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Assignment: Case Study Of

Submited To: Prof. Shama Saddaqat

Submited By:

Name Roll No.

Muhammad faisal 1554

Muhammad ayaz 1517

Salamat ali 1510
Ahsan shamas 1560
Muhammad usman 1538

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Type Public (Nasdaq: amzn)
Founded 1994
Founder Jeffrey p. Bezos
Headquarters Seattle, washington, usa
Area served Worldwide
Key people Jeffrey p. Bezos
(chairman, ceo, & president), tom szkutak (cfo)
Industry Retail
Products Amazon.Com
A9.Com
Alexa Internet
Imdb
Kindle
Amazon Web Services
Dpreview.Com
Javari.Co.Uk
A2z Development
Revenue ▲ Us$ 24.509 billion (2009)
Operating income ▲ Us$ 1.129 billion (2009)
Net income ▲ Us$ 902 million (2009)
Employees 24,300 (2010)
Website Amazon.com
Alexa rank 22
Type of site E-commerce
Advertising Web banners and videos
Available in English, japanese, german, french, & chinese
Launched 1995
HISTORY

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Amazon was founded in 1995, spurred by what bezos called "regret minimization framework",

his effort to fend off regret for not staking a claim in the internet gold rush. While company lore

says bezos wrote the business plan while he and his wife drove from new york to seattle, that

account appears to be apocryphal. The company began as an online bookstore; while the largest

brick-and-mortar bookstores and mail-order catalogs for books might offer 200,000 titles, an

online bookstore could offer more. Bezos named the company "amazon" after the world's largest

river. Since 2000, amazon's logotype is an arrow leading from a to z, representing customer

satisfaction (as it forms a smile); the goal was to have every product in the alphabet. In 1994, the

company incorporated in the state of washington, beginning service in july 1995, and was

reincorporated in 1996 in delaware.

BUSINESS RESULTS

The company remains profitable: net income was $35.3 million in 2003, $588.50 million in

2004, $359 million in 2005, and $190 million in 2006 (including a $662 million charge for r&d

in 2006). The firm's retained earnings were negative $1.8 billion in 2006, negative $1.4 billion in

2007, negative $730 million in 2008, and $172 million in 2009. revenues increased thanks to

product diversification and an international presence: $3.9 billion in 2002, $5.3 billion in 2003,

$6.9 billion in 2004, $8.5 billion in 2005, and $10.7 billion in 2006. On november 21, 2005,

amazon entered the s&p 500 index, replacing at&t after it merged with sbc communications. On

december 31, 2008, amazon entered the s&p 100 index, replacing merrill lynch after it was taken

over by bank of america. As of march 26, 2010, amazon has a higher market cap than that of

target corporation, home depot, costco, barnes and noble, and best buy, only lagging that of

walmart among american brick and mortar retailers.

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HEADQUARTERS

The company's global headquarters are located on seattle's beacon hill. It has offices throughout

other parts of greater seattle, including union station and the columbia center.

Amazon has announced plans to move its headquarters to the south lake union neighborhood of

seattle beginning in mid-2010, with full occupancy by 2011. This move will consolidate all

seattle employees onto the new 11-building campus.

PRODUCT LINES

Books, music & movies Consumer electronics Food & household Clothing& jewelry
Books Audio & video Consumer food Apparels
Dvd Camera & photos Grocery Jewelry & watches
Music Cell phones & service Pet suupplies Shoes
Magazines & newspaper Musical instrument Home & garden Health & beauty
Amazon shorts All electronics Bed & bath Care
Textbooks Computer & office Fresh flowers Kids & baby
Unbox video Computer & add-ons Furniture & décor Beauty
Downloads Office products Home improvement Apparel(kids)
Vhs Softwares Kitchen&housewar Baby
e
Toys & videos games Tools & automotive Outdor living Sports & fitness
Toys & games Automotive All homes Excercie & fitness
Video games Industrial & scientific Sports and outdoor
THIRD-PARTY SELLERS

According to information in Amazon.com discussion forums, Amazon derives about 40 percent

of its sales from affiliates whom they call Associates and third-party sellers who list and sell

products on the Amazon websites. Associates receive a commission for referring customers to

Amazon by placing links on their websites to the Amazon homepage or to specific products. If a

referral results in a sale, the Associate receives a commission from Amazon. Worldwide,

Amazon has "over 900,000 members" in its affiliate programs. Associates can access the

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Amazon catalog directly on their websites by using the Amazon Web Services (AWS) XML

service.

COMPETITION

Our businesses are rapidly evolving and intensely competitive. Our current and potential

competitors include: (1) physical-world retailers, publishers, vendors, distributors,

manufacturers, and producers of our products; (2) other online e-commerce and mobile e-

commerce sites, including sites that sell or distribute digital content; (3) a number of indirect

competitors, including media companies, web portals, comparison shopping websites, and web

search engines, either directly or in collaboration with other retailers; (4) companies that provide

e-commerce services, including website development, fulfillment, and customer service; (5)

companies that provide infrastructure web services or other information storage or computing

services or products; and (6) companies that design, manufacture, market, or sell digital media

devices. We believe that the principal competitive factors in our retail businesses include

selection, price, and convenience, including fast and reliable fulfillment. Additional competitive

factors for our seller and developer services include the quality, speed, and reliability of our

services and tools. Many of our current and potential competitors have greater resources, longer

histories, more customers, and greater brand recognition.

MARKETING STRATEGY

We direct customers to our websites primarily through a number of targeted online marketing

channels, such as our Associates program, sponsored search, portal advertising, and other

initiatives. Our marketing expenses are largely variable, based on growth in sales and changes in

rates. To the extent there is increased or decreased competition for these traffic sources, or to the

extent our mix of these channels shifts, we would expect to see a corresponding change in our

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marketing expense or its effect. Marketing costs increased in absolute dollars in 2009 compared

to 2008 and 2007, due to increased spending in variable online marketing channels, such as our

Associates program and sponsored search programs.

FINANCIAL CONDITION

The International revenue growth rate was 31%, 33%, and 39% in 2009, 2008, and 2007. The

increase in revenue in each year primarily reflects increased unit sales driven largely by our

continued efforts to reduce prices for our customers, including from our free shipping offers, and

Amazon Prime, and by increased in-stock inventory availability and increased selection of

product offerings, as well as a larger base of sales in faster growing categories such as

electronics and other general merchandise, increased in-stock inventory availability, and

increased selection of product offerings. Additionally, changes in currency exchange rates

positively (negatively) affected International net sales by $(174) million, $131 million, and $390

million in 2009, 2008, and 2007.

CONCLUSION

Amazon's initial business plan was unusual: the company did not expect a profit for four to five

years; the strategy was effective. Amazon grew steadily in the late 1990s while other Internet

companies grew blindingly fast. Amazon's "slow" growth provoked stockholder complaints that

the company was not reaching profitability fast enough. When the dot-com bubble burst, and

many e-companies went out of business, Amazon persevered, and finally turned its first profit in

the fourth quarter of 2001: $5 million, just 1¢ per share, on revenues of more than $1 billion, but

the profit was symbolically important.

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