Industrial analysis of Amazon.com as per 2017.

1. E-commerce industry

2. Introduction
E-COMMERCE INDUSTRY
•Evolution during 1991.
•Ecommerce transaction in 2017 is 667 billion
dollars
•Major players are flipkart, amazon, Snapdeal,
Paytm
•Contributes 0.2% towards GDP in 2017
Segment Breakup
•Travel agencies-71%
•Retail and market place-20%
•Financial services-5%
•Classifieds-4%
AMAZON
Overview
•Headquartered at Seattle, Washington
•America’s largest online retailer
•Products are electronics, clothing, accessories,
books etc
•Net revenue in 2017- 177866 million dollars
•Net income-3.03 billion dollars
•Return on assets-2.3%
•Return on equity-28.37%
•Competitive advantage- rapid delivery and
diminished shipping costs, amazon prime, kindle,
amazon drone

3. MARKET SHARE IN INDIA
FIRM 2015 2016
AMAZON 14% 22%
FLIPKART 43% 37%
SNAPDEAL 19% 15%

4. Porter’s 5 forces

5. Competitive rivalry or competition (strong
force)
•High aggressiveness of firms (strong force)
•High availability of substitutes (strong force)
•Low switching costs (strong force)
•The competitors of Amazon are eBay, Alibaba, Flipkart

6. Bargaining Power of Amazon’s
Customers/Buyers (Strong Force)
•High quality of information (strong force)
•Low switching costs (strong force)
•High availability of substitutes (strong force)

7. Bargaining Power of Amazon’s Suppliers
(Moderate Force)
•Small population of suppliers (strong force)
•Moderate forward integration (moderate force)
•Moderate size of suppliers (moderate force)
Some of the core areas that are Amazon’s focus in terms of supplier relationships are as
follows:
•Health and safety in production areas and any living quarters
•The right to legal wages and benefits
•Appropriate working hours and overtime pay
•Prevention of child labor or forced labor
•Fair and ethical treatment, including non-discrimination

8. Threat of Substitutes or Substitution
(Strong Force)
•Low switching costs (strong force)
•High availability of substitutes (strong force)
•Low cost of substitutes (strong force)
The only major competitive advantage of Amazon is its excellent customer service apart from its
brand name. The customers can easily switch from one brand to another.

9. Threat of New Entrants or New Entry
(Weak Force)
•Low switching costs (strong force)
•High cost of brand development (weak force)
•High economies of scale (weak force)

10. Amazon Strategy and Positioning
Strategic Position
Cost leadership
Customer differentiation
Focus Strategies

11. Strategic Position
Amazon has been able to maintain sustainable competitive advantage based on three
operational strategies. These are low cost-leadership, customer differentiation and focus
strategies.
Low cost-leadership is pursued by Amazon by differentiating itself primarily on the basis of price.
We believe that offering low prices to our customers is fundamental to our future success.
Customer differentiation strategy, Amazon provides current and prospective customers with
differentiation through design, quality or convenience by selecting a strategy that is different
among the competitors.
The focus strategy takes one of the two other strategies and applies it to a niche within the
market Based on this, Amazon focuses on outstanding customer service as a niche but not the
whole market because each niche has its own demand and requirement.

12. Resources based view
Amazon successfully identified the right resources and developed its capabilities in key target areas.
These investments resulted in:
Sophisticated online retailing technologies

Personalization features for customers on its websites

Reliable and easily scalable IT systems all one platform

New products (100 different products in seven major geographic markets)

Top customer relationship system

State of the art warehousing

13. Amazon’s investments are paying off .
Their net sales continue to grow, their cost of goods decreases as % of sales and
their net income continues to increase.
They continue to invest in initiatives that provide them a longer-term
competitive advantage.
Amazon’s supply chain management is their core competency which includes
customer relationship , supplier relationship management , internal supply chain
management and also technology.

14. Amazon’s Strategic Steps
SCENARIOS
•Increased competition from major players like
flipkart, eBay, jabong etc.
•Amazon is relatively weak at what e-
commerce types call discovery. E.g.-spring app
•Amazon does not have the power to point
customers towards purchases on mobile
services like Apple and google.
•eBooks startups like Oyster(Netflix service),
BookLamp acquired by Apple became a
competition for Amazon.
•Companies like Square are a threat.
STRATEGY
•amazon’s biggest strength is its size and
idiosyncratic structure; it’s a platform
company.
•Amazon is fighting the weakness with speed.
•Amazon released a phone of its own called the
Fire which is a success.
•Amazon came up with Kindle which is
reportedly account for 6 out of 10 e-book
sales.
•Amazon Local Register, a point of sale app that
replaces cash registers and credit card
processors for small businesses.

15. Future projects of amazon
Amazon will continue to improve the IT services related the e-commerce and supply chain
management. The areas of future development include:
•Amazon Elastic Compute Cloud
Amazon Elastic Compute Cloud (Amazon EC2) is a web service that provides resizable compute
capacity in the cloud. It is designed to make web-scale computing easier for developers.
•Amazon S3 Storage
Amazon S3 provides a simple web services interface that can be used to store and retrieve any
amount of data, at any time, from anywhere on the web. It gives any developer access to the
same highly scalable, reliable, fast, inexpensive data storage infrastructure that Amazon uses to
run its own global network of web sites. The service aims to maximize benefits of scale and to
pass those benefits on to developers.

16. •Amazon Cloud Front
Amazon Cloud Front is a web service for content delivery. It integrates with other Amazon Web
Services to give developers and businesses an easy way to distribute content to end users with
low latency, high data transfer speeds, and no commitments.
•Amazon Fulfilment Web Service
Amazon Fulfilment Web Service (Amazon FWS) allows merchants to access Amazon's world-class
fulfilment capabilities through a simple web services interface. Merchants can programmatically
send order information to Amazon with instructions to physically fulfil customer orders on their
behalf.
Amazon continues to develop the IT systems related to the support of the Kindle e-book reader.
In particular the online Kindle Book Store and the related "Whisper net'" wireless distribution
network.

17. REFERENCES
•www.snapagency.com
•www.statista.com
•www.amazon.com

18. THANK YOU