Description
Amazon.com, Inc. is an American electronic commerce company with headquarters in Seattle, Washington. It is the largest Internet-based retailer in the United States.Amazon.com started as an online bookstore, but soon diversified, selling DVDs, VHSs, CDs, video and MP3 downloads/streaming, software, video games, electronics, apparel, furniture, food, toys, and jewelry.
Presented by:
Amy Kakuk,
Jessica Bourgoin,
and Beth Theriault
April 14, 2005
Outline
?
History
?
Where we Stand Today
?
Vision Statement
?
ission Statements
!
A"t#al
!
Proposed
?
$#siness Se%ments
?
&'ternal A#dit
!
(pport#nities
!
Threats
?
&)&
?
*P
?
+nternal A#dit
!
Stren%ths
!
Wea,nesses
?
+)&
?
atri' Analysis
!
SW(T atri'
!
Spa"e atri'
!
-rand Strate%y atri'
!
$*- atri'
!
+& atri'
?
atri' and SW(T S#mmary
?
)inan"ial .atios
?
/SP
?
Strate%y .e"ommendations
?
&PS0&$+T Analysis
?
)#t#re -oals0(b1e"ti2es
?
Ama3on4 *( in the 5ews
6Ama3on was in"orporated in the state o7 Washin%ton on 8#ly 5, 19944
6$e7ore the "ompany was renamed Ama3on it was "alled *adabra, +n"4
6The "ompany was de2eloped by 8e77 $e3os and two asso"iates in a %ara%e
"on2erted into a shop4
6The "ompany be%an sellin% to the p#bli" in 8#ly 19954
6(n ay 15, 199: the "ompany went p#bli" with an openin% pri"e o7 ;1< per
share4
6+n 1999, the "ompany bo#%ht 4=> o7 dr#%store4"om and la#n"hed it?s own
a#"tion site to "hallen%e e@bay4
6+n 2002, Vir%in &ntertainment -ro#p and Ama3on4"om rela#n"hed
www42ir%inme%a4"om as a "o@branded Web site4
6Also in 2002, Ama3on4"om la#n"hed Ama3on4"a, brin%in% *anadians the
sele"tion, "on2enien"e, and the 2al#e o7 the Ama3on shoppin% e'perien"e4
A little about us…
?
HeadA#arters is lo"ated in Seattle,
Washin%ton4
?
Ama3on?s "ommon sto", is p#bli"ly traded
on the 5ASBA/ #nder AC54
?
(#r web@site address is ama3on4"om
Where we stand today..
Amazon.com, nc. is an internet!based com"any that o##ers
books, music, $ideos, %&%s, electronics, so#tware, toys, $ideo
games, electronic greeting cards, home im"ro$ements, online
auctions, and a $irtual mall called z!sho"s. Amazon has sites in
'rance, Ja"an, (ermany and the )nited Kingdom. %omestically,
Amazon has e*"erienced tremendous growth since its ince"tion.
+owe$er, that growth has not come without a cost. As the world
economy worsens, Amazon #aces "ressure #rom stockholders as
well as the entire #inancial community to realize a "ro#it. Amazon
has created a "lat#orm and customer base that many com"anies
en$y, but can they stay in business long enough to reach
"ro#itability.
,rice and &olume
n#ormation #rom Amazon.com
Recent Price $34.60
Trade Date 04/11/05
52-Week High $54.70
52-Week L! $32."2
#eta $5-%ear& 2.37
Stock Chart (May 2003 – March
2005)
-hart #rom Amazon.com
&ision .tatement /"ro"osed0
To be the largest mass online
merchandiser on earth.
ission Statement
Actual
The "ompany motto: DWor, Hard, Ha2e )#n,
and a,e History4E
The "ompany?s si' "ore 2al#es: "#stomer
obsession, ownership, bias 7or a"tion,
7r#%ality, hi%h hirin% bar, and inno2ation4
Mission Statement
Proposed
Our frst responsibility is to service our worldwide (1)
online customers. (2) We pledge to make every efort
to improve te level o! customer service trougout
te e"commerce industry by using up"to"date
ardware and so!tware (#) and by listening to our
customers. We will ofer customers increased product
selections ($) to !ulfll teir online sopping desires.
