Group C
Howard Chow
Brian Devlin
Benjy Finkel
Brett Paterno
Henry “Hank” Frank

INTRODUCTION
 History
 Retail Strategy
 Retail Mix
 Problems

HISTORY
• Started in 1995 as an online book store
• Strategically placed in Seattle (Silicon Valley)
• IPO May 15,1997
• First online “book store”
• Eventually started selling DVDs, music CD's, computer software, hardware, video games, electronics, toys, furniture, apparel and much more
• Acquired Zappos in 2009

COMPETITIVE ANALYSIS
• At first competitors were just Barnes and Noble and Borders
• Nook Vs. Kindle
• Now threats include places like Wal-Mart, and eBay
• Market Price vs. Auction Price
• In store convenience vs. at home convenience

STORE DESIGN
• Easy-to-use website
• Headquarters in Seattle and
Luxembourg City
• Warehouses located near major airports
• Software Development Centers

PRODUCT OFFERINGS
• “World’s Largest Bookstore”
• Private Labels:
• Pinzon
• Amazon Basics
• Amazon MP3
• Amazon Fresh
• Amazon Unbox
• Amazon Web Store
• Amazon App Store

TARGET MARKET
• Demographically
• Male or Female
• Ages of 18-50
• Any race
• Income from lower middle class to upper class
• Must have a computer or smart phone to access internet
• Customers who know what they want and how much they want to spend

RETAIL FORMAT
• Pure Play E-Tailer
• Convenient online shopping; Open 24/7
• One of the world’s largest
• Pricing depends on product and brand
• Ranges from moderately priced to expensive high end products
• Extremely wide range of products
• Internet website with visual merchandising
• Customer friendly and easy to navigate
• Strategy : Serve customers conveniently with the best quality products at an affordable cost and the quickest way possible

COMPETITIVE ADVANTAGE
• Amazon Prime
• Dynamic Pricing
• Personalized Service
• Huge product assortment
• Innovation (one-click-ordering)
• Successful online retail leader since 1994

MERCHANT QUALITY CONTROL
• Independent 3 rd party merchants selling products
• Discrepancies in price, quality, shipping
• Can reflect poorly on Amazon’s reputation

MERCHANT QUALITY CONTROL
• Example:
• A customer wants a tricycle, but wants it in a specific color
• Base product sold for $83.99 with standard shipping
• Color not offered by Amazon, so customer must buy from Amazon Merchant

MERCHANT QUALITY CONTROL
• Example Continued
• Given the following options:
• Consequences
• Higher prices
• Confusing shipping options
• Varying shipping times
• Indefinite product quality
• Less appealing customer experience

SOLUTIONS TO THE PROBLEM
• Price match guarantee
• Shipping guarantee
• Satisfaction guarantee
• Amazon Quality Supervisors

AMAZON & PUBLISHERS

AMAZON & PUBLISHERS
• $10 price point
• Publishers fighting back
• Backed by Apple
• Agency Model
• Over wholesale model

RECOMMENDATIONS
• End the conflict
• Market penetration strategy is dangerous
• Selling below cost not very smart (eBooks, Kindle Fire, etc.)
• Public image
• Lawyer/Court Costs
• Price Point
• $25 → $17.81
← $10
• Price sensitivity analysis
• Kindle Sales doing great
• Book industry vs Music industry
• Pursue authors
• Give publishers share of Kindle sales

MISC. RECOMMENDATIONS
• Physical Stores with full multi-channel integration
• Too many markets/products
• Expand on existing projects before taking on new ones

QUESTIONS