Amazon
Amazon
To:
Amazon.com, Inc. engages in the provision of online retail shopping services. The
company was founded by Jeffrey P. Bezos in July 1994 and is headquartered in Seattle,
WA. The tech giant is the largest Internet retailer in the world as measured by revenue
and market capitalization, and second largest after Alibaba Group in terms of total sales.
Amazon has separate retail websites for the United States, the United Kingdom and
Ireland, France, Canada, Germany, Italy, Spain, Netherlands, Australia, Brazil, Japan,
China, India, and Mexico. Some websites such as www.amazon.com, www.amazon.ca,
www.amazon.br etc. Amazon also offers international shipping of some of its products to
certain other countries.
Vision
“To be Earth’s most customer-centric company, where customers can find and
discover anything they might want to buy online.”
-This vision statement underscores the organization’s main aim of becoming the best e-
commerce company in the world. The following components or characteristics are
emphasized in Amazon’s vision statement:
• Global reach
• Customer prioritization
• Widest selection of products
Mission
“We strive to offer our customers the lowest possible prices, the best available
selection, and the utmost convenience.”
-This mission statement promises an attractive e-commerce service to satisfy customers’
needs. The following components or features are identifiable in Amazon’s mission
statement:
• Lowest prices
• Best selection
• Utmost convenience
✓ Not to discount a small number of products for a limited period of time, but to
offer low prices every day and apply them broadly across our entire product range.
✓ Achieve a bigger hold on the market of selling groceries, in order to expand and
become even larger business able to compete with other grocery selling
businesses.
✓ Increase its income by trying to become ever large business every year in its
categories.
core operations:
The major core operations of the Amazon.com Inc. are:
5. Layout Design and Strategy:- Amazon.com addresses this objective through efficient
layout designs that align with computer-assisted processes.
9. Scheduling:- Amazon relies on the involvement of suppliers for its online retail
business. Suppliers access the company’s website to determine demand levels and
implement their shipping and delivery schedules accordingly.
10. Maintenance:- Amazon.com Inc.’s operations management involves specialized
teams for maintaining technological assets. Moreover, Amazon is always on the lookout
for advanced technologies to improve its operational efficiency.
Amazon.com's product lines available at its website include several media (books, DVDs,
music CDs, videotapes and software), apparel, baby products, consumer electronics,
beauty products, gourmet food, groceries, health and personal-care items, industrial &
scientific supplies, kitchen items, jewelry, watches, lawn and garden items, musical
instruments, sporting goods, tools, automotive items and toys & games.
Entrepreneur and e-commerce pioneer Jeff Bezos was born on January 12, 1964, in
Albuquerque, New Mexico. Bezos had an early love of computers and studied computer
science and electrical engineering at Princeton University. After graduation he worked on
Wall Street, and in 1990 he became the youngest senior vice president at the investment
firm D.E. Shaw.
He founded Amazon.com, Inc. in 1994 and has been its Chief Executive Officer since
May 1996. Mr. Bezos has been Chairman of Amazon.com Inc. since 1994 and has been
its President since October 2000. Mr. Bezos is the Founder of Bezos Expeditions, LLC.
He is a Principal Advisor at A9.com, Inc. He served as the President at Amazon.com, Inc.
from 1994 to June 1999. He served as the President and Chief Executive Officer at
Padcom, Inc. He worked at the intersection of computer science and finance, helping
build one of the most technically sophisticated quantitative hedge funds on Wall Street
for D. E. Shaw & Co. He served as a Director of Drugstore.com Inc., from August 1998
to June 10, 2004. He has always been interested in anything that can be revolutionized by
computers. Intrigued by the amazing growth in use of the Internet, he created a business model
that leveraged the Internet’s unique ability to deliver huge amounts of information
rapidly and efficiently.
Institutional investors hold a majority ownership of AMZN through the 59.19% of the
outstanding shares that they control. This interest is also higher than at almost any other
company in the Internet Retail industry-
Ownership
Mutual Fund Holders Other Institutional Individual Stakeholders
22%
44%
34%
Jeff Bezos, Andrew R. Jassy, Jeffrey M. Blackburn and Jeffery Wilke were Amazon's
four largest individual shareholders.
