Presented by: Mary Annjaynette I.

Dalupang
Presented to: Prof. Mark Glenn Villamor, MBA
 Company Background & Profile
Amazon.com opened its virtual doors on the
World Wide Web in July 1995. Its founder and
current CEO is Jeff Bezos. His motto was “get big
fast,” and Seattle-based Amazon eventually
morphed into an e-commerce colossus.

Revenue(FY, 2018): $232.9 B

Market capitalization(2019-02-04): $802 B
Amazon Prime Members(Apr, 2018): 100 M
Jeff Bezos
Founder & CEO of Amazon.com
 Vision Statement
“Our vision is 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.”

Mission Statement
"Amazon is guided by four principles: customer obsession
rather than competitor focus, passion for invention,
commitment to operational excellence, and long-term
thinking."
 Company Background & Profile
As an e-commerce company, it provides a marketplace for consumers,
sellers and content creators. The Company offers its users merchandise
and content purchased for resale from vendors and those offered by
third-party sellers. It also enables authors, musicians, filmmakers, app
developers and others to publish and sell content via its branded
websites.
Amazon also provides Kindle Direct Publishing. In
addition, the Company offers co-branded credit
card agreements and advertising services, serves
developers and enterprises through Amazon Web
Services and manufactures and sells electronic
devices. Currently Amazon operates in three
segments: North America, International, and
Amazon Web Services (“AWS”).
Company Background & Profile
 The American Customer Satisfaction Index: Rank #1 (for the 8th
year in a row)
 The U.K. Customer Satisfaction Index: Rank #1 (for the 5th
year in a row)
 LinkedIn’s 2018 Top Companies list: Rank # 1 (ranks the most
sought after places to work for professionals in the United
States
 Harris Poll’s annual Reputation Quotient (surveys over 25,000
consumers on a broad range of topics from workplace
environment to social responsibility to products and services):
Rank #1 (for the 3rd year in a row)
 Type of Strategies
• Corporate Strategy • Function-level Strategy
Unrelated Diversification  Optimization of Technology
Backward Integration Building Customer Loyalty
through Amazon Prime
Horizontal Integration
 Organizational Culture: Insist
Market Development
on the Highest Standards
• Business-level Strategy  Job Design and HR Strategy
Cost Leadership  Amazon Intellectual Property
Product Development Policy
Market Penetration Amazon's Quality Assurance
Standards
Corporate Level Strategy
 Corporate-level Strategy
Unrelated Diversification
(Adding new, unrelated products or service)
Amazon started as an online bookstore & quickly diversified into
other product lines & services.
June 11,1998: Amazon extended beyond books and started
selling music CDs, and by the following year it had added more
product categories, such as toys, electronics and tools.
Today, you can find anything from; books, movies, games,
music, electronics, apparel and accessories, auto parts, home
furnishing, health and beauty, aides, toys and groceries.
 Corporate-level Strategy
Backward Integration
(Seeking ownership or increased control of a supplier)
Jan. 31, 2008: Amazon pays $300 million for Audible, an
audiobook company, which comes with a library of 80,000
programs in the United States and Europe.
 Corporate-level Strategy
Horizontal Integration
(Seeking ownership or increased control over competitors)
July 22, 2009: Despite attempts to penetrate the shoe market
Amazon hadn't been able to catch up with Zappos.com, which
provides free returns and overnight shipping. Thus, Amazon buys
online shoe retailer Zappos in an all-stock deal worth nearly
$900 million.
 Corporate-level Strategy
Market Development
(Introducing present products or services into new geographical
area)
Aug. 19, 2004: Amazon pays $75 million to buy Joyo, the largest
online seller of books and electronics in the growing Chinese market
Amazon acquired Junglee in 1998, and the website Junglee.com was
launched in India in February 2012 as a comparison-shopping
website - a site which allowed customers to compare prices online
but not purchase items directly.
Amazon now operates e-commerce websites in more than 10
countries, including Canada, the United Kingdom, China and India.
Business Level Strategy
 Business-level Strategy
Cost Leadership Strategy
A cost leadership strategy aimed at offering the maximum value for its
customers at the lowest price in addition to wrapping its business around
the customers wherein they find Amazon to be the go-to portal for their
online shopping needs.
Amazon also allows other retailers to sell their products, while taking a
cut of every purchase, this has helped Amazon expand its available
selection without having to increase its overhead cost.
June 10, 2003: The company starts to generate extra income by
licensing its platform (Amazon Web Services) to other e-commerce sites,
like Borders.com and Target.com. Fifteen years later, AWS dominates
cloud hosting and is one of the company's biggest revenue drivers.
 Business-level Strategy
Cost Leadership Strategy
Behind every Amazon business decision is the “flywheel” philosophy. It
describes a cycle in which a company cuts prices to attract customers,
which increases sales and attracts more customers, which allows the
company to benefit from economies of scale (bundling together logistics
and other routine costs), until, ultimately, the company can cut prices
again, spinning the flywheel anew.