We strive to be te most used e"commerce portal on
te World Wide Web (%)& wile conducting operations
in a igly etical (') manner to ensure te long"term
proftability and growt !or sareolders.(() We pledge
to contribute to te economic strengt o! society and
to !unction as an e)ceptional corporate citi*en in all
countries tat we do business. (+) We vow to recruit&
develop& motivate& reward and retain personnel o!
e)ceptional ability& caracter& and dedication. ,n
return& we will provide tem good working conditions&
superior leadersip& sort and long term
compensation& and an opportunity !or individual
growt and employment security.(-)
14 ar,et
24 *#stomer
F4 Te"hnolo%y
44 Prod#"t or ser2i"es
54 Philosophy
=4 Sel7 *on"ept
:4 *on"ern 7or s#r2i2al,
%rowth, and
pro7itability
a"id
=arket
(rowth
2. =arket %e$elo"ment
3. =arket ,enetration
6. ,roduct %e$elo"ment
5. 'orward?Backward?+orizontal ntegration
7. -oncentric %i$ersi#ication
2)= :atrix
.igh
8(#
Med
#
Stars
>omestic
Question Marks
International
Lo!
"(#
Cash Cows Dogs
Hi%h 140 edi#m 450 Iow 040
>elati$e =arket .hare ,osition
ndustry
.ales
(rowth
>ate
&$# to
&$66
-9 7---
7-- Lo!
($# to
($66
he EFE
otal
Weighted
Score
7- 7
-7 Medium
3omestic -nternational )$# to
)$66
--- --
- .igh
&$# to &$66 ($# to ($66 )$# to '$#
:eak Average
Strong
he IFE otal Weighted Score
Internal-External (IE)
Matrix
+old and
=aintain
atri' Analysis and SW(T S#mmary
5lternati&e Strategies -; SPAC; G
For,ard Integration ? ? ? )
2ac-,ard Integration ? ? ? )
8ori9ontal Integration ? ? ? )
:ar-et Penetration ? ? ? )
:ar-et >e&elopment ? ? ? )
Product >e&elopment ? ? ? )
)oncentric >i&ersi%ication ? ? (
)onglomerate >i&ersi%ication ? &
8ori9ontal >i&ersi%ication ? &
?oint 7enture ? &
Retrenchment
>i&estiture
3i@uidation
'inancial >atio Analysis Gar"h 2004H
)ompany Industry Sector S;P *!!
Val#ation .atios
P0& .atio GTTH %%6$%6 '&$#& (5$6# ('$#&
P0& Hi%h @ Iast 5 Krs =A '%$&6 '5$'4 '%$'&
P0& Iow @ Iast 5 Krs =A &%$*6 &*$#6 &*$(*
$eta ($() &$)# #$6* &$##
Pri"e to Sales GTTH )$&* %$'# ($5# )$))
Pri"e to *ash )low GTTH &'%$56 (6$&6 &4$#) &4$)(
Pri"e to )ree *ash )low
GTTH
'5$&( ')$%4 ))$&& (5$64
> (wned +nstit#tions %5$)% *5$&* %#$'5 *'$&6
Bi2idends
Amazon .ector ndustry .@, 7;;
Bi2idend Kield =@A &$&4 ($&' ($#'
Bi2idend Kield @ 5 Kr A2% #$## #$(( &$') &$'5
Bi2idend 5 Kr -rowth .ate =M 4$## "#$56 *$'5
Payo#t .atio GTTH #$## ($&( &%$%' (*$45
Gro!th in 20024
?
.easons ! a%%ressi2e ad2ertisin% 7rom new "ompetitors s#"h as b#y4 *(,
o2ersto",4 *(4
Tar%et the mar,etin% "ampai%n4
?
*osts asso"iated with this strate%y ! in"rease in 7#l7illment "osts and
mar,etin% "osts4 )#l7illment "osts are 10> o7 net sales4 )or the period 200F !
