a strategy analysis - … filea strategy analysis . ... 1.market structure of aws a. target...

Ge Yifan (Cindy) | Nguyen Quynh Thu (Rosanna)

A Strategy Analysis

What is ?

Key milestones in Amazon history

1995

2007

2006

2003

1998 1994

Founded by Jeff

Bezos. Named

Cadabra

Changed

name to

Amazon

Expanded to music and

DVD/video sales

Acquired Internet Movie

Database

Launched

A9.com, a search

engine

2000

Changed logo to the

current one

Launched AWS

- Elastic Compute

Cloud (EC2)

- Simple Storage

Service (S3)

Kindle

2016

2013

2014

2015

2010

Started Amazon Studios Beta test of Amazon Go

Operated Amazon Wind and

Solar Farms

Introduced Fire TV

device and Fire Phone

Began producing movies

for theaters

Introduced Amazon

Launchpad for startups

Began offering

Amazon Art logic

services to other

websites

Keys to ’s success

Expanding to many industries mostly

by acquisition of other companies Exploiting crowdsourcing

About Bezos - CEO

- Fun fact: Easily explode at

employees

- Customer-oriented

About Bezos - CEO

- Fun fact: Easily explode at

employees

- Customer-oriented

- Dares to think, dares to do

Amazon’s profit/loss

- Fun fact: Easily explode at

employees

- Customer-oriented

- Dares to think, dares to do

Amazon’s profit/loss

Stock price soared from around $300 in 2014 to nearly $1,000 in 2017

About Bezos - CEO

- Fun fact: Easily explode at

employees

- Customer-oriented

- Dares to think, dares to do

- Has long vision over business

Most of Amazon’s profit comes from AWS in Q2 2017.

AWS is facing fierce competition

Agenda

1. Market structure of AWS

a. Target customers

b. Competitors

c. Positioning strategy

2. Issues & challenges (SWOT analysis)

3. Recommendations

4. Key takeaways

Demographic ( who they are)

• Different industries

• America, Asia, Europe

• Startups, enterprises

Psychographic (how they think)

• Positive to change

• Market oriented

Behavior (what they do)

• Data storage

• Run new applications or tests

Environment (where they are)

• High technology

• Quick change

• Fierce competition

Customer profile (AWS)

● Infrastructure as a service Data storage

● Platform as a service

Run application tests

● Software as a service

ERP/CRM applications

photo/video sharing

Competitor analysis (AWS)

dominance

Dark horse

Strong competitor

Competitor analysis (AWS)

Large scale of products and service

AWS & GCP & Azure

Revenue brought in by

early customers

More enterprise features

and higher-performance

services

Attract larger

apps or

companies

Higher profit

Virtuous cycle

Revenue brought in by

early customers

More enterprise features

and higher-performance

services

Attract larger

apps or

companies

Higher profit

Virtuous cycle

Large scale of products and service

Easy to use(machine learning),

brand image, technology,

Enterprise-know-how, hybrid

cloud,discount on other products

AWS & GCP & Azure

Company Pricing Model

Per hour – rounded up On demand, reserved, spot

Per minute – rounded up

(minimum 10 minutes) On demand – sustained use

Per minute – rounded up

commitments (pre-paid or

monthly)

On demand – short term

commitments (pre-paid or

monthly)

Pricing and model

● Higher-end cloud infrastructure capacity

● Faster database than Amazon Cloud Databases

• Hire employees from competitor

• Different types of cloud (hybrid cloud, private cloud)

“Oracle is the only vendor that provides a complete, integrated stack for the cloud”

- Mohindroo -

Oracle

AI (artificial intelligence)

● Faster computing capacity

● Analytics technology

● Machine learning

● Cognitive computing

Artificial intelligence

Issues & challenges (SWOT analysis)

Strengths Weaknesses

Opportunities Threats

● Technical know-how

● Capital resources

● Strong brand with history

● Product portfolio

● Targeting

● Positioning (cost leadership + differentiation)

● Not fully integrated because the services

are offered by different vendors

● Increasing number of tech-savvy startups

● Growing market for cloud computing

● Strong competition

● Fast acquisition pace -> management,

integration, capital resource

Recommendations

Strengths Weaknesses

Opportunities Threats

● Technical know-how

● Capital resources

● Strong brand with history

● Product portfolio

● Targeting

● Positioning (cost leadership + differentiation)

● Not fully integrated because the services

are offered by different vendors

● Increasing number of tech-savvy startups

● Growing market for cloud computing

● Strong competition

● Fast acquisition pace -> management,

integration, capital resource

Strengths Weaknesses

Opportunities Threats

● Technical know-how

● Capital resources

● Strong brand with history

● Product portfolio

● Targeting

● Positioning (cost leadership + differentiation)

● Not fully integrated because the services

are offered by different vendors

● Increasing number of tech-savvy startups

● Growing market for cloud computing

● Strong competition

● Fast acquisition pace -> management,

integration, capital resource

Strengths Weaknesses

Opportunities Threats

● Technical know-how

● Capital resources

● Strong brand with history

● Product portfolio

● Targeting

● Positioning (cost leadership + differentiation)