1. Jeff Bezos-
2. Andrew R. Jassy-
Owning 87,849 shares directly as of May 2018, Andrew R. Jassy is Amazon's second-
largest individual shareholder. Jassy is the CEO of Amazon Web Services, a subsidiary
of Amazon that offers various cloud computing services across the globe. Before Jassy
became the CEO of Amazon Web Services on April 13, 2016, he served as senior vice
president of the group.
3. Jeffrey M. Blackburn-
Jeffrey M. Blackburn is the senior vice president of business development and digital
entertainment Amazon.com, and has been at the company since 1998. He is also the head
of Amazon's M&A, investments and strategic business development worldwide.
Blackburn holds 64,928 shares as of May 2018. He holds 44,928 of those shares directly,
and 20,000 indirectly.
4. Jeffery Wilke-
Jefferey Wilke has been the CEO Worldwide Consumer for Amazon since April 2016
and holds 64,807 shares. He owns 10,000 shares directly and 54,807 indirectly. Wilke
joined Amazon in 1999 as vice-president and general manager, and served as the senior
vice-president for the consumer business prior to his current role.
The Stock Markets where the company is listed and per share price
Assets: The total assets of Amazon in 2023 were $527.9 billion. This figure includes both current assets
(such as cash and inventory) and non-current assets (such as property and equipment). The high value of
Amazon’s assets reflects its substantial investments in infrastructure, technology, and other resources,
which are crucial for its operations and future growth.
Profits: In 2023, Amazon reported profits of $30.43 billion. This figure is a key indicator of Amazon’s
financial health and operational efficiency. The significant increase in profits from the previous year
suggests that Amazon has been successful in managing its costs and improving its profit margins.
Economic indicators:
Net Sales Revenue:
Amazon’s net sales revenue worldwide reached nearly 575 billion U.S.
dollars in 2023. This impressive figure reflects the company’s global
reach and dominance in the e-commerce industry.
Market Leadership:
Amazon is one of the most recognizable brands in the world, and the
third largest by revenue. It was the fourth tech company to reach a $1
trillion market cap, and a market leader in e-commerce, cloud,
advertising, video streaming, and music streaming.
Originally launched as an online bookstore in 1995, Amazon spent its
first few years as a brokerage for other sellers, like eBay. However,
founder Jeff Bezos always envisioned it would be an “everything store”
and quickly added other items to the e-commerce platform.
By the start of the 2000s, Amazon already had its distribution hubs,
although it wouldn’t be until later in the decade when it started its
delivery services.
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Impact on the U.S. Economy:
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Joint Ventures
Amazon has an experience with this investment form , but unlikely, it was disbanded
On January 30, 2018, Amazon, Berkshire Hathaway, and JPMorgan Chase & Co. announced a
new partnership dedicated to developing an independent, not-for-profit healthcare company for
their respective employees. The project’s goals include creating simpler, higher quality, and
transparent healthcare for the companies’ more than one million employees at lower costs, by
using innovative technological solutions to address current problems seen in healthcare. The
announcement created consternation among various healthcare industry giants, and was
accompanied by an estimated $30 billion decrease in market shares for the top ten health
insurance and pharmaceutical companies within two hours of its publication. This venture
denotes Amazon’s first serious foray into the healthcare industry, though not its first effort to
expand its innovative approaches across industry lines, e.g., the acquisition of Whole Foods in
August 2017.
Subsidiaries and Geographical Spread
Amazon has over 40 subsidiaries covering multiple industries and countries worldwide. Whole Foods
Market, a subsidiary of Amazon, had more than 500 stores across North America and had also begun to
expand into the United Kingdom as of 2019. Other subsidiaries include Twitch Interactive, Souq, Zoox,
Audible, AbeBooks, ComiXology, Woot!, and IMDb.
