Analysis PDF

Amazon.com, Inc.
: a case study analysis

Reid M. Berryman
reid.m.berryman@wmich.edu
School of Communication
Western Michigan University
ABSTRACT: This paper is a case study analysis of Amazon.com, Inc. (Amazon). In this paper, I look at the business strategy of
Amazon. Special attention is given to five parts, including a historical overview, organizational structure, business operations,
financial performance, and the future outlook of Amazon. The historical overview chronologically describes landmark events of
Amazons beginnings to their current position today. The companies departmental structure is categorized and briefly commented
on in section two. An analysis is provided for Amazons operations with a breakdown of major products and services offered. A
comprehensive financial analysis of Amazon follows (section four) with matching insight that links performance to events and
business strategies. The future outlook of Amazon is discussed last, offering a topical overview of where Amazons business
interest is shifting.
KEYWORDS: Cloud computing, Computational advertising, E-book readers, Electronic commerce, Multimedia content
creation, Multimedia streaming, Personalization, Recommender systems, Tablet computers, Web services.
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ITERA 2014, The 12 Annual Conference on Telecommunications and Information Technology, 4 April -6 April 2014, Louisville, Kentucky.
I. HISTORICAL OVERVIEW
In the early 1990s, the dot-com boom drastically changed the landscape of communications, business and culture with no signs
of regression. For new businesses, effective innovation offered great potential through the World Wide Web. Growing popularity
of Internet access created an inspiring logistical niche later popularized as E-commerce, proving to be a successful means of
purchasing products through the Internet. Jeff Bezos, founder of Amazon.com, Inc. (Amazon) was the first to profitably innovate
in this emerging market, and has become the worlds largest online retailor.1 Bezos realized the opportunity presented by
the web revolution, whereas becoming an established industry leader was the only means to long-term profitability. In 1994,
Bezos left his vice-president position at D. E. Shaw, a Wall Street firm, to move forward with his business idea that would soon
become Amazon.com.2 Before the end of 1994, Jeff Bezos incorporated his book e-commerce company as Cadabra.3 Later,
Bezos rebranded the company as Amazon for two distinct reasons: The alphabetical advantage when listed in directories and
metaphorically representing the Amazon River in terms of the companys size. Piloted right out of Bezoss garage, Amazon
became an instant success and soon acquired a warehouse for continued operations. Bezos planned his supply chain strategically
from day one, placing the company headquarters in Seattle near a large book distributor in Oregon.4 An illustration of his original
homepage in 1994 can be viewed in Figure 1. listed below.
Figure 1.
Amazon.com Home Page (1994)
Source: Telco2.net 2014
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1.1 Early Growth & Mission

By 1995, Amazon quickly became the worlds top online book selling website. Two popular web portals (Yahoo! and Netscape)
placed it in their featured website lists.6 Two business practices correlated with Amazons immediate scalable success, it was
capable of adjusting to rapid demand of products while maintaining satisfied customers. Amazons mission statement still reflects
these core concepts today:
To be Earths most customer-centric company, where customers can find and discover anything they might
want to buy online, and endeavors to offer its customers the lowest possible prices.7
Amazon created a supply chain based on wholesale relationships for inventory it did not have, acting as the middleman in the
shipping process because it still only had its Seattle warehouse. With this logistical design, Bezos was able to ship to over 50
states and 45 countries in July of 1995.8 Bezoss bachelor degree in computer science and electrical engineering from Princeton
(1986) provided him insight to the interface, information systems and database capabilities Amazon relied on.9 Leveraging these
three technically competitive factors allowed customers to easily find the books they needed and simplified the purchasing
process. He sought balance between capability, performance and low operations cost in the selling and delivery of books. This is
supplemented by their customer-oriented culture; not just a necessary task but also a value they believe makes Amazon
profitable. According to Bezos Customer focus is a cultural issue and he expresses it as a differentiator for Amazon.10
When they're in the shower in the morning, they're thinking about how they're going to get ahead of one of
their top competitorsHere in the shower, we're thinking about how we are going to invent something on
behalf of a customer.11
When Amazon releases a new service, its directed at innovating within their current customer base or exploiting the market for
new ones. In July of 1996, they launched their Associates program, allowing independent websites to receive commission
revenue at 3-8% per sale. Specifically, this was performed by inline linking to Amazon titles and was one of their first vertically
integrated moves.12 The dynamic reach that individual sellers could achieve at the niche level produced a great revenue source for
Amazon. The success of this program took hold in 1997, when large companies at the time such as Yahoo! and America Online
became the top grossing associates in the program.13
1.2 Amazons IPO