2005, these "osts amo#nt to ;2,0 in"rease in mar,etin% "osts
7or the period 200F @2005 amo#nts to ;20ecommendations and
m"lementation
*on"entri" di2ersi7i"ation ! add new b#t related prod#"ts0ser2i"es4
?
&'ample ! start an online %o#rmet 7ood and be2era%e store #sin% a
wholesaler s#"h as Seattle *ho"olate *o4
?
.easons ! ta,e ad2anta%e o7 brand name re"o%nition and "#stomer loyalty4
?
$e"a#se this strate%y does not in2ol2e any in2entory b#ild@#p, "osts
asso"iated are relati2ely low4
Hori3ontal di2ersi7i"ation ! add new, #nrelated prod#"ts0ser2i"es 7or present
"#stomers4
?
&'ample ! de2elop a sear"h en%ine to "ontrol the path to online mer"hants4
?
.is, ! similar ser2i"es are already a2ailable: Kahoo, -oo%le4
&PS0&$+T Analysis
Recession Normal Boom Recession Normal Boom
EBIT 500,000,000 1,000,000,000 1,500,000,000 500,000,000 1,000,000,000 1,500,000,000
Interest 0 0 0 50,000,000 50,000,000 50,000,000
EBT 500,000,000 1,000,000,000 1,500,000,000 450,000,000 950,000,000 1,450,000,000
Taxes 0 0 0 0 0 0
EAT 500,000,000 1,000,000,000 1,500,000,000 450,000,000 950,000,000 1,450,000,000
# Shares 440,631,579 440,631,579 440,631,579 388,000,000 388,000,000 388,000,000
EPS 1.13 2.27 3.40 1.16 2.45 3.74
Common Stock Financing Debt Financing
Recession Normal Boom Recession Normal Boom
EBIT 500,000,000 1,000,000,000 1,500,000,000 500,000,000 1,000,000,000 1,500,000,000
Interest 15,000,000 15,000,000 15,000,000 35,000,000 35,000,000 35,000,000
EBT 485,000,000 985,000,000 1,485,000,000 465,000,000 965,000,000 1,465,000,000
Taxes 0 0 0 0 0 0
EAT 485,000,000 985,000,000 1,485,000,000 465,000,000 965,000,000 1,465,000,000
# Shares 424,842,105 424,842,105 424,842,105 403,789,474 403,789,474 403,789,474
EPS 1.14 2.32 3.50 1.15 2.39 3.63
70 Percent Debt - 30 Percent Stock 70 Percent Stock - 30 Percent Debt
Amo#nt 5eeded 1,000
+nterest 5>
Ta' .ate 0>
Share Pri"e ;19
Shares (#tstandin% F o7 net sales to F>4 This will %i2e them more
ad2ertisin% and brand re"o%nition4
Ama3on has re"ently la#n"hed their sear"h en%ine "alled
A94 5ow they need to spend the ne't three year tryin%
to %et the name ,nown and %et in the "ompetition with
yahoo and %oo%le4
2005 Press .eleases
'(r.04
')a*n.c) 'c+,ire- #k.,rge LL/
0ar.11
')a*n.c) t We1ca-t 2n3e-tr /n4erence Pre-entatin
5e1.15
')a*n.c) 'nn,nce- 6e! '!ard 4r 2nn3ati3e 6n(r4it 7rgani*
atin-
5e1.0"
')a*n.c) 8e!e9r: .a9e- ;( 0re Than 120 Percent
5e1.02
')a*n.c) 'nn,nce- Recrd 5ree /a-h 59! 5,e9ed 1: L!er Price
- and 5ree .hi((ing< 2ntrd,ce- 6e! =>(re-- .hi((ing Prgra) --
')a*n Pri)e
8an.21
')a*n We1 .er3ice- ?i3e- .4t!are De3e9(er- 5ir-t-=3er 'cce-- t
Data and Techn9g: 4r)
')a*n.ca and ')a*n.4r
8an.17
')a*n .er3ice- and Diane @n 5,r-ten1erg .t,di 'nn,nce =-/))e
rce '99iance 4r 7n9ine '((are9 744ering
,ress releases #orm Amazon.com
doc_970218554.ppt
Amazon.com, Inc. is an American electronic commerce company with headquarters in Seattle, Washington. It is the largest Internet-based retailer in the United States.Amazon.com started as an online bookstore, but soon diversified, selling DVDs, VHSs, CDs, video and MP3 downloads/streaming, software, video games, electronics, apparel, furniture, food, toys, and jewelry.