● Not fully integrated because the services

are offered by different vendors

● Increasing number of tech-savvy startups

● Growing market for cloud computing

● Strong competition

● Fast acquisition pace -> management,

integration, capital resource

1. Have a good supply chain info systems in which customers’ complaint can go

straight to the vendors

2. Make sure the vendors are capable of dealing with emerging problems in short

time

Recommendations

Strengths Weaknesses

Opportunities Threats

● Technical know-how

● Capital resources

● Strong brand with history

● Product portfolio

● Targeting

● Positioning (cost leadership + differentiation)

● Not fully integrated because the services

are offered by different vendors

● Increasing number of tech-savvy startups

● Growing market for cloud computing

● Strong competition

● Fast acquisition pace -> management,

integration, capital resource

Strengths Weaknesses

Opportunities Threats

● Technical know-how

● Capital resources

● Strong brand with history

● Product portfolio

● Targeting

● Positioning (cost leadership + differentiation)

● Not fully integrated because the services

are offered by different vendors

● Increasing number of tech-savvy startups

● Growing market for cloud computing

● Strong competition

● Fast acquisition pace -> management,

integration, capital resource

Strengths Weaknesses

Opportunities Threats

● Technical know-how

● Capital resources

● Strong brand with history

● Product portfolio

● Targeting

● Positioning (cost leadership + differentiation)

● Not fully integrated because the services

are offered by different vendors

● Increasing number of tech-savvy startups

● Growing market for cloud computing

● Strong competition

● Fast acquisition pace -> management,

integration, capital resource

3. Slow down the acquisition pace or Make sure all sub-companies can integrate

well

Strengths Weaknesses

Opportunities Threats

● Technical know-how

● Capital resources

● Strong brand with history

● Product portfolio

● Targeting

● Positioning (cost leadership + differentiation)

● Not fully integrated because the services

are offered by different vendors

● Increasing number of tech-savvy startups

● Growing market for cloud computing

● Strong competition

● Fast acquisition pace -> management,

integration, capital resource

Strengths Weaknesses

Opportunities Threats

● Technical know-how

● Capital resources

● Strong brand with history

● Product portfolio

● Targeting

● Positioning (cost leadership + differentiation)

● Not fully integrated because the services

are offered by different vendors

● Increasing number of tech-savvy startups

● Growing market for cloud computing

● Strong competition

● Fast acquisition pace -> management,

integration, capital resource

Strengths Weaknesses

Opportunities Threats

● Technical know-how

● Capital resources

● Strong brand with history

● Product portfolio

● Targeting

● Positioning (cost leadership + differentiation)

● Not fully integrated because the services

are offered by different vendors

● Increasing number of tech-savvy startups

● Growing market for cloud computing

● Strong competition

● Fast acquisition pace -> management,

integration, capital resource

Recommendations

4. Keep up to the latest trends and invest wisely

5. Pay more attention to attracting startups and SMEs

Key takeaways

Key to Amazon’s success:

● Be the innovator or at least keep up with the latest trends

● Exploiting crowdsourcing

Key takeaways

Recommendations:

1. Have a good supply chain info systems in which customers’ complaint can

go straight to the vendors

2. Make sure the vendors are capable of dealing with emerging problems in

short time

3. Slow down the acquisition pace or Make sure all sub-companies can

integrate well

4. Keep up to the latest trends and invest wisely

5. Pay more attention to attracting startups and SMEs

References

Hartmans, A. (2017). 15 fascinating facts you probably didn't know about Amazon. [online] Business Insider. Available at:

http://www.businessinsider.com/jeff-bezos-amazon-history-facts-2017-4/#amazon-wasnt-the-companys-original-name-1

[Accessed 6 Oct. 2017].

Gershgorn, D., Griswold, A., Murphy, M., Coren, M. and Kessler, S. (2017). What is Amazon, really?. [online] Quartz.

Available at: https://qz.com/1051814/what-is-amazon-really/ [Accessed 8 Oct. 2017].

Google. (2017). amazon stock price - Google. [online] Available at:

https://www.google.com.hk/search?q=amazon+stock+price&spell=1&sa=X&ved=0ahUKEwiRy9bo6OfWAhWJW5QKHUf2A

AQQvwUIIygA&biw=1280&bih=615 [Accessed 10 Oct. 2017].

Sherman, E. (2015). 20 years of Amazon's expansive evolution. [online] Cbsnews.com. Available at:

https://www.cbsnews.com/news/20-years-of-amazons-expansive-evolution/ [Accessed 6 Oct. 2017].

Statt, N. (2016). Amazon, once a big spender, is now a profit machine. [online] The Verge. Available at:

https://www.theverge.com/2016/7/28/12313526/amazon-q2-2016-earnings-report-aws-cloud-profit [Accessed 10 Oct. 2017].

Streitfeld, D. (2014). Amazon’s Investments Are Piling Up, as Big Losses. [online] Nytimes.com. Available at:

https://www.nytimes.com/2014/10/24/technology/amazon-loss-quarterly-earnings.html [Accessed 10 Oct. 2017].

Thank you Q&A