Amazon became a public company in May of 1997 with an initial public offering (IPO) of three million shares of common
stock.14 The IPO provided growth funding to develop their distribution capabilities and website features. The companys
investment activities were heavily scrutinized. Analysts were doubtful regarding the companys ability to produce a return on
investment. Bezos explained the companys goals in his first letter to shareholders in 1997:
Our goal remains to continue to solidify and extend our brand and customer base. This requires sustained
investment in systems and infrastructure to support outstanding customer convenience, selection, and service
while we grow.15
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By 1998, Amazon was fast becoming one of the worlds leading Internet startups. They conducted business with over one and
half million customers, reaching both the United States and 160 countries.16 This outreach made them the third largest bookseller
in the U.S. without the brick and mortar presence its competitors had (Barnes & Noble and Borders).17 Outstanding success as an
e-commerce bookseller influenced the development of new services, products and additional markets to enter. Amazon acquired
the Internet Movie Database (IMDB) in April of 1998, purchasing their way into the online media market.18 Bezos realized
IMDBs capability to vertically integrate as an information asset. IMDB aligned with his vision of distributing media and
entertainment products, made evident when he promoted movie sales through it shortly after the acquisition.19 Two other
acquisitions in 1998 eliminated potential competitors in the book e-commerce industry. Bookpages and Telebook based in
the United Kingdom and Germany were acquired for a total of $55 million. This decision was Amazons first transnational
horizontal growth, adapting their business model to cultures that valued different books than their domestic consumers.20
1.3 From Growth to Regression

In 1999, Amazon hit a strategic barrier where they were unable to simply acquire the competition as in the past. Amazon
Auctions was released to compete with the growing consumer-to-consumer auction website eBay.21 Unfortunately, replicating
auction style purchasing on Amazons e-commerce platform proved ineffective. Instead, it evolved into a differentiated product
called Amazon Marketplace that took better advantage of Amazons platform. Amazon Marketplace allowed customers to
compete with prices Amazon offered, which developed a win-win solution.22 Jeff Bezos soon emerged as a celebrity CEO and
was titled Time Magazines Person of the Year in 1999.23 Bezos made aggressive executive decisions with positive outcomes,
which increased his individual fame and significantly shaped the culture Amazon represents today.24 As the dot-com bust
approached, it affected the stock price between 2000-2002, marking the companys first regressive business decisions. Bezos
rationalized the short-term stock sink between these years and reassured shareholders it was a result of temporary causes. Bezos
stated with confident and now proven accuracy:
So, if the company is better positioned today than it was a year ago, why is the stock price so much lower
than it was a year ago? As the famed investor Benjamin Graham said, in the short term, the stock market is
a voting machine; in the long term, its a weighing machine. Clearly there was a lot of voting going on in
the boom year of 99and much less weighing.25
1.4 Dot-com Survival & Returning Patterns
Amazon posted a $3 million first quarter net profit in 2002, signifying the end of its internal recession. Operating as a lean cost
cutting corporate culture led to their first annual profit in 2003 at $35.3 million.26 Stable financial growth soon followed and
maintaining profitability these years rebooted Amazons business strategy of acquisitions and innovations. In 2005, the debut of
the still popularized service Amazon Prime, a shipping club arrived.27 Shipping time was a decision criterion customers used
when evaluating online ordering, and Amazon Prime wanted to close this gap, experiencing profitability with the service soon
after.28 Amazon had now expanded their product categories far beyond books, offering apparel and electronics since the early
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2000s. Amazon was also making heavy investments in technology to become a differentiator in digital services, cutting its
operating margin to 4.1% in 2005.29 This worried investors in spite of Bezoss explanations; Wall Street analysts such as Steve
Weinstein at Pacific Crest Securities reflected the concerns of many regarding Amazons strategy:
I was impressed with the revenue acceleration, but the margins are a sticky point. Its just not clear theyre
getting the return on their investments.30
In alignment with Amazons technical investments, they prepared the legal side of their online video content network they hoped
to grow by purchasing distribution rights from NBC and other networks.31 Amazon then became an entrant into this new market
through their video and media digital delivery or video-on-demand (VoD) services.32 Prior investments in technical infrastructure
made Amazons charge into digital services a next step in Bezoss vision. On August 25th 2006, Amazon publically announced
their entry into the computational services industry.33 EC2 (Elastic Compute Cloud) was a revolutionary service that took true
advantage of Amazons scale of operations and their geographical placement. They were the first to offer cloud computing power
in an easy to purchase, incremental model, dynamically scaling to client needs. This declared Amazons successful entry as a
technology services provider, still showing growth in 2013.
Amazon pushed investments into hardware development, an area they had yet to conquer and released their first
hardware device in 2007 called the Kindle, selling out almost instantly.34 Placing a handheld e-book reader in customer hands
made the purchasing process much more natural. In 2009, continued success of their e-book selection, the Kindle, and growing
exchange efficiencies led to the announcement they had sold more digital books than printed ones.35 They unveiled Amazon
Prime Instant Video which in 2011 became a direct competitor with Netflix and Hulu streaming services.36 Amazon also made
strategic licensing contracts between 2011-2012 with Disney-ABC, 20th Century Fox, West Discovery Communications, PBS
Distribution, and NBC-Universal Cable & New Media Distribution, positioning them well for online video delivery.37
Amazon continued expanding its distribution centers around the globe in China, France, and India continuing to grow
diversity in their product line.38 Bezos and Amazon remained fiercely competitive and innovative through an industry bust as
well as a global financial crisis. This was not by chance and instead an example of highly successful long term strategic planning
with rational reactions as unpredictable events emerged.
II. ORGANIZATIONAL STRUCTURE

