amazon.pptx
- 1. Case study By: Mahek Dave Himanshu Suthar Krishna Bhansali Farhan Jokhiya
- 2. ABOUT AMAZON It was founded in 1994 by Jeff Bezos, it went public in May 1997. Initially it was an online marketplace for books, It has now morphed into an Internet based enterprise that is largely focused on providing e-commerce, cloud computing and AI services. It has multiple subsidiaries including Amazon Web Services(AWS), Zoox(autonomous vehicles), Kuiper systems(satellite internet), and Amazon Lab126(hardware). 20XX Pitch deck title 2
- 3. WHAT ARE ITS STRENGTHS ? STRONG BRAND NAME Successful brand image in the market which helps maintaining a strong position. CUSTOMER ORIENTED It caters to a large number of customers for everyday needs at inexpensive prices. COST LEADERSHIP Doesn’t incur costs in maintaining physical retail stores by selling everything online. It has a strong value chain system. BRAND VALUATION Amazon is ranked at #2 position with a brand value of $249 billion dollars. DIFFERENTIATION AND INNOVATION It brings creative ideas and innovative additions to its product line like ambitious drone delivery service and withings Aura Smart Sleep System. 20XX Pitch deck title 3
- 4. WHAT ARE ITS WEAKNESSES ? EASILY IMITABLE BUSINESS MODEL Online retail businesses are quite common and are followed by rivals like Barnes & Noble, eBay, etc. LOSING MARGINS It’s free shipping to customers can be one of the reasons that expose the risks of losing margins in some markets. PRODUCT FLOP AD FAILURES Its Fire Phone’s launch in the US was a big failure while its Kindle Fire device didn’t even grow well. NDM nd 20XX Pitch deck title 4
- 5. WHAT ARE ITS OPPORTUNITIES ? PHYSICAL STORES By expanding physical stores, Amazon can improve competitiveness against big box retailers and engage customers with the brand. IMPROVEMENT To improve technological measures and organizational policies to reduce counterfeit sales. EXPANSION It can expand its operations in developing markets. M m 20XX Pitch deck title 5
- 6. WHAT ARE THE THREATS ? GOVERNMENT REGULATIONS It can threaten business of Amazon in some critical countries like Cuba, Iran, North Korea etc. CYBERCRIME Increasing cybercrimes can affect the network security system of the company. H m LINKS TO EXPLOITIVE LABOR It is one of 3 retail giants facing scrutiny from US for maintaining supply chains and labor sources associated with human rights abuses. COMPETITION Aggressive competition with big retail firms like Walmart, Target, etc. Though in India it has a kind of duopoly with Flipkart. 20XX Pitch deck title 6
- 7. PRODUCT BENEFITS Cool and stylish product Areas for community connections Online store and market swap 20XX Pitch deck title 7
- 8. AMAZON PROFIT MARGIN There are two types of profit margins on Amazon: operating, and gross. Your operating margin is how much money you can put back to the business after sales, and it includes fees and expenses. Your gross margin is similar, but counts all the fees in totality from start to finish. And when it comes to fees, these are the ones you can expect to encounter. • Seller Account Fee: This is how much you pay Amazon each month to have a Seller Account. The basic plan charges $0.99 per item sold, while the Professional version charges $39.99 for unlimited sales. • Referral Fee: Whichever category you sell in, Amazon will charge you a fee on every sale you make, which is a percentage of the product’s price. • FBA: There are tons of benefits to using FBA, but you do have to pay fees for it (monthly inventory storage fee, and fulfilment fee per unit). • Variable Closing Fee: This is how much gets charged on shipping the item and gets taken off the grand total of the sale. i
- 9. Manipulating Operational Costs to Affect Profit Margin The good (and not-so-good) part of selling on Amazon is no number ever stays the same. While it can make it tricky to 100% predict costs and margins, it does give you a tremendous amount of flexibility to affect both. Use marketing and advertising as an example. Say you decide to funnel 5% of your profits into marketing and advertising until you reach X dollars — this temporary investment might eat into your profit margins and cut it down to, say, 20%, but once your campaign is over, if it was successful, it could lead to a spike of 45% profit margins, meaning your one- time cost led to a higher profit margin over the long run.
