Table of Contents

1. INTRODUCTION...............................................................................................................................4
2. BUSINESS STRATEGY.....................................................................................................................4
2.1. Amazons Global Market Strategy.....................................................................................................4
2.2. Amazon Prime Video.......................................................................................................................6
2.3. Machine learning AT Amazon..........................................................................................................7
2.4. Product recommendations.................................................................................................................8
3. The Effect of Price On E-Commerce Platforms: Statistical Evaluation Of Amazon's Pricing Strategy
9
3.1. Background......................................................................................................................................9
3.2. Pricing Strategy and Sales................................................................................................................9
4. TECHNOLOGY..................................................................................................................................9
4.1. Amazon Web Services......................................................................................................................9
4.2. Smart Home – A New Marketing Era.............................................................................................11
4.2.1: Smart Home Outline....................................................................................................................11
4.2.2: Smart Home Categories...............................................................................................................12
4.2.3: Smart Home Development...........................................................................................................12
5. References:........................................................................................................................................13

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Figure 1: Amazons Global Market Strategy – Assignment Help....................................................4
Figure 2: Amazon FBA - AMZSouct.............................................................................................4
Figure 3: Amazon prime video - Amazon.......................................................................................5
Figure 4: Amazon Global Retail Revenue - BI Intelligence............................................................6
Figure 5: Machine learning AT Amazon – AWS............................................................................6
Figure 6: Amazon web services - AWS..........................................................................................9
Figure 7: Amazon Alexa - Amazon...............................................................................................11
Figure 8: Alexa home smart - Amazon..........................................................................................12

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Table 1: Amazon Prime Video Services - Business wire.............................................................................6
Table 2: Amazon Web Services.................................................................................................................10

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 1. INTRODUCTION
Starting as an online bookstore in 1995, Amazon.com Inc. (hereinafter “Amazon”) has grown to be
the world’s largest online retailer, operating more than 361 fulfillment centers, Prime Now hubs,
and other facilities in 14 different countries as of January 2017. It sells almost everything from
electronics to baby and beauty products to gardening tools to music and videos, among vast others
(Hahn, Kim and Youn, 2018). Despite the ups and downs and the misgivings of the Wall Street
throughout the years, Amazon and its founder Jeff Bezos have insisted on the three criteria that
“revolve around the customers and their demands: The best selection, the lowest prices, and cheap,
convenient delivery options”. It is now no secret that Amazon has revolutionized the online retailing
business and delivery systems around the world. Amazon’s success has never been recognized by
three criteria that were identified by its CEO because many researches associated with e-commerce
and e-business heavily focused on websites and customer services through technology instead of
other variables that could be measured in physical retail industry.

While “gauging its strategy county-by-country with the goal of securing capacity and increasing
customer convenience”, Amazon has changed the game of the e-tailers by first launching the same-
day delivery service, soon followed by one-hour delivery service in major U.S. cities and even a
Wi-Fi-connected Dash buttons for immediate re-ordering of select products, making it a “when-I-
want-it and where-I-want-it” delivery service for its customers (Lierow, Janssen and D’Inca, 2016).
In order to accomplish this feat, Amazon has not only partnered with several delivery companies
and acquired its own fleet of trucks, but also developed an app called Amazon Flex, which registers
private drivers and matches them for an Uber-like delivery service for packages.

2. BUSINESS STRATEGY

2.1. Amazons Global Market Strategy

Amazon’s business has been a successful model in the e-commerce industry (Müller et al.,
2016). It is catering over several countries across the globe past two decades. It has encountered
several challenges like that of borderless economies, building trust and brand, personalization
and ease of use and technology. However foreseeing opportunities and trying to build its market
share over a period it has adopted several strategies globally for its sustenance. The e-commerce
giant Amazon launched Prime in Mexico in March, providing free one-day shipping in four of
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the largest cities in the country, and free two-day shipping to the rest. Amazon Prime is reaching
saturation in the United States, as approximately 65% of US households have Prime
memberships, according to Business Insider Intelligence estimates based on data from CIRP and
the US Census Bureau (Jamnan, 2018). Although there is still room for Amazon to expand Prime
in its domestic market, growth is likely to slow significantly as more of the population joins the
membership program (Chua and Cox, 2023). In contrast, Amazon has only recently made
headway internationally, so there is huge potential to expand Prime in other markets (Kumar,
2024). Users get the benefit of one-day delivery, no rush delivery, delivery updates, etc.