Amazon has developed the industry reputation for being an everything store.39 Their product diversity continues to grow
through acquisitions of successful competitors and innovations into new niche markets.40 Headquartered in Seattle, Washington,
Amazon operates on a global scale. Beyond the corporate offices, their fulfillment, customer service, data, and software
development centers are located in many countries. Amazons products, services, and divisions are vertically integrated to create
internal synergies so departmental names and structure are dynamic and change often. Table 1 displays the nine divisions that
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make up Amazon, Inc. An aggregate table from varying sources with a detailed breakdown by individual services and products
can be seen in Appendix 1.
Table 1.
Amazon.com, Inc.s organizational chart (Oct 2013)
North America and

International Retail

Seller Services
Finance and Administration
Digital
Legal
Human Resources
Amazon Web Services
Worldwide Operations and

Customer Service
E-Commerce Platform
Source: Amazon.com, Inc. 2013
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III. BUSINESS OPERATIONS
3.1 Business Philosophy

Amazon communicates its business and operating philosophy through the vision of its CEO Jeff Bezos. Their mission statement
loosely defines the products and services Amazon sells, instead discussing customer service as being critical to their success.42 As
a result, its clear Amazon does not prefer to label itself as the seller or producer of any one product or service. First, Amazon
recognizes markets they can compete for customers in that are underserved by existing competitors. Secondly, Amazon
strategically innovates by developing new markets through improved delivery methods or synergetic combinations of other
strategic business units.43 Each market venture always ties back into their distribution and logistical capabilities, clearly
represented in their most profitable products and services.
3.2 Aggressive Entrepreneurial Culture

Amazon takes a proactive approach to external market pressures, avoiding forced reactions to competitors and management by
crisis. Jeff Bezos states Amazon is internally driven to improve our services.44 Their market view is aggregated through their
own customers reactions and displays the entrepreneurial orientation of Amazon, When were at our best, we dont wait for
external pressures.45 Smaller competitors in an industry can get away with mimicking competition for a profitable share; being a
successful industry leader means creating the forces others firms react to.
3.3 Current Products

While Amazon continues to grow each year, the company remains focused on the business of E-commerce. Amazon began as a
technology and database oriented company moving physical product, but has since transformed its business model as physical
products are widely converted to digital content (Books, DVDs, Web Services). Amazon has consistently reinvested its profits
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in new technological development, a financial strategy that caused great concern in the early 2000s. The negative speculation of
this strategy has been widely dropped, although Bezos refuses to leave it unaddressed:
Our heavy investments in Prime, AWS, Kindle, digital media, and customer experience in general strike
some as too generous, shareholder indifferent, or even at odds with being a for-profit company.46
Bezos wants investors to take a long-term view toward growth and development. This approach has not always been well
received by outside investors.47
3.3.1 Retail Website and E-Commerce