Presented by:
Amy Kakuk,
Jessica Bourgoin,
and Beth Theriault
April 14, 2005
Outline
?
History
?
Where we Stand Today
?
Vision Statement
?
ission Statements
!
A"t#al
!
Proposed
?
$#siness Se%ments
?
&'ternal A#dit
!
(pport#nities
!
Threats
?
&)&
?
*P
?
+nternal A#dit
!
Stren%ths
!
Wea,nesses
?
+)&
?
atri' Analysis
!
SW(T atri'
!
Spa"e atri'
!
-rand Strate%y atri'
!
$*- atri'
!
+& atri'
?
atri' and SW(T S#mmary
?
)inan"ial .atios
?
/SP
?
Strate%y .e"ommendations
?
&PS0&$+T Analysis
?
)#t#re -oals0(b1e"ti2es
?
Ama3on4 *( in the 5ews
6Ama3on was in"orporated in the state o7 Washin%ton on 8#ly 5, 19944
6$e7ore the "ompany was renamed Ama3on it was "alled *adabra, +n"4
6The "ompany was de2eloped by 8e77 $e3os and two asso"iates in a %ara%e
"on2erted into a shop4
6The "ompany be%an sellin% to the p#bli" in 8#ly 19954
6(n ay 15, 199: the "ompany went p#bli" with an openin% pri"e o7 ;1< per
share4
6+n 1999, the "ompany bo#%ht 4=> o7 dr#%store4"om and la#n"hed it?s own
a#"tion site to "hallen%e e@bay4
6+n 2002, Vir%in &ntertainment -ro#p and Ama3on4"om rela#n"hed
www42ir%inme%a4"om as a "o@branded Web site4
6Also in 2002, Ama3on4"om la#n"hed Ama3on4"a, brin%in% *anadians the
sele"tion, "on2enien"e, and the 2al#e o7 the Ama3on shoppin% e'perien"e4
A little about us…
?
HeadA#arters is lo"ated in Seattle,
Washin%ton4
?
Ama3on?s "ommon sto", is p#bli"ly traded
on the 5ASBA/ #nder AC54
?
(#r web@site address is ama3on4"om
Where we stand today..
Amazon.com, nc. is an internet!based com"any that o##ers
books, music, $ideos, %&%s, electronics, so#tware, toys, $ideo
games, electronic greeting cards, home im"ro$ements, online
auctions, and a $irtual mall called z!sho"s. Amazon has sites in
'rance, Ja"an, (ermany and the )nited Kingdom. %omestically,
Amazon has e*"erienced tremendous growth since its ince"tion.
+owe$er, that growth has not come without a cost. As the world
economy worsens, Amazon #aces "ressure #rom stockholders as
well as the entire #inancial community to realize a "ro#it. Amazon
has created a "lat#orm and customer base that many com"anies
en$y, but can they stay in business long enough to reach
"ro#itability.
,rice and &olume
n#ormation #rom Amazon.com
Recent Price $34.60
Trade Date 04/11/05
52-Week High $54.70
52-Week L! $32."2
#eta $5-%ear& 2.37
Stock Chart (May 2003 – March
2005)
-hart #rom Amazon.com
&ision .tatement /"ro"osed0
To be the largest mass online
merchandiser on earth.
ission Statement
Actual
The "ompany motto: DWor, Hard, Ha2e )#n,
and a,e History4E
The "ompany?s si' "ore 2al#es: "#stomer
obsession, ownership, bias 7or a"tion,
7r#%ality, hi%h hirin% bar, and inno2ation4
Mission Statement
Proposed
Our frst responsibility is to service our worldwide (1)
online customers. (2) We pledge to make every efort
to improve te level o! customer service trougout
te e"commerce industry by using up"to"date
ardware and so!tware (#) and by listening to our
customers. We will ofer customers increased product
selections ($) to !ulfll teir online sopping desires.