Benefits of owing Prime service

Figure 1: Amazons Global Market Strategy – Assignment Help

Acquisitions in Middle East- Amazon in the Middle East plans to acquire a major e-commerce
player namely, www.souq.com. Key strength on which it claims is its shipping expertise and its
strong presence in diverse regions of Middle East (Lenze and Schriwer, 2016). This would in
turn give Amazon a strong competitive advantage and can accelerate it business operations faster
rather than starting from the scratch (Bagnoli et al., 2022).

Amazon sees its Fulfillment by Amazon (FBA) service as a major component to its success in
foreign markets (Krey, 2022). The company has seen strong global growth in its fulfillment
service especially for sellers - 40% year on year in 2016 - indicating that FBA may be a critical
advantage to draw sellers to its marketplace. This may be especially true in countries with less-
developed infrastructure, such as India and Mexico. In India it competes against Flip kart and
Snap deal who also embark on warehousing and logistical services (Hussan and Faisal, 2023).
However, Amazon has created one of the most advanced fulfillment networks in the world.

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 Figure 2: Amazon FBA - AMZSouct
Here a seller could avail services like storage of products in Amazon's fulfillment centers, sort,
pack, collect, deliver, customer support and accomplish the product returns. FBA is one its
unique service offered to sellers who wish to display their products onto the Amazon platform
(White, 2024). It helps increase seller’s online sale by giving access to Amazon’s world-class
fulfillment resources. When a seller joins FBA, offers become more visible and more
competitive; products become eligible for One Day Delivery, Free Delivery options which
enable the seller an access to millions of Amazons loyal customers (Weigel, 2023). It also gives
an opportunity to compete for the Buy Box which appears with the “Add to Cart” option when
customers click on a product they wish to buy. In a recent Amazon survey done in 2014 among
FBA Sellers in India, 86% reported enjoying a sales increase after they started using FBA (Make
money, grow fast and delight customers, 2018) (Wells, Danskin and Ellsworth, 2018).

2.2. Amazon Prime Video

Amazon prime Video is an internet video on demand services offered by Amazon (Song, 2021).
It include4s television shows, access to latest Bollywood and Hollywood movies, etc on rent or
purchase. In India it is offered as a complimentary if one subscribes for Amazon Prime.
Table 1: Amazon Prime Video Services - Business wire

Country Description of Amazon Video service

United States Here users can avail services of Prime Video through a video-only
membership. This avoids the users from enrolling it to a full Prime
service subscription unlike some other countries wherein offers are
bundled and mentioned as complimentary services.
France and Italy Here users are given the access to services of Amazon like prime video
only through a dedicated website and not through the official website
of Amazon.
United States& UK Amazon Video additionally offers Amazon Channels, which allows
viewers to subscribe to other network's original content, including
HBO in the United States.
UK, Germany, Prime Video has been available on a monthly subscription of £5.99 or
Austria € 7.99 per Month.
Norway, Denmark, Services to these was previously available however it has been

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 Sweden discontinued since 2013

US Amazon split Prime Video from Amazon Prime in the US for $ 8.99
per month in 2016
Worldwide (except Amazon Video launched worldwide expanding its reach beyond US,
for Mainland China, UK, Germany, Austria, and Japan except for Mainland China, Iran,
Iran, North Korea, North Korea, Syria
Syria)

Figure 3: Amazon prime video - Amazon

Amazon’s marketplace in India is one of the fastest-growing in the country (Bidkar, 2019). It's
one of the most visited sites, and its app engagement - a key metric as mobile devices are the
primary channel for online purchasing in India - grew 46% YoY in Q1. Amazon expanded its
fulfillment capacity in India by 26% during the quarter, and its product offerings are up 75%
since its launch in August 2016. Amazon global retail revenue has been growing at rapid pace
since 2012 until Q1 2017 (Watanabe, 2022).

Figure 4: Amazon Global Retail Revenue - BI Intelligence

2.3. Machine learning AT Amazon
Amazon has been a pioneer in Artificial Intelligence (AI) and Machine Learning (ML); early
application of collaborative filtering for product recommendations and Jeff Bezos’ letter to
investors in 2010 mentioning “Random Forests” are two milestones in this journey (Rastogi,
2018). As Amazon has rapidly grown and diversified in the past decade, the business has relied
heavily on Machine Learning systems to improve customer experience and scale operations
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through automation. Today, we apply Machine Learning techniques to a wide range of problems
at Amazon such as product demand forecasting, product search, online advertising, and product
classification, information extraction from reviews, voice recognition, conversational systems,
and robotics.

