Case Analysis and Presentation: Amazon Case Example

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Case Analysis and PresentationAmazon Case
Example

• Dr. Tom Housel
• Naval Postgraduate School

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Amazon Case Outline

•   Ø background including company history, the
  events leading up to the critical part of the
  case and the environment
• Ø state the problem concisely (principal
  problems, challenges)
• Ø  primary decision-makers and stakeholders
• Ø  what are the goals and objectives of the
  company
• Ø  a list of your recommendations
• Ø support your recommendations with logic and
  facts
• (Optional Future challenges/opportunities)

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Background

• Opens virtual doors in 1995
• 3.5 million titles by 1996
• IPO 1997
• 1999 - 1Billion from bond offering
• Contract with AOL
• Diversified product offerings (e.g., toys, CDs,
  videos)
• 19 million items -- 300 million, 5 million
  square foot warehouse
• Person-to-person auctions

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Amazon.com
Horizontal Portal

• Technical Architecture
• Dist, Order, Fulfillment
• Passion for Innovation
• E-Commerce Know-How

• Business Development
• Partnership Know-How
• Brand
• 20M Loyal Customers

Acquisition
Outsourcing
Network/Partners
Organic Growth
U.S. Books Music Video/DVD Toys/Games Software Kit
chen Lawn Patio
zShops Over 100 Small Merchants Selling in 19
categories
Home Improve European Books Auctions Product
Search Compare Shop Reminder
drugstore.com carsdirect.com ashford.com sothebys
.com toysRus.com
Retail/Marketplace/Exchange
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Stakeholders

• Investors analysts, VCs, big and small
• Customers
• Management and employees
• Government-regulators (e.g., SEC)
• (Possible discussion point Role of stakeholders
  in influencing-formulating strategy comparable
  stakeholders in DoD environment)

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Company Goal(s)

• Continued exponential growth
• DiversificationeCom portal intermediary
• Piece-of-the-action
• One-stop-shopping
• Survival Buy.com, eBay, others
• (Possible discussion point Are these the right
  goals given the environment, customer base,
  stakeholders Comparable goals for DoD agencies,
  initiatives, e.g., e-bus in government)

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Amazon.com
The amazon.com platform is comprised of
brand, customers, technology, deep e-commerce
expertise, and a great team with a passion for
innovation and a passion for serving customers
well We believe that we have reached a tipping
point where this platform allows us to launch
new businesses faster, with a higher quality of
customer experience, a lower incremental cost, a
higher chance of success, and a cheaper path to
scale and profitability than perhaps any other
company
Jeff Bezos, Founder and CEO
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Amazon Problems - Challenges

• Market value justification and slowing growth
  rate
• Need to continued high growth (33 down to 7)
• Competition bricks and mortar to clicks an
  mortar, eBay
• Creating complete supply chain and distribution
  network
• (Possible discussion point Are these their only
  big problems? What about increases in interest
  rates irrational exuberance quote by
  Greenspan? Comparable DoD

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zShops Problems - Challenges

• Loss of control over customer relationship
• Possible damage to reputation
• Potential delivery problems
• Cost of guarantees
• Need to attract top-tier, best of breed brands
• Need for full range of products
• SWOT analysis

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Recommendations

• Stick with Brand Names
• Personalize customer interface
• Co-Brand with Merchants
• Provide data mining services for Merchants
• Provide billing services for Merchants
• Enroll service companies
• Create communities of interest based on data
  mining
• Offer other services to Merchants (e.g., manage
  their IT, electronic supply chains, distribution,
  co-marketing)
• Go Global

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zShop Supporting Logic (Value-Added) This
should be embedded in the foregoing discussion

• Customers
• One-stop-shopping
• Reliability and Credibility
• Guarantees
• Merchants
• Brand recognition
• Access to larger customer base
• Sharing Amazons e-com infrastructure
• Guarantee and credibility
• Access to Amazons customer database
• Amazon
• Added revenue using subscription model
• Customer intelligence

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GB 4021 E-Business for DefenseChallenge
Questions 

• Chapter 10 Amazon case review
• 1. What were the potential problems for Amazon
  when they entered the warehouse phase of their
  development?
• What was the impact on investors perceptions?
• What was the impact on the organizational
  priorities?
• What is the corollary problem for DoD
  organizations?
• 2. How should the DoD foster an organizational
  environment to stimulate entrepreneurs such as
  Bezos?
• What reward system should be used?
• How would the financing work?
• What changes in organizational culture and
  structure would be necessary?
• 3. What role did the stakeholders play in the
  creation of zShops?
• a. Investors
• b. Customers
• c. Amazon Employees management
• d. Merchants
• 4. How can zShops add value for these
  stakeholders?
• Key take-away from last class meeting?

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Optional Future Challenges

• Scaling the information technology platform
• Secure transactions
• Growth
• Going Global
• Competition

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Defense Lessons Learned

• Get organizational buy-in
• Make sure you know who the stakeholders (e.g.,
  customer) are for your service/product
• Understand the implications of a slow or fast
  adoption rate
• Brand your e-Bus service/application
• Offer service guarantees (service level
  agreements)
• Clearly identify the value-addeds of your service
• Clearly identify the potential risks of your
  service