- 10. AMAZON MARGIN HITS Most companies focus on their bottom-line earnings and profits. At Amazon, it was all about the top-line revenue story. The company believes that by increasing market share, it can eventually leverage economics of scale to lower cost. Once it has a high market share, Amazon can also exercise some pricing power over customers. Critics claim that the company must eventually start showing more profits and eventually pay dividends. Amazon may not be able to sustain its sales exuberance forever. Amazon’s operating profit margin hit 5.5% in the fourth quarter of 2020. As recently as 2014, Amazon's operating margin was actually negative. Part of the increase in the operating margin is due to the rapid growth of Amazon Web Services. Web services are generally a much higher margin business than retail, so we might expect higher profit margins going forward. The other explanation is that Amazon is
- 11. REVENUE FOR AMAZON According to Amazon's latest financial reports the company's current revenue (TTM) is $502.19 B. In 2021 the company made a revenue of $469.82 B an increase over the years 2020 revenue that were of $386.06 B. The revenue is the total amount of income that a company generates by the sale of goods or services. Amazon makes money through its retail, subscriptions, and web services, among other channels. Retail remains Amazon's primary source of revenue, with online and physical stores together accounting for the biggest share
- 12. ANNUAL REVENUE Year Revenue Change 2022 $502.19 B 6.89% 2021 $469.82 B 21.7% 2020 $386.06 B 37.62% 2019 $280.52 B 20.45% 2018 $232.88 B 30.93% 2017 $177.86 B 30.8% 2016 $135.98 B 27.08% 2015 $107.00 B 20.25% 2014 $88.98 B 19.52% 2013 $74.45 B 21.87% 2012 $61.09 B 27.07% IN 2012 Net sales were $61.09 billion, a 27.1% increase from $48.08 billion in 2011 year. North American net sales totaled $34.81 billion, up 30.4% from $26.70 billion in 2011. North America accounted for 57% of sales . Amazon revenue for the twelve months ending September 30, 2022 was $502.191B, a 9.66% increase year-over-year. In 2012 to 2022 amazon revenue increased $441.1B
- 13. HOW AMAZON GENERATES IT’S REVENUE Amazon makes money through its retail, subscriptions, and web services, among other channels. Retail remains Amazon's primary source of revenue, with online and physical stores together accounting for the biggest share. Amazon makes money through its retail, subscriptions, and web services, among other channels. Retail remains Amazon’s primary source of revenue, with online and physical stores together accounting for the biggest share. Amazon Web Services (AWS) currently generates all of Amazon’s operating profits and is growing at a robust pace. Amazon is currently facing a union vote at its warehouse in Bessemer, Ala., and may face another one starting on March 25, 2022, from employees at a facility in Staten Island.
- 14. BUSINESS MODEL THE BUSINESS MODEL OF AMAZON CONSISTS OF FOCUSING ON INVESTING IN TECHNOLOGIES, ENHANCING ITS LOGISTICS APPLICATIONS, R&D ACTIVITIES AND SECURING ITS INVENTIONS USING PATENTS. AMAZON HAS BEEN INVESTING CONSIDERABLY IN ROBOTICS AND DRONE TECHNOLOGIES FOR THE PAST DECADE. BESIDES LOGISTICS, AMAZON’S AWS IS SIGNIFICANTLY BIGGER THAN MANY OF THE BIG CORPORATIONS. AMAZON IS PROBABLY THE BIGGEST CLOUD COMPUTING COMPANY IN TERMS OF REVENUE COMPARED TO MICROSOFT. M M l 20XX Pitch deck title 14
- 15. FUNDING $14,000 Angel Investments Amount obtained through other investors $12,000 Property Revenue obtained from property rentals $32,000 Cash Liquid cash we have on hand $82,000 Shares Number of shares converted into USD 20XX Pitch deck title 15
- 16. THE FLYWHEEL MODEL • If there is one founding principle that Amazon has remained ruthlessly committed to since its genesis, it is customer centricity. • Essentially, the Amazon flywheel model is centered around price value. • Lower price structure led to more customer visits, more customers increases volume of sales and thus attracts more commission paying third party sellers to the site. • This influx of stakeholders increases Amazon’s vast and diverse product selection. 20XX Pitch deck title 16
- 17. SUMMARY • SWOT analysis • Profit Margin • Revenue • Business Model • Flywheel effect 20XX Pitch deck title 17
- 18. THANK YOU m