Amazons retail service focuses on more types of products, more conveniently and at lower prices.48 Their retail sales and
distribution vertically integrate with all other products offered (both digital and physical). Through their e-commerce platform,
they empower the consumer with tools to research and comparison shop. When the decision to purchase is made, they make the
process as easy, cost effective and satisfying for the consumer as possible.
3.3.2 Amazon Web Services (AWS) [2006]
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Amazon focuses on attracting developer customers, through selling cloud infrastructure services hosted at Amazons data
centers50. Amazon is able to subsidize its own data and processing requirements by turning whats normally a cost center into a
profitable division. Amazons ability to successfully scale and manage large projects has placed them as the market leader in
cloud computing services.51
3.3.3 Digital Media Delivery [2006]

Amazon offers a variety of digital content delivery services (Amazon Instant Video September 2006, Amazon MP3 September
2007, and the Kindle Store November 2007).52 Amazon Instant Video has distribution rights from three major mainstream
broadcasting networks (CBS, NBC, and FOX) in addition to agreements with smaller broadcasting networks.53 Amazon MP3
differentiates its platform from competitors by offering downloads with no Digital Rights Management (DRM).54 The Kindle
store sells content designed for the Kindle platform. E-books are the primary digital product sold, but shared content between the
aforementioned media services exist as well.
3.3.4 The Kindle [2007]

Amazons fulfillment of their customer centric mission was shown through the development of their Kindle e-reader in 2007,
incorporating every leading philosophy the company stands for. Amazons strategy reached beyond the product itself, stating that
roughly breakeven prices was their goal. 55 Profitability came from the content delivery system and purchasing ability placed in
consumer hands. Amazons vision of becoming a digital content distributor primarily evolved from the Kindles operating strategy,
disruptively innovating the e-book industry:
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We want to make money when people use our devices not when people buy our devices 56
Many versions have existed since the original, developing into two distinct device product lines based on hardware and
operating systems. The E-Ink and Android devices fully integrate with Amazons e-book distribution services while the
Android models add additional media capabilities.57
IV. FINANCIAL PERFORMANCE

Amazons financial performance is evaluated differently than most corporations of their size. From Amazons perspective, the
most accurate measure for evaluating the company is a Non-GAAP measure of free cash flow.58 Improvements in free cash flow
occur by increasing operating income and managing working capital owned.59 This measure has regularly decreased from its peak
in 2009 at $2.92 billion to $395 million ending the fiscal year of 2012. 60 Amazon stated this measure is volatile to working
capital, the timing and magnitude of capital expenditures, and our net income.61 Table 3 is a consolidated financial statement
representing GAAP financial metrics in addition to free cash flow statements. Amazon experienced yearly increases in Net sales
from $24,509 billion in 2009 to $61,093 billion in 2012. Regular capital expenditure increases are present in each year as well,
remaining consistent with previous investment statements from Bezos.62 Amazon began reporting decreasing Net income since
2010 leading up to a loss of $39 million in 2012. Their third quarterly report in September of 2013 showed an increase from
second quarter results, going up to $34 million of Net income, reversing their downward trend.63
Table 3
Amazon.com, Inc.s 2012 annual report

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Owners of Amazon stock have never received dividend payments, Jeff Bezos believes in keeping all future earnings to finance
future growth.65 Amazon is known for its thin operating margin, a warning indicator of profitability problems to most
financial analysts. Sustained investments in technology and capacity growth explain this thin margin, while representing the past
three years declining Net profit.66. Despite financial analyst norms, Amazon has received a steadily increasing valuation per share
reporting a high of $373.49 on November 18th 2013 up from $131.41 on November 18th 2009.67 Slate magazines economics
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correspondent Matthew Yglesias sarcastically summarizes this financial strategy:

Amazon, as best I can tell, is a charitable organization being run by elements of the investment community
for the benefit of consumers.68
Amazon operates in two different segments, North America and International, with sales divided into Media, Electronics and
other General Merchandise, and Other.69 Representative of their Net sales increases; they show growth in both segments and in
every division. Amazon discloses their Other services line item as representing AWS sales.70 Table 4 displays the past three
annual financial reports by segment.
Table 4
Amazon.com, Inc.s 2012 annual report

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V. FUTURE OUTLOOK
Amazons history with capital purchasing and other heavy investment actions resonates through the company as justification for
lean operations. They are driven by a culture of expansion and growth, in addition to continuous innovation and lean
management of the capital they purchase. Amazons presence in the marketplace is a strong force felt by many firms across
multiple industries.
5.1 From Packages to Packets

