The document provides an overview of Amazon's business model and strategy. It discusses Amazon's mission, values and core value proposition of low prices, convenience and selection. It also outlines Amazon's business model evolution, including entering new product categories like ebooks/Kindle, diversifying revenue streams through services like AWS, and expanding its global operations through acquisitions and investments. The document concludes that Amazon has followed a logical path of growth and expansion using its brand strength and focus on customer experience.

1. Virginia Rosales
Anabel Juárez
Jaime Millán
Vladimir Matović
October 2010
Business Models: Themes and Issues

2. - from A to Z
Company Overview
Mission, Vision & Values
Core Value Proposition, Objective & Strategy
Three Customer Sets
Attention Economy and e-Trust
Business Model
Amazon.com Business Model Evolution
Business Model Canvas – The 9 Building Blocks
eBook/Kindle
Value Capture
Diversifying Revenue Streams
Geographical Expansion & Product Range
Amazon.com Acquisitions and Investments
Sales
Conclusion
Sky is the limit
References

3. - from A to Z
Company Overview
Mission, Vision & Values
Core Value Proposition, Objective & Strategy
Three Customer Sets
Attention Economy and e-Trust
Business Model
Amazon.com Business Model Evolution
Business Model Canvas – The 9 Building Blocks
eBook/Kindle
Value Capture
Diversifying Revenue Streams
Geographical Expansion & Product Range
Amazon.com Acquisitions and Investments
Sales
Conclusion
Sky is the limit
References

4. Company Overview
Founded in 1994
in Seattle, USA
28,300
employees
Global leader in
e-commerce
Wide range of
products
Worldwide
network of
fulfilment
Mass
customisation
Customer
experience
Affiliations Stickiness

5. Mission
• ‘To leverage technology and the expertise of our invaluable employees to
provide our customers with the best shopping experience on the Internet.’
Vision
• ‘To be earth’s most customer centric company; to build a place where
people can come to find and discover anything they might want to buy
online.’
Values
• Customer Obsession
• Innovation
• Bias for Action
• Ownership
• High Hiring Bar
• Frugality

6. Objective
• ‘Not to discount a small number of products for a limited period of time, but
to offer low prices everyday and apply them broadly across our entire
product range.’
Core Value Proposition
• Price
• Convenience
• Selection
Strategy
• ‘To ‘Get Big Fast’ by investing aggressively in new product categories and
new businesses, by spending money on brand awareness and getting new
customers.’

7. Strategy
Source: www.amazon.com

8. Who want to
buy products
on Amazon
Who want to use
Amazon
developing
services
Who want to
sell products
on Amazon
Three Customer Sets
Consumers
Sellers Developers

9. - from A to Z
Company Overview
Mission, Vision & Values
Core Value Proposition, Objective & Strategy
Three Customer Sets
Attention Economy and e-Trust
Business Model
Amazon.com Business Model Evolution
Business Model Canvas – The 9 Building Blocks
eBook/Kindle
Value Capture
Diversifying Revenue Streams
Geographical Expansion & Product Range
Amazon.com Acquisitions and Investments
Sales
Conclusion
Sky is the limit
References

10. - from A to Z
Company Overview
Mission, Vision & Values
Core Value Proposition, Objective & Strategy
Three Customer Sets
Attention Economy and e-Trust
Business Model
Amazon.com Business Model Evolution
Business Model Canvas – The 9 Building Blocks
eBook/Kindle
Value Capture
Diversifying Revenue Streams
Geographical Expansion & Product Range
Amazon.com Acquisitions and Investments
Sales
Conclusion
Sky is the limit
References

11. How long do you stay @ ?
Attention attraction and retention
Customer’s needs
Relevant Content
Frequent Update
Buying habits
Reactions to Web site design
Demographics
Favorite and least favorite products
GOAL:
HOW?
e-Trust
Brand Differentiation
Customer Loyalty
Quality
Value
Timeliness
Appropriateness of Goods &
Services
Business Reputation
Security in Transactions

12. How long do you stay @ ?
Stickiness
Holds customers and keeps them coming back for more!
Measurement: *Time spent at a website
*Number of visits per person
*Number of pages viewed

13. Products &
Services
Content

14. Interactivity &
Production Values

15. Personalization
Customization
Ownership &
Belonging
Co-Creation &
Recognition

16. 2
3
Variety
4
5 Speed & Delivery
1
Easy
Navigation

17. - from A to Z
Company Overview
Mission, Vision & Values
Core Value Proposition, Objective & Strategy
Three Customer Sets
Attention Economy and e-Trust
Business Model
Amazon.com Business Model Evolution
Business Model Canvas – The 9 Building Blocks
eBook/Kindle
Value Capture
Diversifying Revenue Streams
Geographical Expansion & Product Range
Amazon.com Acquisitions and Investments
Sales
Conclusion
Sky is the limit
References