The flywheel is the best encapsulation of Amazon’s

dual ambitions: to be customer-obsessed, and to
conquer the modern commercial world.
 Business-level Strategy
Product Development
(Seeking increased sales by developing new services)
Sept. 28, 1999: Amazon patents the ability to purchase an item
online with the click of a mouse. Called 1-Click, the technology
gives the company an early advantage by prompting customers
to buy more and allowing the company to collect their data.
Amazon would later sue Barnes & Noble for infringement,
forcing other websites to license the technology until the patent
expired in 2017.
 Business-level Strategy
Product Development
(Seeking increased sales by developing new products/services)

Nov. 19, 2007: Just as the holiday shopping season is about kick into full
gear, Amazon unveils its Kindle. The electronic reading device enables
users to wirelessly download books, magazines and newspaper articles
among other content
Also in 2011, Amazon’s tablet computer, the Kindle Fire,
was released. Among a variety of other ventures, Amazon
launched a cloud computing service in 2006; Amazon
Studios that develops movies and TV series, in 2010; and
Amazon Art, an online marketplace for fine art, in 2013.
 Business-level Strategy
Market Penetration
(Seeking increased market share for present products or services in
present markets through greater marketing efforts)
Aug. 25, 2014: Amazon buys Twitch Interactive, the three-year-old video
game streaming company, for $970 million. The deal not only complements
the work being done at Amazon's own game production division, but it
helps pull the global gaming community towards its cloud platform,
Amazon Web Services.

June 16, 2017: After struggling for years in the intensely competitive
grocery delivery business, Amazon ups the ante and purchases Whole
Foods' 471 stores for $13.7 billion. It has since started to integrate the two
companies' distribution networks and offer discounts to Prime members.
Function Level Strategies
 Functional-level Strategy
Optimization of Technology
Amazon has leveraged technology as
a source of competitive advantage.

March 19, 2012: Amazon buys Kiva Systems, a robotics

company, for $775 million. The deal allows Amazon to amp
up automation at its fulfillment centers, delivering
products faster and with less need for human staff.
 Functional-level Strategy
Optimization of Technology
Further, Amazon uses Big Data Analytics as a tool to map consumer
behavior. Anyone who has shopped on Amazon encounters a list of
recommended products that are picked according to the browsing
history and the mapping of their purchases with that of likely
purchases in the future. This has meant that Amazon can sense and
intuit what consumers want and tailor its strategies accordingly.

Also, to streamline the supply chain, Amazon use automation and

enable suppliers and buyers to access some of its IT assets. Sellers
adjust supply levels based on demand data available from the
company’s online retail website and buyers can track order and
communicate with suppliers through data available from Amazon’s
website.
 Functional-level Strategy
Building Customer Loyalty through Amazon Prime
Feb. 2, 2005: During an earnings call, Bezos announces a $79-a-
year loyalty program that includes free two-day shipping on any
order.
Amazon provides steep discounts for is regular members through
the Amazon Prime program, ensuring timely and even express
delivery and at times, waiving off the shipping charges, passing
on the benefits of avoiding state taxes to the customers thereby
lowering the price even further, and an overall strategy based
on making the customer experience as seamless and as smooth
as possible.
 Functional-level Strategy
Organizational Culture: Insist on the Highest Standards
“Our pioneers make history. If you love to build, to invent, to pioneer on
a high performance team that's passionate about operational excellence—
you’ll love it here.”
Amazon uses its organizational culture to support innovative
idea creation among employees.
Amazon.com organisational structure has been carefully
designed to execute better than competitors and to achieve a
sustainable competitive advantage by using its highly skilled
and talented C-Level, management and specialist teams as a
valuable and rare resources that are enabled and influenced by
internet and information technology.
 Functional-level Strategy

Amazon.com has mostly operations management, product

development, R&D, technology and HR teams which are
organised regarding the specific areas and technologies, instead
of front office sales teams or cashiers on contrary to classical
retailers. Even in its Amazon Go physical store that has been
testing and there is no sales staff in it all shelves and check out
are controlled by smart systems such as beacons & RFID sensors,
smartphones and cameras.
 Functional-level Strategy
Job Design and HR Strategy
Amazon’s operations management uses a combination of in-
house employment processes and third-party employment
agencies. Workers from these agencies fill temporary positions
and are evaluated to determine suitability for permanent
positions, especially in warehouses and fulfillment centers.
Amazon’s recruitment and hiring processes are aligned to
organizational growth and human resource needs in corporate
offices.
 Functional-level Strategy
Amazon Intellectual Property Policy
Important: If you supply products for sale on Amazon, you must comply
with all federal, state, and local laws and Amazon policies applicable to
those products and product listings.
Amazon is dedicated to providing customers
with the widest selection of goods on Earth and
to creating an amazing customer experience.
Amazon does not allow listings that violate the
intellectual property rights of brands or other
rights owners.
 Functional-level Strategy
Amazon's Quality Assurance Standards
To sell jewelry products on Amazon, sellers must ensure that
their products meet Amazon's Quality Assurance Standards,
which help sellers deliver exceptional value to jewelry
customers. In addition, jewelry products and their associated
listings must adhere to all applicable laws, regulations and
standards, as well as the standards outlined by Amazon.
 Functional-level Strategy
Amazon Refund Policy “ Returnless Refunds”
Aug. 2017: Amazon introduced the "returnless refunds," a
feature that enables sellers to offer a refund without taking
back an item that may be expensive to ship and hard to
resell.
Sellers can receive exemptions to have specific inventory
excluded and said that the returnless service is optional.
These new features allow sellers to reduce time and costs
associated with returns while providing customers with an
easy and efficient return experience.
 Functional-level Strategy
Amazon Refund Policy “ Returnless Refunds”
This policy is directed at sellers who choose to fulfill
orders themselves instead of using Fulfillment by
Amazon. Amazon is making every effort to provide the
same experience for customers regardless of whether
the products they buy come from Amazon or a third-
party merchant.
 “This year marks the 20th anniversary of our first shareholder
letter, and our core values and approach remain unchanged. We
continue to aspire to be Earth’s most customer-centric
company, and we recognize this to be no small or easy
challenge. We know there is much we can do better, and we
find tremendous energy in the many challenges and
opportunities that lie ahead.”

Jeff Bezos
Founder & CEO
Amazon.com, Inc.