e-Business

Strategies:
Amazon
By: Abhishek Bhardwaj
Amazon’s Evolution Timeline

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Amazon's evolution from an online bookstore to a Continued Diversification and
diversified e-commerce giant is a testament to its
visionary leadership, strategic acquisitions, and Dominance
relentless pursuit of innovation. 2016-Now the acquisition of Whole Foods, surpassing 100 million Prime
subscribers, launching Prime Video, and introducing Amazon
By continuously expanding its ecosystem, leveraging Pharmacy.
acquisitions, and adapting to emerging trends,
Amazon has redefined the retail landscape and
reshaped the way we shop, consume content, and
Further Expansion and Innovation
interact with technology. During 2011-2015, Amazon expanded with the launch of the Amazon
2011-15 Appstore, acquired Twitch for $970 million, introduced Amazon Echo
with Alexa voice assistant, and launched Amazon Prime Music for
ad-free streaming of millions of songs.

Innovation and Strategic Acquisition

2006-10 During 2006-2010, Amazon innovated with Amazon Elastic Compute Cloud
(EC2), launched the Kindle e-reader, acquired Zappos for $1.2 billion, and
established Amazon Studios for original content production.

Diversification and Expansion

2001-05 From 2001 to 2005, Amazon diversified with the launch of AWS, introduced Amazon
Prime for free two-day shipping, and acquired IMDb for expansion in entertainment.

Establishing the Foundation

1994-2000 From its founding by Jeff Bezos in 1994 as an online bookstore in his garage to its IPO in 1997, Amazon rapidly
expanded its offerings, including music and movies by 1998, introducing the "Amazon Marketplace" in 1999 for
third-party sellers, and launching Amazon.com Auctions in 2000, albeit unsuccessfully, to compete with eBay.
The Dot Com Bubble
• The Dot-com Bubble, also known as the
Internet Bubble or the Dot-com Boom, refers
to a period of speculative frenzy in the late
1990s and early 2000s, characterized by the
rapid rise and subsequent collapse of
internet-related stocks and companies. It was
fueled by the proliferation of internet-based
businesses, soaring stock prices, and investor
exuberance surrounding the potential of the
internet to revolutionize commerce and
communication.
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Impact of Dot Com Bubble on Amazon
• Boom Period (Late 1990s): Amazon's stock price soared during the dot-com
bubble, reaching highs of over $100 per share.
• Bubble Burst (2000-2002): The dot-com bubble burst led to a significant downturn
in the stock market, impacting many internet-based companies, including Amazon.
• Impact on Amazon: Despite facing losses and skepticism from investors, Amazon
survived the dot-com crash by focusing on long-term growth and diversification. It
emerged as one of the few dot-com companies to survive and thrive in the
aftermath of the bubble burst.
• Strategic Adjustments: During the downturn, Amazon implemented cost-cutting
measures, diversified its product offerings, and focused on improving operational
efficiency to weather the storm.

Date Your Footer Here 5

Key Acquisitions and
Strategic Expansion

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Audible (2008) Twitch (2014) Whole Foods Market
(2017)
Acquiring the audiobook service Acquiring the live streaming
Audible for $300 million platform Twitch for $970 million
enhanced Amazon's content diversified Amazon's Amazon's $13.7 billion acquisition of
offerings, providing customers entertainment offerings, tapping Whole Foods Market signaled its
with access to a vast library of into the booming gaming and entry into the grocery industry,
audiobooks and podcasts, esports market and enhancing combining e-commerce with
further enriching the Prime its Prime subscription service. brick-and-mortar retail and
membership. strengthening its foothold in the
food sector.