Figure 5: Machine learning AT Amazon – AWS

2.4. Product recommendations

Amazon has been a pioneer in product recommendations – we proposed collaborative filtering

algorithms way back in the 1990’s. Amazon product pages feature two popular widgets:
“Customers who bought this also bought” and “Customers who viewed this also viewed” – these
widgets are powered by highly scalable data mining algorithms that compute products that are
frequently purchased together and frequently viewed together, respectively. We also learn
customer preferences from their browse and purchase history, and recommend products to
customers that match their preferences (Yuan, 2024). A specific recommendation problem is to
recommend the product size that would best fit a customer when the customer visits a product
page. The motivation for this is that in categories such as Shoes and Apparel brands have
different sizing conventions (van de Kamp, 2022). For example, a catalog size 6 corresponds to a
physical size of 15cm for Reebok while for Nike a catalog size 6 corresponds to a physical size
of 16cm. This leads to customers buying wrong product sizes or buying multiple product sizes
and then returning the ones that don’t fit. We have developed Machine Learning algorithms that
leverage past customer purchase and returns data (e.g. product size was too large/small) to infer
the best product size for the customer. Specifically, we propose a novel approach based on a
Bayesian logit regression model with ordinal categories {Small, Fit, Large} to model size fits as
a function of the difference between latent sizes of customers and products. We propose
posterior computation based on mean-field variational inference, leveraging the Polya-Gamma
augmentation for the logit prior that results in simple updates enabling our technique to
efficiently handle large datasets. Our Bayesian approach effectively deals with issues arising
from noise and sparsity in the data providing robust recommendations. Offline experiments with

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real-life shoe datasets show that our model outperforms the state of the art in 5 of 6 datasets and
leads to an improvement of 17-26% in AUC over baselines when predicting size fit outcomes
(Sembium, 2018).

3. The Effect of Price On E-Commerce Platforms: Statistical Evaluation Of Amazon's

Pricing Strategy

3.1. Background
With the growth of the Internet and electronic devices in recent years, online retail platforms
have experienced significant development in many aspects. More and more people like to browse
and buy what they want through e-commerce platforms (Galhotra, and Dewan, 2020). According
to Jap et al. (2022), in 2020, some famous online marketplaces such as Amazon, Taobao, and T-
mall earned $2.7 trillion in global sales, which held the majority of global online sales of that
year. Besides selling things, Amazon has entered even more different areas these years, such as
education. All of this shows that e-commerce platforms like Amazon have already become a
substantial part of the global economy (Wu and Gereffi, 2018).

3.2. Pricing Strategy and Sales

A linear regression model will be generated through Excel. The independent variable is the
pricing strategy, which determines whether the product is discounted. It is a dummy variable that
was created for non-quantitative classification (Constand, Clarke and Morgan, 2018). If the
present price is greater or equal to the original listed price, it is considered to have no discount
(i.e., discount equals 0). Otherwise, if the current price is smaller than the primary one, a
discount was implemented and could be represented by 1. The response variable is the number of
sales in September 2023 collected from Amazon.com. This model aims to find the relationship
between price discounting activity and sales volume (Nagadeepa, Selvi and Pushpa, 2015).

4. TECHNOLOGY

4.1. Amazon Web Services

In 2006, Amazon Web Services (AWS) began offering IT infrastructure services to businesses in
the form of web services -- now commonly known as cloud computing (Mathew and Varia,
2014). One of the key benefits of cloud computing is the opportunity to replace up-front capital
infrastructure expenses with low variable costs that scale with your business. With the Cloud,
businesses no longer need to plan for and procure servers and other IT infrastructure weeks or
months in advance (Ross and Blumenstein, 2015). Instead, they can instantly spin up hundreds or
thousands of servers in minutes and deliver results faster. AWS provides a highly reliable,
scalable, low-cost infrastructure platform in the cloud that powers hundreds of thousands of
businesses in 190 countries around the world.

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 Figure 6: Amazon web services - AWS
With data center locations in the U.S, Europe, Brazil, Singapore, Japan and Australia, customers
across all industries are taking advantage of the benefits of Low Cost, Instant Elasticity,
flexibility to launch your application regardless of your use case or industry, Secure. Amazon
markets AWS to subscribers as a way of obtaining large scale computing capacity more quickly
and cheaply than building an actual physical server farm. AWS comprised more than 90 services
spanning a wide range including computing, storage, networking and tools for Internet of Things
(IOT).