18. - from A to Z
Company Overview
Mission, Vision & Values
Core Value Proposition, Objective & Strategy
Three Customer Sets
Attention Economy and e-Trust
Business Model
Amazon.com Business Model Evolution
Business Model Canvas – The 9 Building Blocks
eBook/Kindle
Value Capture
Diversifying Revenue Streams
Geographical Expansion & Product Range
Amazon.com Acquisitions and Investments
Sales
Conclusion
Sky is the limit
References

19. Auctions & zShops
eBooks/Kindle
OnLine Book Retailing
Marketplace
E-commerce
Platform/
Web Services
Partherships
&
Logistic Services
Business Model Evolution

20. Business Model Canvas
9 building blocks
Customer
Segment (CS)
Cost
Structure(C$)
Customer
Relationship (CR)
Channels (CH)
Revenue Streams
(R$)
Key Resources
(KR)
Key Partnerships
(KP)
Key Activities
(KA)
Value
Proposition
(VP)

21. Business Model Canvas
PartneEr-schoimpsm aeAnrudOcc eeMnLtB Poliaiooglnrnaoiekstk eft Rs&oit/cepr K tzmlSaaSieni/hcrldWeiovnslpieegcsbe SPerrovviicdeesr
FULFILMENT & IT
INFRASTRUCTURE
DEVELOPMENT AND
MAINTENANCE
MARKETING
TECHNOLOGY & CONTENT
FULFILMENT
AUTOMATED
SERVICES & CO-CREATION
(CUSTOMISED ONLINE
PROFILES &
RECOMMENDATIONS)
PARTNERSHIPS &
ALLIANCES
AMAZON.COM (&
OVERSEAS SITES)
AFFILIATES
SALES MARGINS
IT INFRASTRUCTURE,
SOFTWARE &
EXPERTS
GLOBAL FULFILMENT
INFRASTRUCTURE
GLOBAL MARKET
(SELLERS &
CONSUMERS)
INTERMEDIATION
SERVICES
COMMISSIONS
SELLERS (COMPANIES
AGGREGATION OF & INDIVIDUALS)
DEMAND (LONGTAIL)
FULFILMENT
COMPANIES (ONLINE
& TRADITIONAL
RETAILERS)
LOGISTICS NETWORK
DEVELOPERS
MASS-CUSTOMISED
WEB SERVICES
APIs
PORTABLE DEVICE
PRODUCT
DEVELOPMENT, AND
PROMOTION
HARDWARE
MANUFACTURERS
GLOBAL MARKET
(CONSUMERS)
LOW PRICES
CONVENIENCE
WIDE SELECTION
CUSTOMER EXPERIENCE
LOGISTIC PARTNERS
AFFILIATES
(PUBLISHERS, AUTHORS,
BOOKSTORES…)
COMPANIES (ONLINE
& TRADITIONAL
RETAILERS)

22. eBooks/Kindle
>450 000 books
available for
download
Newspapers,
magazines and blogs
subscription
Amazon keeps 65% of
the revenue from all
eBook sales for Kindle
Amazon reported 80% of
eBook market
Kindle eBooks add 35%
to a physical book’s
sale on Amazon
eBooks downloaded
from Amazon not
exclusive to Kindle
"Our vision is to have every book ever printed, in any language,
all available in tinder 60 seconds.“
- Jeff Bezos, Amazon.com CEO

23. Capture Value:
transforming earnings into profits
Capital
efficiency
Inventory
turnover
Cash
generative
cycle
Maximize Profit Dollars,
Not Margins

24. - from A to Z
Company Overview
Mission, Vision & Values
Core Value Proposition, Objective & Strategy
Three Customer Sets
Attention Economy and e-Trust
Business Model
Amazon.com Business Model Evolution
Business Model Canvas – The 9 Building Blocks
eBook/Kindle
Value Capture
Diversifying Revenue Streams
Geographical Expansion & Product Range
Amazon.com Acquisitions and Investments
Sales
Conclusion
Sky is the limit
References

25. - from A to Z
Company Overview
Mission, Vision & Values
Core Value Proposition, Objective & Strategy
Three Customer Sets
Attention Economy and e-Trust
Business Model
Amazon.com Business Model Evolution
Business Model Canvas – The 9 Building Blocks
eBook/Kindle
Value Capture
Diversifying Revenue Streams
Geographical Expansion & Product Range
Amazon.com Acquisitions and Investments
Sales
Conclusion
Sky is the limit
References