Amazon continues to generate most of its revenues from the sale and distribution of retail products. Although, the Amazon Web
Services (AWS) division is experiencing faster growth in comparison to its retail counterpart. Greater development in their
computing capacity infrastructure is expected, and continued leasing of their computing infrastructure is suited to follow.
Amazon was the first company to pioneer cloud computing under a successful business model, whereas large media distributors
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such as Netflix rely on purchasing their capacity.72 This puts Amazon in a unique dichotomy, as their Prime Instant Video
service was created to enter the market of digital video delivery.73 Bezos explained the situation well at his AWS talk in 2012:
We may compete on Prime Instant Video, but we bust our butts every day for Netflix on the AWS side.74
Senior Vice President of Amazon, Andy Jassy, made it evident at the 2013 AWS re:Invent conference that much greater market
potential exists in this area of services:
Jeff is very excited about the AWS business and he believes - like the rest of the leadership team does that
in the fullness of time- it is very possible that AWS could be the biggest business at Amazon.75
The transition from physical delivery to digital delivery is a point of change in the history of distribution and logistics. Amazon
had the advantage of being somewhere in between with its original book delivery service, competing with brick and mortar
stores. Now it aims to make the transport of processed data an even larger revenue source in the future for the company.
5.2 A Change Catalyst for the Marketplace

Amazon views its core and subsidiary businesses as constant engineering problems, where improvement from even the smallest
incremental projects is welcomed.76 Consumer behavior studies in addition to numerous patents have been filed by Amazon to
make online purchasing faster, safer and more likely to occur through them.77 This differentiated competency makes them a
change catalyst in the way consumers react to the singularity experienced between physical and digital products. This is achieved
by operating in businesses they can synergize and vertically integrate into the rest of their company. Amazon discussed numerous
services and products in their 2013 third quarter letter that displayed this strategy well. One of their services, Kindle
MatchBook aims to enhance Amazons already growing e-book market. The service allows consumers to buy e-books for print
books previously purchased through Amazon at a discounted rate for less than $3.78 This further represents their customer centric
model, rewarding consumers who purchased from Amazon in the past. An outlined goal is that it will convert even more of their
print book customers into Kindle users. Amazon will continue to move forward by offering the widest array of digital content,
just as it offers the largest selection of retail goods. By obtaining digital content rights from media suppliers, they plan to offer the
most diverse media selection available to customers at the lowest cost. Using backward vertical integration, Amazon even
announced the development of their own in-house original broadcasted shows.79
Amazon has shown drastic growth and differentiation since its original position as an online book retailor in terms of
the products and services they provide. Their primary strategy is to always maintain focus on customer-centricity, innovating and
adding value for registered customers. This has proven to be an effective core competency in the marketplace, knowing that once
you are a customer the relationship brings benefits long after a purchase.
Amazon faces great competitive forces in reaction to their innovation and fast growth. Patent infringement claims have
become a regular occurrence for their legal department, in addition to new potential taxation laws that could affect their overall
revenue.80 These legal and political threats become financial threats to a company that operates on thin margins. Operating lean in
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lieu of these forces calls for innovations in cost restructuring, especially because Amazon has little control on the source of these
threats and claims.
Amazon will continue to enter new markets with products and services, but also create new ones through related
diversification of subsidiaries in its highly vertically integrated structure. The future holds great potential for Amazon in
becoming the greatest distributor of digital content. How they leverage this ability could produce competitive forces previously
unheard of, especially in fragmented markets with no clear leader. Amazon announced in December of 2013 a plan to offer flying
drone delivery, enabling even more control over their value chain.81 Gopago, a point of sale company was also acquired,
indicating Amazons interest in payment processing.82 This innovation and acquisition represent their business philosophy,
closing in and controlling both ends of the value chain. In doing so, Amazon can control cost, customer experience and increase
profits through the long tail of their diverse product and service offerings.
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Appendix 1.
83
Amazon.com, Inc.s extended organizational chart (Oct. 2013)

Sports and outdoors:

Exercise and fitness e quipment
Outdoor recreation
Hunting and fishing

Cycling
Athletic and outdoor clothing
Team sports

Golf
Boating and water sports

Fan shop
All sports and outdoors

Seller Services

Web services
Order fulfillment

Marketing and promotional services, i ncluding online advertising
Co-branded credit cards