Selecting the right geographies for expansion is a critical decision that can determine the success or
failure of an e-commerce company’s global strategy. The criteria for selection often include market size,
customer purchasing power, internet penetration, Amazon Prime subscription costs and the ease of doing
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business. Based on these criteria, several regions emerged as particularly promising for Amazon e-
commerce companies :
Canada
Canada represented a prime market for Amazon e-commerce expansion due to its robust economy, high
internet penetration rates, and a consumer base familiar with and trusting of the Amazon brand. Amazon
operates an established marketplace in Canada (Amazon.ca), offering a full range of services including
Prime, Marketplace, and AWS, which provides a strong foundation for new and existing sellers to tap into
the Canadian e-commerce ecosystem. The country’s proximity to the United States also simplified
logistics and supply chain management for North American sellers like them, making it an attractive
option for Recontour’s geographic expansion.
Europe
Europe offered a diverse and sophisticated e-commerce landscape, with several countries hosting Amazon
marketplaces. This region combined developed economies with high purchasing power and a keen
interest in e-commerce, making it an attractive target for expansion. Key considerations include:
• United Kingdom: Despite Brexit, the UK remains a significant e-commerce market with a
mature Amazon ecosystem (Amazon.co.uk). The English-speaking population and similar
consumer behaviors to the US market make it an appealing first step for US-based sellers looking
to expand into Europe.
• Germany and France: As two of Europe’s largest economies, Germany (Amazon.de) and
France (Amazon.fr) offered substantial customer bases eager for a diverse range of products.
These countries had well-established Amazon marketplaces, and their strategic location in Europe
facilitated easier logistics across the continent.
• Italy and Spain: With growing e-commerce sectors, Italy (Amazon.it) and Spain (Amazon.es)
represented emerging opportunities within the European market. These countries had shown a
rapid adoption of online shopping, bolstered by Amazon’s growing presence.
Technology transfer:
Fulfillment Automation with Robotics:
Amazon’s fulfillment centers utilize cutting-edge robotic systems to streamline operations. For instance:
Sparrow: This intelligent robotic system can detect, select, and move individual products within the
warehouse. Leveraging computer vision and AI, Sparrow significantly advances item handling, allowing
employees to focus on other tasks while enhancing safety.
Existing Robotic Arms: Amazon employs robotic arms like Robin and Cardinal to handle packages
before they begin their delivery journey.
Delivery Driver Experience Enhancement:
Amazon’s custom electric delivery vehicles, developed in collaboration with Rivian, aim to improve the
work experience for Delivery Service Partner (DSP) drivers. These vehicles also contribute to reducing
carbon emissions in the communities where they operate.
The electric delivery vehicle is currently being built and is expected to enter expanded service in 2024.
Logistics Services Expansion:
Amazon’s logistics services expansion mirrors its success in cloud computing. This strategic move could
potentially become a $100 billion idea.
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Diverse Investments:
In 2020, Amazon was ranked first in company revenue among global publicly traded internet
corporations. The closest competitor was Google ($181.7 billion) and Alibaba ($109.5 billion). In terms
of revenue, it is the third-largest public company in the world, behind only Walmart and China’s
Petrochemical Corporation. Though they dominate a large chunk of the market share,
top competitors include online stores (21% of total retail sales), eBay (which saw its best net revenue
since 2013), Walmart (the primary rival, although Wally World has a 30-year edge in terms of brand
loyalty), and Alibaba (cloud computing is on a 60% year-on-year rise).
Economic Endicators
The company started Amazon Web Services (or AWS) in the early 2000s. The subsidiary provides on-
demand cloud computing platforms on a pay-as-you-go basis. There are 200 cloud services available, all
without any long-term contracts or complex licensing.
In 2010, the company’s revenue was $34.20 billion; 2021 saw earnings of $469.82 billion. Based on their
Q4 FY 2021 financials, the United States was the company’s biggest market with $314 billion. Germany
ranked second ($37.3 billion), followed by the UK ($31.9 billion) and Japan ($23.07).
So, over the last two decades, Amazon has invested in at least 128 companies across various domains,
including artificial intelligence, cloud computing, financial services, clothing, accessories, hardware, food
and beverages, media production, publishing, social networking, and transportation.