26. Source: www.amazon.com

27. Source: www.meettheboss.com

28. Worldwide Sales Mix
z
Q1 ’04 – Net Sales $5,710 MM
76%
Q4 ’09– Net Sales $24,509 MM
52%
22%
2% 3%
45%
Source: www.amazon.com
WW Media (Books, Music, Movies, Video Games and Consoles, Software
and Digital Downloads)
WW Electronics & Other General Merchendise (EGM)
WW Other (Marketing and Promotional Activities, Amazon Web Services,
Amazon Enterprise Solutions, & Co-branded Credit Cards)

29. International Sales
$3,074
$6,740
$8,938
$10,000
$9,000
$8,000
$7,000
$6,000
$5,000
$4,000
$3,000
$2,000
$1,000
$0
2004 2005 2006 2007 2008
MM
• 2008 International sales
47% of WW sales, up from
45% in 2007
• Shipments to over 200
countries
Source: www.amazon.com

30. - from A to Z
Company Overview
Mission, Vision & Values
Core Value Proposition, Objective & Strategy
Three Customer Sets
Attention Economy and e-Trust
Business Model
Amazon.com Business Model Evolution
Business Model Canvas – The 9 Building Blocks
eBook/Kindle
Value Capture
Diversifying Revenue Streams
Geographical Expansion & Product Range
Amazon.com Acquisitions and Investments
Sales
Conclusion
Sky is the limit
References

31. - from A to Z
Company Overview
Mission, Vision & Values
Core Value Proposition, Objective & Strategy
Three Customer Sets
Attention Economy and e-Trust
Business Model
Amazon.com Business Model Evolution
Business Model Canvas – The 9 Building Blocks
eBook/Kindle
Value Capture
Diversifying Revenue Streams
Geographical Expansion & Product Range
Amazon.com Acquisitions and Investments
Sales
Conclusion
Sky is the limit
References

32. Conclusion
Evolution
• Logical path
• Resources &
Channels
• B2C, B2B
Expansion
• New markets
• Strength of Brand
• “Earth’s biggest
selection”
Attention
Economy
• Community &
Stickiness
• Trust
• Customer
Experience

33. Sky is the limit

34. Thank you!

35. References
• Websites:
– www.amazon.com
– www.youtube.com
– www.charlierose.com
– www.meettheboss.com
– SOLOMON D. 2009. Questions for Jeffrey P. Bezos: Book Learning. Available at:http://www.nytimes.com/2009/12/06/magazine/06fob-q4-
t.html " [22.10.2010].
• Articles:
– 2006. From Niches to Riches: Anatomy of the Long Tail. MIT Sloan Management Review, 47, 67-71.
– 2008. Amazon.com: The Brink of Bankruptcy.
– ANTE, S. E. 2009. HOW AMAZON IS TURNING OPINIONS INTO GOLD. BusinessWeek, 047-048.
– DAVENPORT, T. H. & BECK, J. C. 2000. GETTING the ATTENTION You Need. Harvard Business Review, 78, 118-126.
– HOF, R. D. 2003. Reprogramming Amazon. BusinessWeek, 82-86.
– KIRBY, J. & STEWART, T. A. 2007. The Institutional YES. (cover story). Harvard Business School Publication Corp.
– MUDAMBI, S. M. & SCHUFF, D. 2010. WHAT MAKES A HELPFUL ONLINE REVIEW? A STUDY OF CUSTOMER REVIEWS ON AMAZON.COM. MIS
Quarterly, 34, 185-200.
– O'BRIEN, J. M. & SHAMBORA, J. 2009. AMAZON'S NEXT REVOLUTION. (cover story). Fortune, 159, 68-76.
– PENENBERG, A. L. 2009. The Evolution of Amazon. (cover story). Fast Company, 66-74.
– TONKERY, D. 2010. Amazon Versus Ebook Publishers. Searcher, 18, 41-43.
– ZMUDA, N. 2009. AMAZON SAYS 'I DO' TO ZAPPOS. NOW WHAT? Advertising Age, 80, 4-4.
• Books:
– DAVENPORT, T. and BECK, J., 2001. The Attention Economy, Understanding the New Currency of Business. 1st ed. United States of America:
Harvard Business School Press
– DEMAIO, H., 2001. B2B and Beyond, New Business Models Built on Trust. 1st ed. United States of America: John Wiley & Sons
– OSTERWALDER A. and PIGNEUR Y., 2010. Business Model Generation, Hoboken: John Wiley & Sons
– SPECTOR, R., 2000. Amazon.com: Get Big Fast. London: Random House Business Books