Zappos (2009) Alexa (2014) Ring (2018)

Amazon's acquisition of the Amazon's acquisition of the Amazon's acquisition of the
online shoe retailer Zappos for voice technology startup that smart home security company
$1.2 billion expanded its developed the Alexa virtual Ring for $1 billion bolstered its
presence in the footwear and assistant laid the foundation for presence in the Internet of
apparel market while gaining its foray into smart home Things (IoT) space,
access to Zappos' renowned devices and voice-enabled complementing its Echo devices
customer service and company services, revolutionizing the way and expanding its ecosystem of
culture. people interact with technology connected home products.
in their homes.
Impact and Influence
• These strategic acquisitions diversified Amazon's revenue
streams, expanded its product and service offerings, and
reinforced its position as an industry innovator.
• By integrating acquired companies into its ecosystem and
leveraging their expertise, technology, and customer
base, Amazon accelerated its growth and market
dominance across multiple sectors.
• The expansion into new markets and industries enabled
Amazon to create synergies between its various business
segments, driving customer engagement, loyalty, and
satisfaction.

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Revenue Models

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 Retail Sales
1 Amazon earns revenue from direct sales of both physical and digital goods on its platform, encompassing items
like books, electronics, household goods, e-books, music, and movies, available from both Amazon and
third-party sellers on the Marketplace.

Subscription Services
2 Amazon offers subscriptions (Prime, Music Unlimited, Kindle Unlimited) with benefits like free shipping,
music/ebook access, and discounts for recurring revenue.

Third-party Seller Services

3 Amazon lets other sellers use FBA (Fulfillment by Amazon ) to sell on their platform (for a fee). This
benefits both Amazon (more revenue) and sellers (wider reach).

Digital Advertising
4 Amazon offers sellers advertising tools to target potential customers (based on searches,
demographics etc.). Sellers pay for clicks or impressions, generating revenue for Amazon.

Amazon Web Services

Amazon Web Services (AWS) is Amazon's cloud empire. It rents out computing power, storage, and
5 databases like a virtual utility. You only pay for what you use, making it scalable and cost-effective. AWS is
a major moneymaker for Amazon.

Physical Stores
6 Amazon's venturing into physical stores with Whole Foods and Amazon Go lets it capture in-person
sales of groceries, prepared food, and more.

Content and Media

Amazon goes beyond just online shopping. They create shows (Prime Video), sell digital media (e-books,
7 audiobooks), and even have physical media (DVDs) for sale.
The Marketing Machine:
e-Campaigns

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Understanding the Indian Market

• Building trust: Cash on Delivery (COD)

remains a preferred payment method for
many Indian consumers. Amazon addressed
this by offering COD as a standard option,
building trust and encouraging online
purchases.

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• Local languages: Catering to India's diverse
linguistic landscape, Amazon made its
platform available in multiple regional
languages, increasing accessibility and user
comfort.
• Focus on Value: Understanding the
price-sensitive nature of the Indian market,
Amazon offers competitive pricing, frequent
deals, and special promotions to attract
budget-conscious consumers. Source: Amazon Advertisement

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The Apni Dukaan Campaign
• Concept: "Apni Dukaan" translates to "Our
Shop" in Hindi. This campaign leveraged the
familiar concept of the local neighborhood
store, fostering a sense of warmth, trust, and
convenience associated with online shopping
on Amazon.
• Execution: Heartwarming ads depicted
relatable scenarios where families discover
the ease and benefits of shopping online with Courtesy: Economic Times
Amazon. This emotional connection
resonated deeply with Indian audiences.

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The Great Indian Festival and Other
Sales
• Leveraging Festivals: Major Indian festivals
like Diwali and Dussehra are prime
shopping seasons. Amazon capitalizes on
this by hosting the "Great Indian Festival,"
offering mega discounts and deals,
attracting a massive online shopping surge.
• Independence Day Sale: Patriotic fervor
runs high during India's Independence
Day. Amazon taps into this sentiment with
special sales and promotions, fostering a
sense of national pride while driving sales.