Success Sustainability
Amazon has a customer-focused approach: plus, innovation, expansion, and logistics. The success and
sustainability of Amazon, one of the world's largest e-commerce and technology companies, are attributed
to its popularity due to convenience and competitive pricing under various product offerings.
In addition to a broad range of products and services that they continually innovate and expand upon
including delivery options Amazon can make use of
economies of scale with its large transportation fleets
among other components within its logistical
infrastructure. These support not only the high growth
rate at Amazon but also facilitate easy deliveries such
as those through Amazon Prime; this makes customer
satisfaction even more pronounced.
When it comes to sustainability, Amazon has made several pledges towards environmental stewardship
thereby reducing their carbon footprint. In an ambitious move, the company aims to achieve net-zero
carbon emissions by 2040 and transition its operations to 100% renewable energy this has led them into
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sustainable packaging initiatives (besides electric delivery vehicles) which have had positive impacts on
their business and boosted promotion of sustainability across their supply chain as well.
Success Factors:
From a consumer standpoint, it’s easy to understand Amazon's success. Amazon is the largest and most
successful retailer in the western world because they built the best customer experience. Customers
expect 3 core things when they buy products online:
Large Selection: Consumers always want to find the product they are looking for and, of course, this
product should be in stock
Low Price: Consumers want to pay as little as possible for a product
Fast Delivery: Consumers want to get their orders as quickly as possible
What set Amazon apart is the long-term strategy for success, even in the face of the relatively short-term
loss of profit. For perspective: It took Amazon 14 years (!) to make as much as they did in the 3rd quarter
of 2019. Because they wanted to be the biggest, they had to be the best, and to be the best, they had to
become the biggest.
This logic or mechanism perpetuating growth is called the ‘Amazon Flywheel‘. Let’s start with Customer
Experience:If customers have a great (and consistent) shopping experience on the platform, they will
reliably return to it, and even suggest it to their friends. This creates Traffic.Sellers will certainly follow
traffic - they need to put their products in front of the eyes of consumers.More sellers means more product
selection.More product selection, means a better Customer Experience (“they have everything!”).
With these four elements feeding the growth of the platform, you now have economies of scale. Meaning
lower cost structure, leading to lower prices, which again ultimately will feed the growth cycle by
offering customers the best Customer Experience.
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SWOT Analysis:
Strengths: Amazon’s strengths lie in its strong brand recognition, diverse product offerings, and
innovative capabilities. Its brand is synonymous with online shopping, and its diverse product offerings
cater to a wide range of customer needs. Moreover, Amazon’s culture of innovation has enabled it to stay
ahead of the curve and continuously offer new and improved products and services.
Weaknesses: Despite its many strengths, Amazon also has some weaknesses. One of the main criticisms it
faces is related to its labor practices. There have been numerous reports of poor working conditions in its
warehouses, which have led to protests and lawsuits. These controversies could potentially harm
Amazon’s reputation and customer trust.
Opportunities: Amazon has significant opportunities for expansion into new markets and technologies.
With its strong financial position and innovative capabilities, it is well-positioned to explore new business
areas and capitalize on emerging trends.
Threats: Amazon faces threats from regulatory challenges and intense competition. Regulatory bodies
around the world are increasingly scrutinizing the practices of tech giants like Amazon, which could lead
to fines or restrictions. Moreover, the e-commerce market is highly competitive, with numerous players
vying for market share.
Sustainable Development
Amazon is known for its sustainable development
initiatives that promote a three-tiered approach:
environmental protection, social responsibility and
economic progress. Amazon acknowledges the role it
must play in global challenges like climate change and
resource depletion plus social inequality; as a result, it
has integrated sustainability into its daily operations by
developing strategies that aim to see sustainability play a
key role in its supply chain.
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A significant goal of Amazon is to reach carbon neutrality before 2040a goal achieved earlier than even
what was set by the Paris Agreement. This is why Amazon has initiated several renewable energy projects
like constructing solar or wind farms, which will provide power for data centers, fulfillment centers and
delivery work. Moreover, 100,000 electric delivery vans will be purchased to reduce emissions from
transportation fleets.