Global Presence Amazon has made a strong foot presence in various countries throughout the
globe. It has been expanding its operations catering to diversified needs and wants coming from
different regions like that of in Asia, South East Asia, Europe, North America and South
America. This gives Amazon a wide global exposure, and delivers quality services. Following
table indicate the Amazons presence in global foot print.
Table 2: Amazon Web Services

Region Sovereignty Domain Name Operation Since

Asia China amazon.cn September 2004
India amazon.in June 2013
Japan amazon. co. jp November 2000
South East Asia Singapore amazon.com.sg July 2017
Europe France amazon.fr August 2000
Germany amazon.de October 1998
Italy amazon.it November 2010
Netherlands amazom.nl November 2014
Spain amazon.es September 2011
United amazon.co.uk October 1998
Kingdom
North America Canada amazon.ca June 2002
Mexico amazon.com.mx August 2013
United States amazon.com July 1995
Oceania Australia amazon.com.au November 2013
South America Brazil amazon.com.br December 2012
Source: https://en.wikipedia.org/wiki/Amazon_(company)#Website

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4.2. Smart Home – A New Marketing Era
“Hey, Alexa!”, “Ok, Google!” – Commands like these already underline the immense impact of
the Smart Home industry on consumers’ minds and business marketing activities. A Smart Home
provides several benefits and improvements to the life of consumers – especially from a
convenience point of view. In terms of business perspective, Smart Home products including
Smart Speakers pose serious challenges for marketers as it is primarily Smart Homes change the
entire customer journey. Secondly, Smart Speakers significantly shorten the customer journey.
At the same time, together with the rise of Smart Speakers, audio branding and voice profiling
have become progressively important. As a result, in order to remain competitive in upcoming
eras businesses are forced to reconsider their advertising activities. Smart Speaker providers
already integrate ads into music streaming as well as into news sections. Purchasing is aided
through socalled proprietary ‘skills’ or ‘actions’. In order to market Smart Home devices more
effectively, brands will be dependent on Amazons’ sheer abundance of products as well as on
Google’s advertising power. This article presents an assessment of the positive and negative
aspects of the current Smart Home market. Furthermore, information on the development of the
Smart Home market and where it is to be located within the marketing mix is provided. Lastly,
the paper gives a future outlook of Smart Home development and prospects.

Figure 7: Amazon Alexa - Amazon

4.2.1: Smart Home Outline
Smart Homes are a newly emerging business field. A Smart Home is a home setup where
different appliances and devices are simultaneously interconnected with each other and with the
internet. Users can remotely control any device from any location by using mobile internet-
enabled devices. Consequently, Smart Home owners have new and infinite possibilities to
control their homes as long as they have access to the internet. From a semantic point of view,
the term Smart Home is considered the umbrella term for home automation or domotics. The
term domotics refers to the Latin word domus meaning home. In 2018, the global Smart Home
market had a volume of $56 billion. According to the Statista forecast, it will grow by 22.3
percent to a predicted market capitalization of $153 billion by 2023.

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4.2.2: Smart Home Categories
Smart Home devices are integrated into the living environment and are characterized by a
diversity of functions. Simplified, the scope of application divides Smart Home devices into six
segments: Smart Appliances, Control and Connectivity, Security, Home Entertainment, Comfort
and Lighting, and Energy Management. In this article, Control and Connectivity will be the
predominant focus. It embraces all aspects corresponding to the equipment of connected and
remote-control devices and services that are part of an intelligent home network, including Smart
Speakers, central control and communication units, programmable control buttons and smart
plugs. With Smart Speakers, it is possible to merge the control of all smart devices into one. In
addition to consolidating control, Smart Speakers paved the way for the usage of voice as a
human interface method.

Figure 8: Alexa home smart - Amazon

What is more, communication is no longer unilateral but bilateral, as Smart Speakers make it
possible to communicate with the consumer real-time. Smart Speakers represent a new
technology enabling homeowners to talk to their homes, and with the home responding to
commands and requests immediately. It is obvious that the advantages of voice interaction lie in
the imitation of natural human behavior, allowing brands to aim for automated, natural
communication with consumers through the use of smart home devices. In other words, Voice
provides consumer engagement paired with new brand touch points by taking advantage of the
emotional benefit and thus, will transform the overall marketing environment. In conclusion,
Voice Assistants will play a crucial role in Smart Home Development.

4.2.3: Smart Home Development

The rapid development of the Smart Home sector owes to the ongoing technological
advancements of the mobile internet and to a steep decline in sensor costs. These decreasing
costs reciprocally result from advances in the miniaturization of sensors, embedded processors
and wireless technologies. A prosperous future for the Smart Home sector can be predicted, as
technological advances and the success of home automation are seamlessly interconnected as
well as inter-dependent.

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 5. References:

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Bidkar, S.V., 2019. Paradigm shift in e-commerce-a case study of amazon. Sumedha Journal of
Management, 8(3), pp.489-496.

Chua, C. and Cox, S., 2023. Battling the Behemoth: Amazon and the Rise of America's New
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Constand, R.L., Clarke, N. and Morgan, M., 2018. An analysis of the relationships between
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Kumar, N., 2024. Clash: Amazon vs Walmart. Penguin Random House India Private Limited.

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