/Kindle
Value Capture
Diversifying Revenue Streams
Geographical Expansion & Product Range
Amazon.com Acquisitions and Investments
Sales
Conclusion
Sky is the limit
References

11. How long do you stay @ ?
Attention attraction and retention
Customer’s needs
Relevant Content
Frequent Update
Buying habits
Reactions to Web site design
Demographics
Favorite and least favorite products
HOW?
GOAL:
Brand Differentiation
Customer Loyalty
e-Trust
Quality
Value
Timeliness
Appropriateness of Goods &
Services
Business Reputation
Security in Transactions

12. 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

13. Products &
Services
Content

14. Interactivity &
Production Values

15. Personalization
Customization
Ownership &
Belonging
Co-Creation &
Recognition

16. 2
3
4
Variety
5
Speed & Delivery
1
Easy
Navigation

17. - from A to Z
Company Overview
Mission, Vision & Values
Core Value Proposition, Objective & Strategy
Three Customer Sets
Attention Economy and e-Trust
Business Model
Amazon.com Business Model Evolution
Business Model Canvas – The 9 Building Blocks
eBook/Kindle
Value Capture
Diversifying Revenue Streams
Geographical Expansion & Product Range
Amazon.com Acquisitions and Investments
Sales
Conclusion
Sky is the limit
References

18. - from A to Z
Company Overview
Mission, Vision & Values
Core Value Proposition, Objective & Strategy
Three Customer Sets
Attention Economy and e-Trust
Business Model
Amazon.com Business Model Evolution
Business Model Canvas – The 9 Building Blocks
eBook/Kindle
Value Capture
Diversifying Revenue Streams
Geographical Expansion & Product Range
Amazon.com Acquisitions and Investments
Sales
Conclusion
Sky is the limit
References

19. Auctions & zShops
eBooks/Kindle
E-commerce
Platform/
Web Services
Marketplace
OnLine Book Retailing
Partherships
&
Logistic Services
Business Model Evolution

20. Business Model Canvas
9 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)

21. MARKETING
TECHNOLOGY & 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)
FULFILMENT
COMPANIES (ONLINE
& TRADITIONAL
RETAILERS)
LOGISTICS NETWORK
PARTNERSHIPS &
ALLIANCES
DEVELOPERS
MASS-CUSTOMISED
WEB SERVICES
APIs
PORTABLE DEVICE
PRODUCT
DEVELOPMENT, AND
PROMOTION
HARDWARE
MANUFACTURERS
GLOBAL MARKET
(CONSUMERS)
LOW PRICES
CONVENIENCE
WIDE SELECTION
CUSTOMER EXPERIENCE
LOGISTIC PARTNERS
AFFILIATES
(PUBLISHERS, AUTHORS,
BOOKSTORES…)
Online RetailingAuctions & zShopsMarketplacesPartnerships and Logistic Service ProviderE-commerce Platform/Web ServiceseBooks/Kindle
COMPANIES (ONLINE
& TRADITIONAL
RETAILERS)

22. 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

23. Capture Value:
transforming earnings into profits
Capital
efficiency
Inventory
turnover
Cash
generative
cycle
Maximize Profit Dollars,
Not Margins

24. - from A to Z
Company Overview
Mission, Vision & Values
Core Value Proposition, Objective & Strategy
Three Customer Sets
Attention Economy and e-Trust
Business Model
Amazon.com Business Model Evolution
Business Model Canvas – The 9 Building Blocks
eBook/Kindle
Value Capture
Diversifying Revenue Streams
Geographical Expansion & Product Range
Amazon.com Acquisitions and Investments
Sales
Conclusion
Sky is the limit
References

25. - from A to Z
Company Overview
Mission, Vision & Values
Core Value Proposition, Objective & Strategy
Three Customer Sets
Attention Economy and e-Trust
Business Model
Amazon.com Business Model Evolution
Business Model Canvas – The 9 Building Blocks
eBook/Kindle
Value Capture
Diversifying Revenue Streams
Geographical Expansion & Product Range
Amazon.com Acquisitions and Investments
Sales
Conclusion
Sky is the limit
References

26. Source: www.amazon.com

27. Source: www.meettheboss.com

28. z
Worldwide Sales Mix
Q1 ’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

29. International Sales
$3,074
$6,740
$8,938
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
$8,000
$9,000
$10,000
2004 2005 2006 2007 2008
MM
• 2008 International sales
47% of WW sales, up from
45% in 2007
• Shipments to over 200
countries
Source: www.amazon.com

30. - from A to Z
Company Overview
Mission, Vision & Values
Core Value Proposition, Objective & Strategy
Three Customer Sets
Attention Economy and e-Trust
Business Model
Amazon.com Business Model Evolution
Business Model Canvas – The 9 Building Blocks
eBook/Kindle
Value Capture
Diversifying Revenue Streams
Geographical Expansion & Product Range
Amazon.com Acquisitions and Investments
Sales
Conclusion
Sky is the limit
References

31. - from A to Z
Company Overview
Mission, Vision & Values
Core Value Proposition, Objective & Strategy
Three Customer Sets
Attention Economy and e-Trust
Business Model
Amazon.com Business Model Evolution
Business Model Canvas – The 9 Building Blocks
eBook/Kindle
Value Capture
Diversifying Revenue Streams
Geographical Expansion & Product Range
Amazon.com Acquisitions and Investments
Sales
Conclusion
Sky is the limit
References

32. Conclusion
Evolution
• Logical path
• Resources &
Channels
• B2C, B2B
Expansion
• New markets
• Strength of Brand
• “Earth’s biggest
selection”
Attention
Economy
• Community &
Stickiness
• Trust
• Customer
Experience

33. Sky is the limit

34. Thank you!

35. 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