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Amazon.com INC

Presented to: Mr. Zaffar Manan

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Amazon.com

Earths Biggest Book

Store

CEO and Founder Jeff

Bezos

Internet based companies

(Yahoo, Google)

Named After the

mightiest river in the

world

Fast Becoming worlds

Biggest anything Store

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Internal Factors

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Strengths

1. Large customer database.

2. Worlds Biggest Book Store.

3. Efficient Web Browsing.

4. Amazon has proven themselves to be the mostsuccessful retailer online.

5. Enables customers to compare prices across differentproducts being sold by amazon.

6. Product Offering is easily understandable.

7. Customized home pages for website Members.8. Effective promotions and advertisements.

9. Expansion has propelled Amazon.com in innumerabledirections.

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Weaknesses

1. Lack of business skills in all products being

sold.

2. Purchasing items from distributors rather than

manufacturers.3. A huge need of adding values to the online

shopping experience (aesthetics needs).

4. More browsers than buyers.5. Fear of competition is high as there are low

barriers to market entry.

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External Factors

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Opportunities

1. Market size is growing.

2. More things can be easily sold on the internet.

3. More people are willing to buy online.

4. Number of women internet users are growing.

5. Increasing availability of other access channels isproviding more opportunities for customers to shoponline.

6. Increase in acceptance of E-Commerce.

7. Growth in consumer to consumer auctions.

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Threats

1. High competition from direct and indirect sources.2. New entry barriers in the industry.

3. High Taxation possibilities

4. Customer might shop at partner's website for the nextpurchase after the first shopping at Amazon.

5. Threat that retailers will draw back the partnership atthe end of the alliance agreement.

6. Some retailers may get jealous if Amazon promotesone company more than another.

7. Customers still prefer try-and-buy shopping habits forclothing.

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TWOS Strategy

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STRENGTHS WEAKNESS

O

P

PO

R

T

U

N

I

T

Y

SO strategiesWO strategies

T

H

R

E

AT

ST strategies WT strategies

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Internal Factor Evaluation

Matrix

IFE Matrix

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IFE StrengthsINTERNAL FACTORS Weighted Rated TWS

Strengths1 Large customer database. .10 4 .40

2 Worlds Biggest Book Store .10 4 .40

3 Efficient Web Browsing .05 4 .20

4 Amazon has proven themselves to be the

most successful retailer online

.05 3 .15

5 Enables customers to compare prices acrossdifferent products being sold by Amazon

.05 4 .20

6 Product Offering is easily understandable. .05 3 .15

7 Customized home pages for website

Members.

.05 3 .15

8 Effective promotions and advertisements. .05 4 .20

9 Expansion has propelled Amazon.com ininnumerable directions.

.05 3 .15

.55 2.00

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IFE WeaknessINTERNAL FACTORS Weighted Rated TWS

Weakness

1 Lack of business skills in all products beingsold

.05 2 .10

2 Purchasing items from distributors ratherthan manufacturers

.05 1 .05

3 A huge need of adding values to the onlineshopping experience (aesthetics needs).

.10 2 .20

4 More browsers than buyers .05 2 .10

5 Fear of competition is high as there are low

barriers to market entry

.05 1 .20

.45 .65

TOTAL (ST + WK) 1.00 2.65

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External Factor Evaluation

Matrix

EFE Matrix

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EFE StrengthsEXTERNAL FACTORS Weighted Rated TWS

Opportunities1 Market size is growing. .10 .40

2 More things can be easily sold on theinternet

.15 .40

3 More people are willing to buy online .05 .20

4 Number of women internet users are growing .05 .15

5 Increasing availability of other accesschannels is providing more opportunities for

customers to shop online

.05 .20

6 Increase in acceptance of E-Commerce .05 .15

7 Growth in consumer to consumer auctions .05 .15

.55

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EFE WeaknessEXTERNAL FACTORS Weighted Rated TWS

Threats1 High competition from direct and indirect sources .05 2 .10

2 New entry barriers in the industry .05 1 .05

3 High Taxation possibilities .10 2 .20

4 Customer might shop at partner's website for thenext purchase after the first shopping at Amazon

.05 2 .10

5 Threat that retailers will draw back the partnershipat the end of the alliance agreement

.20 2 .40

6 Some retailers may get jealous if Amazon promotes

one company more than another

.

7 Customers still prefer try-and-buy shopping habitsfor clothing

.45 .65

TOTAL (ST + WK) 1.00 2.65

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Strategic position and Action

Evaluation Matrix

SPACE Matrix

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SPACE MATRIX:

FINANCIAL STRENGTHS

5

6

6

5

4

5

4

Total 35

Average 5

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SPACE MATRIX:

COMPETITIVE ANALYSIS RATES

-1

-5

-4

-1

-1

-2

Total -14

Average -2.33

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ENVIRONMENTAL STABILITY RATES

- 4

- 4

- 3

- 3

-2Total - 16

Average -3.20

SPACE MATRIX:

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INDUSTRY STRENGTH RATES

4

5

4

4

2

Total 19

Average 3.80

SPACE MATRIX:

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SPACE MATRIX:

X-Axis :IS + (-CA)

= 3.8 + (-2.33)

= 1.47

Y-Axis :

FS + (-ES)

= 5.0 + (-3.20)

= 1.80

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SPACE MATRIX

I SC A

F S

E S

Aggressive

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SPACE Matrix:

STRATEGIES TO BE

PURSUED

IntensiveStrategies

Integrative

Strategies

Conglomerate

Diversification

ConcentricDiversification

Horizontal

Diversification Combination

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Amazon Growth

Fiscal Year-End December

2004 Sales (mil.) $6,921.1

1-Year Sales Growth 31.5%

2004 Net Income (mil.) $588.5

1-Year Net Income Growth 1,567.1%

2004 Employees 9,000

1-Year Employee Growth 15.4%

Source : www.iwishiknew.com

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Boston Consulting Group

Matrix

BCG Matrix

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BCG Matrix

G

rowth

Rate

Relative Market Share

Low

0.0

High

1.0

Medium

0.5

High+20

Low-20

Medium0

QuestionMark ?

Star *

Cash Cows

Dogs

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Grand Strategy Matrix

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Grand Strategy Matrix

Rapid Market Growth

Quadrant II Quadrant I

Weak Strong

Competitive Competitive

PositionPosition

Quadrant III Quadrant IV

Slow Market Growth

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Strategies From Grand Strategy

Matrix

Market Development

Market Penetration

Product Development Forward Integration

Backward Integration

Horizontal Integration Concentric Diversification

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IE Matrix

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IE MATRIX:

DIVISIONS IFE EFE

Amazon.com 2.65

Others 1.8 2.2

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1.0

1.0

2.0

2.0

3.0

3.04.0

LOW

WEAK

MEDIUM

HIGH

AVERAGESTRONG

EFESCORES

IFE SCORES

Build & Grow

IE - Matrix

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Quantitative Strategic

Planning Matrix

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CP Matrix

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