AMAZON

COURSE : INTRODUCTION TO BUSINESS (FBA 1013)

GROUP MEMBERS : KELLY TEH (2018000309)

NUMAN REMESH NAIR (2018000374)
NG XIAO WEI (2018000238)
 2. INTRODUCTION OF
AMAZON
 Founded by Jeffrey Preston Bezos.
 Amazon originally started off as an online bookstore in 1993.
 Jeff Bezos motivation for starting Amazon was after finding a startling statistic
about the growth of the internet.
 In 1998, Amazon started selling music and videos.
 Jeff Bezos’ best decision was the launch of Amazon Web Services (AWS), a retail
computing infrastructure.
Tagline
 “Work hard, Have fun, Make
history And You’re Done! You
Shop Amazon Gives.”

Mission
 “We strive to offer our customers
the lowest possible prices, the best
available selection, and the utmost
convenience.”
Vision
 “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.”
 3. TYPE OF MARKET :
OLIGOPOLY
• why?
• Although Amazon’s revenue was $135 billion, it only just took
up less than 2.5% of the total market share.
• Amazon faces many competitive businesses through e-
commerse
• -> Amazon allows anyone to sell goods there; creating
opportunities for other companies.
ECONOMIC GROWTH OF AMAZON
• Research tells us that retail e-commerce has said to be growing
consistently for the past 5 years and is predicted to continue till 2021.
• -> this creates many job opportunities for businesses
• -> the capital needed to startup a business is much lower.

In M’sia, MDEC promotes e-commerce through ecosystem programmes

& eUsahawan programme.
 4. ORGANIZATIONAL CULTURE
OF AMAZON
Features:
 Boldness
• Pioneer in selling a wide variety of items online
• Workers are pushed to producing new ideas
• Insists on planning diversified strategies
 Customer-Centricity
• Concentration on the needs and demands of their customers
• Identify trends and changes in consumer taste
 Peculiarity
• Challenging conventions
• Motivates workers to think creatively
 14 LEADERSHIP PRINCIPLES
• Customer Obsession • Think Big
• Ownership • Bias for Action
• Invent and Simplify • Frugality
• Are Right a Lot • Earn Trust
• Learn and Be Curious • Dive Deep
• Hire and Develop the Best • Have Backbone
• Insist on the Highest • Disagree and Commit
Standards • Deliver Results
 WORKPLACE ALLEGATIONS
• “one of a dystopian environment with motivations from the Darwinian theory of
survival of the fittest”
• Employees are expected to work long hours of at least 60 hours a week, where
some instances e-mails are sent past midnights, with text messages followed
asking why they weren’t answered.
• They are encouraged to tear down other employees’ ideas in meetings, and are
encouraged to sabotage others.
 BUSINESS ENVIRONMENT OF
AMAZON
Factors included: Competition
Resources • Threat of new entrants
• Tangible • Power of buyers and suppliers
- Storage houses, distribution centers, its • Substitute products and services
employees and its offices • Competitive rivalry
• Intangible
- Reputation, brand image, customer Customers
awareness, and skills of employees

International Rules and Regulations

 5. SOCIAL RESPONSIBILITY AND
MANAGERIAL ETHICS OF THE
• Employees COMPANY
-> Amazon Career Choice Programme; pays 95% of tuition fees to
develop skills
• Environmental
-> Amazon Wind Farm Texas; generates over 1mil megawatt hours of
clean energy annually
-> Amazon also does researches on how to reduce packaging materials
to reduce pollution
• Managers
-> mini-cultures are created within each branch
-> Jeff Bezos; the CEO of Amazon, works on improving on the
working culture within Amazon.
 6. MARKETING PLAN
• Amazon’s Target Market
->Individuals with Internet access & payment tools
• Amazon Prime’s Target Market
-> Adults over 40