We strive to be te most used e"commerce portal on
te World Wide Web (%)& wile conducting operations
in a igly etical (') manner to ensure te long"term
proftability and growt !or sareolders.(() We pledge
to contribute to te economic strengt o! society and
to !unction as an e)ceptional corporate citi*en in all
countries tat we do business. (+) We vow to recruit&
develop& motivate& reward and retain personnel o!
e)ceptional ability& caracter& and dedication. ,n
return& we will provide tem good working conditions&
superior leadersip& sort and long term
compensation& and an opportunity !or individual
growt and employment security.(-)
14 ar,et
24 *#stomer
F4 Te"hnolo%y
44 Prod#"t or ser2i"es
54 Philosophy
=4 Sel7 *on"ept
:4 *on"ern 7or s#r2i2al,
%rowth, and
pro7itability
a"id
=arket
(rowth
2. =arket %e$elo"ment
3. =arket ,enetration
6. ,roduct %e$elo"ment
5. 'orward?Backward?+orizontal ntegration
7. -oncentric %i$ersi#ication
2)= :atrix
.igh
8(#
Med
#
Stars
>omestic
Question Marks
International
Lo!
"(#
Cash Cows Dogs
Hi%h 140 edi#m 450 Iow 040
>elati$e =arket .hare ,osition
ndustry
.ales
(rowth
>ate
&$# to
&$66
-9 7---
7-- Lo!
($# to
($66
he EFE
otal
Weighted
Score
7- 7
-7 Medium
3omestic -nternational )$# to
)$66
--- --
- .igh
&$# to &$66 ($# to ($66 )$# to '$#
:eak Average
Strong
he IFE otal Weighted Score
Internal-External (IE)
Matrix
+old and
=aintain
atri' Analysis and SW(T S#mmary
5lternati&e Strategies -; SPAC; G
For,ard Integration ? ? ? )
2ac-,ard Integration ? ? ? )
8ori9ontal Integration ? ? ? )
:ar-et Penetration ? ? ? )
:ar-et >e&elopment ? ? ? )
Product >e&elopment ? ? ? )
)oncentric >i&ersi%ication ? ? (
)onglomerate >i&ersi%ication ? &
8ori9ontal >i&ersi%ication ? &
?oint 7enture ? &
Retrenchment
>i&estiture
3i@uidation
'inancial >atio Analysis Gar"h 2004H
)ompany Industry Sector S;P *!!
Val#ation .atios
P0& .atio GTTH %%6$%6 '&$#& (5$6# ('$#&
P0& Hi%h @ Iast 5 Krs =A '%$&6 '5$'4 '%$'&
P0& Iow @ Iast 5 Krs =A &%$*6 &*$#6 &*$(*
$eta ($() &$)# #$6* &$##
Pri"e to Sales GTTH )$&* %$'# ($5# )$))
Pri"e to *ash )low GTTH &'%$56 (6$&6 &4$#) &4$)(
Pri"e to )ree *ash )low
GTTH
'5$&( ')$%4 ))$&& (5$64
> (wned +nstit#tions %5$)% *5$&* %#$'5 *'$&6
Bi2idends
Amazon .ector ndustry .@, 7;;
Bi2idend Kield =@A &$&4 ($&' ($#'
Bi2idend Kield @ 5 Kr A2% #$## #$(( &$') &$'5
Bi2idend 5 Kr -rowth .ate =M 4$## "#$56 *$'5
Payo#t .atio GTTH #$## ($&( &%$%' (*$45
Gro!th in 20024
?
.easons ! a%%ressi2e ad2ertisin% 7rom new "ompetitors s#"h as b#y4 *(,
o2ersto",4 *(4
Tar%et the mar,etin% "ampai%n4
?
*osts asso"iated with this strate%y ! in"rease in 7#l7illment "osts and
mar,etin% "osts4 )#l7illment "osts are 10> o7 net sales4 )or the period 200F !