Finance and Administration
financial processes a nd controls
financial reporting and accounting practices

facilities management
administrative functions

Human Resources

Recruiters

Specialists
HR Business Partners

Learning & Development
Human Resource Information
Systems

Compensation & Benefits

Publishing
Amazon Publishing
Authors

Musicians

Filmmakers
App Developers

Kindle Direct Publishing

Independent Authors

Grocery, health and beauty:
Toys, kids and baby:
Movies, music and games:
Grocery and gourmet food

Wine
Natural and organic food
Health and personal care products
Beauty products
Toys and games

Bay products
Clothing (kids and baby)
Video games for kids
Movies
Blu-ray
Musical i nstruments
Video games
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Electronics and computers:
Home, garden and tools:
TVs
Kitchen and dining

Furniture and decor
Bedding and bath
Appliances
Patio, l awn and garden e quipment
Home i mprovement supplies
Power and hand tools
Lamps and l ight fixtures
Kitchen and bath fixtures
Hardware
Building supplies
Home audio and theater

Camera, photo and video
Cell phones and accessories
MP3 players and accessories
Car e lectronics and Global Positioning System
Appliances
Electronic accessories
Laptops, tablets and netbooks
Desktops and servers
Computer accessories and peripherals
External drives, mouse, and networking
Arts, crafts and sewing

Pet supplies
Computer parts and components

Software
Personal computer games
Printers and i nk
Office and school supplies
Digital
Legal
Kindle E-Readers
Amazon i nstant video
MP3 downloads
Game downloads
intellectual property and patents

public policy i nitiatives
business e thics and compliance
risk management
litigation
Amazon Web Services
Worldwide Operations and Customer Service
Amazon Elastic Compute Cloud

Amazon Simple Storage Service
Amazon SimpleDB
Amazon Simple Queue Service
Amazon Flexible Payments Service
Amazon Mechanical Turk
Amazon CloudFront
supply chain management

transportation
logistics
distribution
inventory management
customer service
E-Commerce Platform
Worldwide Operations and Customer Service

supply chain management
transportation
logistics
distribution
inventory management
customer service
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2
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5
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9
"Jeffrey Preston Bezos," The Biography Channel website, http://www.biography.com/people/jeff-bezos-9542209 (accessed Oct 23, 2013)
10
Burke, Doris, and Mangalindan JP. "Amazon's Jeff Bezos: The ultimate disrupter." Fortune, 11 16, 2012.
http://management.fortune.cnn.com/2012/11/16/jeff-bezos-amazon/ (accessed October 23, 2013).
11
Ibid.
12
13
Ibid.
14
Ibid.
15
Jeffrey, Bezos. Amazon.com, Inc., "1997 Shareholder Letter." Last modified 1997. Accessed October 23, 2013. http://media.corporateir.net/media_files/irol/97/97664/reports/Shareholderletter97.pdf
16
Ibid.
17
18
19
Amazon.com, Inc., "Amazon.com Acquires Three Leading Internet Companies." Last modified 4 27, 1998. Accessed October 23, 2013.
http://phx.corporate-ir.net/phoenix.zhtml?c=176060&p=irol-newsArticle&ID=502989&highlight=
20
Ibid.
21
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12

22
Jeffrey, Bezos. Amazon.com, Inc., "2001 Shareholder Letter." Last modified 2001. Accessed October 23, 2013. http://media.corporateir.net/media_files/irol/97/97664/reports/shareholderletter01.pdf
23
Heisler,Gregory. Time Magazine, "Jeff Bezos - Person of the year." Last modified 12 27, 1999. Accessed October 23, 2013.
http://content.time.com/time/covers/0,16641,19991227,00.html
24
Ibid.
25
Jeffrey, Bezos. Amazon.com, Inc., "2000 Shareholder Letter." Last modified 2000. Accessed October 23, 2013. http://media.corporateir.net/media_files/irol/97/97664/reports/00ar_letter.pdf
26
Jeffrey, Bezos. Amazon.com, Inc., "2000 Shareholder Letter." Last modified 2000. Accessed October 23, 2013. http://media.corporateir.net/media_files/irol/97/97664/reports/00ar_letter.pdf
27
Ibid.
28
Ibid.
29
Ibid.
30
Laurie, Flynn. The New York Times, "In a Well-Worked Pattern, Amazons Revenue Rises and Its Profit Drops." Last modified 2 2, 2007.
Accessed October 23, 2013.
http://www.nytimes.com/2007/02/02/technology/02amazon.html?ex=1328072400&en=d7d533377d0bdb35&ei=5088&partner=rssnyt&emc=rss
&_r=0
31
32
Ibid
33
34
Ibid
35
36
Ibid.
37
Ibid.
38
Ibid.
39
Brad, Stone. Bloomberg BusinessWeek, "The Secrets of Bezos: How Amazon Became the Everything Store." Last modified 10 10, 2013.
Accessed October 23, 2013. http://www.businessweek.com/articles/2013-10-10/jeff-bezos-and-the-age-of-amazon-excerpt-from-the-everythingstore-by-brad-stone.
40
Ibid.
41