Amazon is determined to minimize the amount of waste produced and put it into a circular economy. The
Frustration-Free Packaging and Shipment Zero ventures are among company’s several initiatives that aim
at eliminating unnecessary materials for packaging, lessening wastage while enhancing the recyclability
of packages. It also commits resources in the development of innovative recycling technologies as well as
sustainable materials for the development of more green packaging solutions.
Moreover, amazon values sustainability and responsible sourcing all along its supply chain. Amazon
works with its suppliers to promote fair labor practices, protect human rights and ensure environmental
compliance. Amazon has standards in place for evaluating supplier performance on environmental and
social issues through its Sustainable Sourcing Program; moreover it actively collaborates with
stakeholders for continual improvement of supply chain sustainability.
Statista shows that eCommerce revenue in Africa will hit $46.1 billion by 2025. While that figure is
significant growth from the $22 billion revenue recorded in 2021, it still pales in comparison to the $960
billion in eCommerce sales in the US alone.
In the Q4 of 2021, Amazon made net sales of $137.4 billion, a 9% increase from $125.6 billion in Q4
2020. By Q3 2022, its net sales increase was down by 2%. It recorded $121.2 billion in 2022, a 7%
increase from $113.1 billion in Q2 2021. With Amazon's revenue growth rate reducing, the eCommerce
giant is expanding into more markets to increase its stock prices. The company recently had its biggest
one-day stock price drop since 2006. Does this mean the growth rate of the US and other developed
markets has peaked? This could be the case as Amazon has also been dialling back on growing parts of its
retail business in the US. While it’s also ramping up hiring from Nigeria and South Africa, it is slowing
things down in the US. While Amazon is vying for a piece of the African eCommerce market, it has local
players such as Jumia, Konga, Takealot and Everyshop to contend with. nterestingly, Takealot CEO
Mamongae Mahlare told MyBroadband, that Amazon's foray into Africa's eCommerce market shows that
the current local players have built an "
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Major Risks Faced by Amazon.com Inc.
➢ Intense Competition.
➢ High Government Restricts & Regulations.
➢ Experience Significant Fluctuations in Our Operating Results and Growth Rate.
➢ May Not Be Successful in Efforts to Expand into International Market Segments.
➢ Not Successfully Optimize and Operate Fulfillment Centers, Business Could Be
Harmed.
➢ May suffer if the company are Unsuccessful in Making, Integrating, and Maintaining
Commercial Agreements, Strategic Alliances, and Other Business Relationships.
➢ Have Foreign Exchange Risk.
➢ Loss of Key Senior Management Personnel Could Negatively Affect Business.
➢ Face Risks Related to System Interruption and Lack of Redundancy.
➢ We Face Significant Inventory Risk.
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Rerferences:
1. Amazon’s Global Economic Impact and Tax Contribution1.
2. Economic Growth - About Amazon2.
3. E-Commerce Can Boost Job Creation and Inclusive Growth in Developing Countries - World
Bank3.
4. World Bank approves First Amazon Fiscal and Environmental Sustainability Program4.
5. Economic Growth - About Amazon India5.
6. The Role of E-Commerce in Promoting Inclusive Trade in Developing Countries - UNCTAD.
7. Amazon’s Investment in Infrastructure and Its Ripple Effect on Economic Development.
8. The Impact of Amazon’s Supply Chain on Emerging Markets.
9. Amazon Web Services (AWS) and Its Economic Contribution to Developing Nations.
10. The Influence of Amazon Prime and Digital Streaming on Global Markets.
11. Amazon’s Approach to Innovation and Its Effects on Local Economies.
12. The Significance of Amazon Marketplace for Small and Medium Enterprises in Developing
Regions.
13. Amazon’s Technological Advancements and Their Implications for the Global Economy.
14. The Environmental and Social Governance (ESG) Initiatives of Amazon in Developing
Countries.
15. The Future of Work: How Amazon’s Automation and AI Technologies Are Shaping Employment
in Developing
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