2005, these "osts amo#nt to ;2,0 in"rease in mar,etin% "osts
7or the period 200F @2005 amo#nts to ;20ecommendations and
m"lementation
*on"entri" di2ersi7i"ation ! add new b#t related prod#"ts0ser2i"es4
?
&'ample ! start an online %o#rmet 7ood and be2era%e store #sin% a
wholesaler s#"h as Seattle *ho"olate *o4
?
.easons ! ta,e ad2anta%e o7 brand name re"o%nition and "#stomer loyalty4
?
$e"a#se this strate%y does not in2ol2e any in2entory b#ild@#p, "osts
asso"iated are relati2ely low4
Hori3ontal di2ersi7i"ation ! add new, #nrelated prod#"ts0ser2i"es 7or present
"#stomers4
?
&'ample ! de2elop a sear"h en%ine to "ontrol the path to online mer"hants4
?
.is, ! similar ser2i"es are already a2ailable: Kahoo, -oo%le4
&PS0&$+T Analysis
Recession Normal Boom Recession Normal Boom
EBIT 500,000,000 1,000,000,000 1,500,000,000 500,000,000 1,000,000,000 1,500,000,000
Interest 0 0 0 50,000,000 50,000,000 50,000,000
EBT 500,000,000 1,000,000,000 1,500,000,000 450,000,000 950,000,000 1,450,000,000
Taxes 0 0 0 0 0 0
EAT 500,000,000 1,000,000,000 1,500,000,000 450,000,000 950,000,000 1,450,000,000
# Shares 440,631,579 440,631,579 440,631,579 388,000,000 388,000,000 388,000,000
EPS 1.13 2.27 3.40 1.16 2.45 3.74
Common Stock Financing Debt Financing
Recession Normal Boom Recession Normal Boom
EBIT 500,000,000 1,000,000,000 1,500,000,000 500,000,000 1,000,000,000 1,500,000,000
Interest 15,000,000 15,000,000 15,000,000 35,000,000 35,000,000 35,000,000
EBT 485,000,000 985,000,000 1,485,000,000 465,000,000 965,000,000 1,465,000,000
Taxes 0 0 0 0 0 0
EAT 485,000,000 985,000,000 1,485,000,000 465,000,000 965,000,000 1,465,000,000
# Shares 424,842,105 424,842,105 424,842,105 403,789,474 403,789,474 403,789,474
EPS 1.14 2.32 3.50 1.15 2.39 3.63
70 Percent Debt - 30 Percent Stock 70 Percent Stock - 30 Percent Debt
Amo#nt 5eeded 1,000
+nterest 5>
Ta' .ate 0>
Share Pri"e ;19
Shares (#tstandin% F o7 net sales to F>4 This will %i2e them more
ad2ertisin% and brand re"o%nition4
Ama3on has re"ently la#n"hed their sear"h en%ine "alled
A94 5ow they need to spend the ne't three year tryin%
to %et the name ,nown and %et in the "ompetition with
yahoo and %oo%le4
2005 Press .eleases
'(r.04
')a*n.c) 'c+,ire- #k.,rge LL/
0ar.11
')a*n.c) t We1ca-t 2n3e-tr /n4erence Pre-entatin
5e1.15
')a*n.c) 'nn,nce- 6e! '!ard 4r 2nn3ati3e 6n(r4it 7rgani*
atin-
5e1.0"
')a*n.c) 8e!e9r: .a9e- ;( 0re Than 120 Percent
5e1.02
')a*n.c) 'nn,nce- Recrd 5ree /a-h 59! 5,e9ed 1: L!er Price
- and 5ree .hi((ing< 2ntrd,ce- 6e! =>(re-- .hi((ing Prgra) --
')a*n Pri)e
8an.21
')a*n We1 .er3ice- ?i3e- .4t!are De3e9(er- 5ir-t-=3er 'cce-- t
Data and Techn9g: 4r)
')a*n.ca and ')a*n.4r
8an.17
')a*n .er3ice- and Diane @n 5,r-ten1erg .t,di 'nn,nce =-/))e
rce '99iance 4r 7n9ine '((are9 744ering
,ress releases #orm Amazon.com
doc_970218554.ppt