42
Ibid.
43
Mastering Strategic Management. Washington, D.C.: Flat World Knowledge, 2011.
44
Amazon.com, Inc., 2012 Annual Report. Last modified 2012. Retrieved: 20 Nov 2013.
http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9MTc5ODc3fENoaWxkSUQ9LTF8VHlwZT0z&t=1
45
Ibid.
46
Ibid, 2.
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13

47
Ibid, 2.
48

49
"About AWS." About AWS. http://aws.amazon.com/about-aws/ (accessed November 20, 2013).
50
Ibid
51
Darrow, Barb. "Amazon is No. 1. Whos next in cloud computing? Tech News and Analysis." Gigaom.
http://gigaom.com/2012/03/14/amazon-is-no-1-whos-next-in-cloud-computing/ (accessed November 20, 2013).
52
" Amazon Unbox on TiVo Now Available, Offering Over 1.5 Million Broadband-Ready TiVo Subscribers Access to Thousands of Movies
and TV Shows." Amazon.com, Inc. Press Release. http://phx.corporate-ir.net/phoenix.zhtml?c=176060&p=irolnewsArticle&ID=903244&highlight=(accessed November 20, 2013).
53
Ibid
54
"Amazon MP3 Adds Music Audio Downloads from Warner Music Group." Amazon.com, Inc. Press Release. http://phx.corporateir.net/phoenix.zhtml?c=176060&p=irol-newsArticle&ID=1089999&highlight= (accessed November 24, 2013).
55
Ibid
56
Ibid
57
"Kindle." - Best-Selling Ereader. http://www.amazon.com/gp/product/B007HCCNJU/ref=topnav_storetab_kstore#kindle-compare (accessed

November 20, 2013).
58
59
Ibid, 18.
60
ibid, 17.
61
Ibid, 22.
62
Ibid, 1.
63
NASDAQ STOCK EXCHANGE GLOBAL SELECT MARKET 1 (2013): 1.

http://www.reuters.com/finance/stocks/analystResearch?symbol=AMZN.OQ (accessed November 20, 2013).
64
65
Amazon.com, Inc.. "FAQs Investor Relations." FAQs. http://phx.corporate-ir.net/phoenix.zhtml?c=97664&p=irol-faq#6991 (accessed

November 20, 2013).
66
BENSINGER, GREG. "Amazon Grows, and Spends." The Wall Street Journal - Business.
http://online.wsj.com/news/articles/SB10001424127887323335404578445154078172038 (accessed November 20, 2013).
67
"Amazon.com, Inc.: NASDAQ:AMZN quotes & news - Google Finance." Amazon.com, Inc.: NASDAQ:AMZN quotes & news - Google
Finance. https://www.google.com/finance?q=NASDAQ%3AAMZN&ei=mclmUuj9LISNqQH8Vw (accessed November 20, 2013).
68
Yglesias, Matthew Amazon Profits Fall 45 Percent, Still the Most Amazing Company in the World. The Slate Group, LLC.
http://www.slate.com/blogs/moneybox/2013/01/29/amazon_q4_profits_fall_45_percent.html (accessed December 21, 2013).
69
Amazon.com, Inc., 2012 Annual Report. Last modified 2012. Retrieved: 20 Nov 2013. P25-26.
70
Ibid
71
Ibid, 17.
72
Coyle, Emily. "Amazon Dreams Big About the Future of Cloud Computing." Wall St. Cheat Sheet. http://wallstcheatsheet.com/stocks/amazondreams-big-about-the-future-of-cloud-computing.html/3/ (accessed November 20, 2013).
73
Bishop, Todd. "Jeff Bezos: 7 gems from his Amazon Web Services talk." GeekWire. http://www.geekwire.com/2012/jeff-bezos-5-gemsamazon-web-services-talk/ (accessed November 20, 2013).
th
14