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Courtesy: Business-standard.com

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Challengers to the Throne

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Flipkart
• Deep Market Understanding: Founded in India, Flipkart
possesses a potentially deeper understanding of the
Indian market's cultural nuances and consumer
preferences. This can translate into:
• Product Selection: Flipkart might offer a more relevant
product selection that caters to local tastes and needs.
• Marketing: Flipkart's marketing campaigns might resonate
better with Indian audiences due to cultural context.
• Shopping Experience: Flipkart might tailor the shopping
experience to be more culturally relevant for Indian
consumers.

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The Cut Throat Marketing Championship
• "Ab Har Ghar Diwali" (Diwali in
Every Home): This campaign
focused on affordability and
inclusion during the festive season
of Diwali. Flipkart offered
significant discounts and deals
across various product categories,
making festive shopping accessible
to a wider audience. Courtesy: YouTube

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• "Big Billion Days" (The Big Billion
Sales): Similar to Amazon's "Great
Indian Festival," this is Flipkart's
flagship sale event, occurring
around Independence Day in
August. It features massive
discounts, deals, and special offers
to attract a surge in online
shopping during this period.

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 TRENGTHS
Brand Power
Globally recognized brand synonymous with online
shopping, fostering trust and customer confidence.
Selection and Innovation
Vast product selection across categories and constant
innovation in technology and features.
Delivery and Loyalty
Robust delivery network ensures fast deliveries, while
Prime membership incentivizes loyalty and increases
basket sizes
Data Analytics
Amazon leverages vast amounts of customer data to
personalize the shopping experience, optimize pricing
and advertising, and manage inventory efficiently.
 EAKNESSES
Price Perception
While Amazon offers competitive prices, they might not
always be perceived as the most budget-friendly option
compared to some competitors.

Focus on International Brands

Amazon's product selection might sometimes favor
established international brands over local Indian brands.
This could be a disadvantage in a market that values
domestic products.

Counterfeit Issues
Counterfeit products have been a concern on Amazon's
platform in some regions. This can damage brand
reputation and customer trust.
 PPORTUNITIES
Growth in Tier 2 and Tier 3 Cities
The Indian e-commerce market is expanding rapidly in Tier 2 and
Tier 3 cities. Amazon has an opportunity to tap into this growing
market segment by offering localized marketing campaigns and
ensuring efficient delivery networks in these regions.

Focus on Private Labels

Developing a strong private label strategy with high-quality,
competitively priced products can help Amazon cater to
budget-conscious customers and potentially increase profit
margins.

Voice Commerce
The rise of voice assistants like Alexa creates an opportunity for
Amazon to leverage voice commerce and make shopping even
more convenient for users.
 HREATS
Intense Competition
The Indian e-commerce market is highly competitive, with
established players like Flipkart, Myntra, and Snapdeal
constantly innovating and challenging Amazon's
dominance.
Government Regulations
The Indian government frequently implements new
regulations for e-commerce companies, which can impact
Amazon's business model and operations.

Economic Downturn
An economic slowdown in India could lead to decreased
consumer spending, impacting Amazon's sales growth.
References
• Economic Times. (2017, April 11). Amazon seeks to beat anti-foreign cacophony by
politicians and entrepreneurs. Economic Times.
https://economictimes.indiatimes.com/industry/services/retail/amazon-seeks-to-beat-anti-
foreign-cacophony-by-politicians-and-entrepreneurs/articleshow/58154776.cms?from=mdr
• "Amazon (company)." Wikipedia, The Free Encyclopedia. Wikimedia Foundation, Inc.
Accessed (2024, April 26). URL: https://en.wikipedia.org/wiki/Amazon_(company)
• Wikipedia contributors. (2024, April 26). List of mergers and acquisitions by Amazon.
Wikipedia. https://en.wikipedia.org/wiki/List_of_mergers_and_acquisitions_by_Amazon
• Incorporated insights and content from OpenAI's language model, GPT-3.5, developed by
OpenAI, in the creation of this presentation. (This reference is also generated by Chat GPT).
• Google AI, Bard https://ai.google/ (accessed 2024-04-26)

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Thank You.

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