However, everyone is a target market as Amazon is versatile to every

markets needs and wants.
 PRODUCT
• Amazon’s marketplace, where customers are able to browse and
purchase & have the product sent within the same day, or 3 days.
• The Fulfillment by Amazon (FBA) programme help scale local
businesses and reach more customers.
• Amazon has also introduced the Kindle; enabling customers to read
books online.
• In 2014, Amazon released Fire Phone and Amazon Fire TV to the
public. It allows customers to stream channels online.
• Alexa; Amazon’s very own personal assistant was then booming, once
again for the third year running.
 PLACE
• Amazon operates everywhere, as long as there is an Internet
connection.
-> Amazon has won first place in the “24/7 Wall Street Customer
Service Hall of Fame” seven years in a row
 PROMOTION
• Amazon not only promotes heavily in social media, but also through
pixels and targeted ads.
-> For example, Google would automatically direct customers to
Amazon when shopping for a product.
• Amazon also appears in major events
-> Super Bowl
 PRICE
• Amazon creates an economy for sellers to compete among themselves.
-> The only way sellers get to stand out is to sell at a lower price
• ‘Amazon White’ selects products with lowest pricing to attract
customers
-> same strategy as Tesco Choice
7. STRENGTH
Strong brand Extensive product mix
- Amazon have become a - Amazon has everything
household name for and anything we could
online shoppers. find so will be attracted
people to using Amazon.

Highest revenues in the

Customer centric
industry
- Amazon uses CRM to
- Amazon can easily
collect information on the
invest in new business
customer’s shopping
ventures or in new
behavior.
product creations.
 WEAKNESSES
Limited penetration
Easily mimicked Limited brick-and-
in developing Delivery Cost
business model mortar presence
markets

• Amazon’s limited
• Other businesses • If other companies
brick-and-mortar • Although it may be
can just set up an become fully
presence limits the low cost to people in
established in
online retail site ability to attract the States, the
developing markets,
that sells as any customers that are delivery cost to
it would be hard for
types of products more sellable in Malaysia will be
Amazon to compete
just like Amazon. physical stores than more expensive.
in such markets.
in online stores.
 Boost measures to
Penetrate developing reduce counterfeit
markets sales
-Amazon has the -Amazon could use
opportunity to branch this issue as an
out to many more opportunity to
countries all over the improve their
world. technology.
OPPORTUNITIES

Expand brick and mortar

business Backward Integration
-to cater to the old -Amazon can come up
fashioned brick and mortar with more their own
customers whilst brand in diverse
maintaining their online commodity categories
presence.
 THREATS
Cybercrime
 Amazon could turn this into
an opportunity to intensify its
network security efforts.
Imitation
 Amazon may not be the first
choice of e-commerce for
consumers in Malaysia.
Aggressive competition with
large retail firms
 Many large retail firms are
continuing their efforts in
improving their online retail
presence.
Government legal and regulations
 In Malaysia, the food without
Halal certificate is not allowed to
be imported to Malaysia.
 PESTLE
Political factors
• NAFTA empowers Amazon to expand within North America quickly.
• On September 2018, the USA administration placed a 10% duty on $200 billion
in imports in China, and is scheduled to increase to 25% by Q1 2019.

Economic factors
• The quantity of demand will increase when the citizen have more income.
• Amazon is susceptible to sudden fluctuation in the foreign exchange rates.

Social factors
• The gender, age, salary will influence a person’s online shopping behaviour.
• Amazon released a slew of tools adapting to this consumer lifestyle and trend.
Technological factors
• Amazon has constantly utilize technology to improve their service offerings to
customer.
• Technology has also been utilized to drive their sales up.

Environmental factors
• Some article states that Amazon Prime’s one-day shipping and online shopping in
general is wasteful and endangering the environment.
• Amazon would provide a ridiculous amount of packaging in a large box for small
items.

Legal factors
• Sell items such as food on Amazon requires approval from the FDA.
• Amazon would need to compromise with the laws and regulations of each country.
 8.FINANCIAL PLAN (2018)

Balance Sheet Income Statement

Cash Flow Statement Key Financial Ratios
 3 TYPES OF BUSINESS
ENVIRONMENTS
Economic Environment

Industry Environment

Global Environment
10. CONCLUSION
 10. RECOMMANDATIONS
Expansion to new markets

Improve quality of service in international markets