74
Ibid.
75
"Day 1 Keynote." AWS re:Invent 2013. http://reinvent.awsevents.com/index.html (accessed November 20, 2013).
76
Anders, George. "Amazon's 1,263 Patents Reveal Retailing's High-Tech Future." Forbes.
http://www.forbes.com/sites/georgeanders/2013/11/14/amazons-1263-patents-reveal-retailings-high-tech-future/ (accessed November 20, 2013).
77
Ibid.
78
Amazon.com, Inc., Q3 2013 Financial Results. Last modified 2013. Retrieved: 20 Nov 2013. P1-3.
79
Ibid
80
Ibid
81
Wallace, Gregory. Amazon says drone deliveries are the future. Cable News Network. Last modified 2013.
http://money.cnn.com/2013/12/01/technology/amazon-drone-delivery/ (accessed December 20, 2013).
82
Lunden, Ingrid. Amazon Reportedly Buys Mobile Payments Startup Gopago, Working On An Ambitious New Project. AOL Inc. Last
modified 2013. http://techcrunch.com/2013/12/16/amazon-reportedly-buys-mobile-payments-startup-gopago-working-on-an-ambitious-newproject/ (accessed December 20, 2013).
83
MERGENT Online, "Mergent Online - Business: Amazon.com Inc.." Accessed October 23, 2013.
http://www.mergentonline.com.libproxy.library.wmich.edu/companydetail.php?pagetype=business&compnumber=91098 ;Company Profile
Amazon.com, Inc.." MarketLine. (2012). 2B52E1D8-E964-4D7F-8B1B-C48DBC97815F (accessed October 23, 2013).
th
15

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Amazon.com, Inc.

: a case study analysis

Source: Telco2.net 2014

1.1 Early Growth & Mission

1.2 Amazons IPO

1.3 From Growth to Regression

II. ORGANIZATIONAL STRUCTURE

North America and

Finance and Administration

Amazon Web Services

Worldwide Operations and

Source: Amazon.com, Inc. 2013

III. BUSINESS OPERATIONS

3.1 Business Philosophy

3.2 Aggressive Entrepreneurial Culture

3.3 Current Products

3.3.1 Retail Website and E-Commerce

3.3.2 Amazon Web Services (AWS) [2006]

3.3.3 Digital Media Delivery [2006]

3.3.4 The Kindle [2007]

IV. FINANCIAL PERFORMANCE

correspondent Matthew Yglesias sarcastically summarizes this financial strategy:

5.1 From Packages to Packets

5.2 A Change Catalyst for the Marketplace

Toys, kids and baby:

Movies, music and games:

Grocery and gourmet food

Toys and games

Electronics and computers:

Home, garden and tools:

Kitchen and dining

Home audio and theater

Arts, crafts and sewing

Computer parts and components

intellectual property and patents

Amazon Web Services

Worldwide Operations and Customer Service

Amazon Elastic Compute Cloud

supply chain management

Worldwide Operations and Customer Service

Amazon.com, Inc., "Careers Homepage." Accessed October 23, 2013. http://www.amazon.com/CareersHomepage/b?ie=UTF8&node=239364011.

Amazon.com, Inc., "Careers Homepage." Accessed October 23, 2013. http://www.amazon.com/CareersHomepage/b?ie=UTF8&node=239364011.

Mastering Strategic Management. Washington, D.C.: Flat World Knowledge, 2011.

Amazon.com, Inc., "Careers Homepage." Accessed October 23, 2013. http://www.amazon.com/CareersHomepage/b?ie=UTF8&node=239364011.

"About AWS." About AWS. http://aws.amazon.com/about-aws/ (accessed November 20, 2013).

"Kindle." - Best-Selling Ereader. http://www.amazon.com/gp/product/B007HCCNJU/ref=topnav_storetab_kstore#kindle-compare (accessed

NASDAQ STOCK EXCHANGE GLOBAL SELECT MARKET 1 (2013): 1.

Amazon.com, Inc.. "FAQs Investor Relations." FAQs. http://phx.corporate-ir.net/phoenix.zhtml?c=97664&p=irol-faq#6991 (accessed

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