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Amazon.com, Inc.

Extracts from this document...

Introduction

Case Summary Amazon.com, Inc. (Amazon) is an internet-based company. Jeff Bezos is the founder of the company as well as its president, CEO, and chairman. Amazon has evolved from an online bookstore in its beginnings to now one of the largest corporation shopping sites on the Internet. Amazon has its business divided into three large categories, Online Retail, Marketplace, and Third-Party Sellers. The Online Retail segment consists of books, movies, music, greeting cards, toys, games, electronics, kitchen appliances, tools, cell phones, and much more at a customer's disposal with a click of the mouse. The Marketplace segment enhances the selection of products on Amazon's principal website by offering new and old products via an auction format for person-to-person purchasing. The last segment is Third-Party Sellers which caters other companies and vendors in allowing outside companies to sell their own products through Amazon's website. This Third-Party selling allows other companies to take advantage of the high online traffic that Amazon has built to help boost up sales. In late 2000, Amazon launched a co-branded video and toy store with Toysrus.com, has strategic partnerships with others which all of the businesses are operate in cyberspace, and acquired business to produce e-commerce software and to establish a database to track customer demographic information and online buying habits. Amazon's 2000 net income was negative on revenues. The case emphasizes on the external and internal assessment, strategies formulation and strategies selection. Problems and Strategic Issues The major problem faced by the company is the people only visiting and browsing, and not buying. They used web sites to gather information about products, which is then used to purchase the product at offline locations or other web sites. ...read more.

Middle

Political and Legal Factors Political and legal factors may impact on business and political relationship. Regulations set by countries may affect the buyer market. Some countries will establish ban on goods or use the embargo method. Demographic Environment Demographic environment includes Population and Age range Economic factors The economic factors such as recession may change the buying habit of consumers. Even the advancement and upgrading of technology will affect consumer's consumptions. TASK ENVIRONMENT The external factors will the online market and the competitors. These two factors pay special attention to both opportunities and threats. The opportunities are that Amazon.com can expand the market to customers that are not online, provide training and mentoring program and allocate resources more effectively. As for the threats, the growing competitors, market slow down and the increased costs of a running business through online plays a major role. Alternative Solution & Their Evaluation Human Resource Management Provide a better training and development program for its employees to build skills and enhance their specialties. This should be done to ensure that its employees would be well prepared in handling the everyday tasks that is given to them. When its employees are well prepared, it does not have to recruit employees from its competing firms. By introducing a reward scheme for the employees, it will ensure that the employees would be motivated to learn and would enable the firm to achieve employee satisfaction. International placement should be done by sending top performing employees to new markets to gain valuable experience. Business Operations Backward integration by forming a partnership with its main supplier, Ingram Book Group's would enable it to increase its control over the supply. ...read more.

Conclusion

(66,963) 25,062 Earnings Before Interest And Taxes 165,697 (2,839) (387,195) Interest Expense 129,979 142,925 139,232 Income Before Tax 35,718 (145,764) (526,427) Income Tax Expense - - - Minority Interest - - - Net Income From Continuing Ops 35,718 (145,764) (526,427) Non-recurring Events Discontinued Operations - - - Extraordinary Items (436) (4,169) (30,327) Effect Of Accounting Changes - 801 (10,523) Other Items - - - Net Income 35,282 (149,132) (567,277) Preferred Stock And Other Adjustments - - - Net Income Applicable To Common Shares $35,282 ($149,132) ($567,277) Balance Sheet: PERIOD ENDING 31-Dec-03 31-Dec-02 31-Dec-01 Assets Current Assets Cash And Cash Equivalents 1,102,273 738,254 540,282 Short Term Investments 292,550 562,715 456,303 Net Receivables 132,069 112,282 - Inventory 293,917 202,425 143,722 Other Current Assets - - 67,613 Total Current Assets 1,820,809 1,615,676 1,207,920 Long Term Investments 14,831 15,442 28,359 Property Plant and Equipment 224,285 239,398 271,751 Goodwill 69,121 70,811 45,367 Intangible Assets 518 3,460 34,382 Accumulated Amortization - - - Other Assets 32,469 45,662 49,768 Deferred Long Term Asset Charges - - - Total Assets 2,162,033 1,990,449 1,637,547 Liabilities Current Liabilities Accounts Payable 1,210,641 1,004,724 818,444 Short/Current Long Term Debt 4,216 13,318 14,992 Other Current Liabilities 37,844 47,916 87,978 Total Current Liabilities 1,252,701 1,065,958 921,414 Long Term Debt 1,945,439 2,277,305 2,156,133 Other Liabilities - - - Deferred Long Term Liability Charges - - - Minority Interest - - - Negative Goodwill - - - Total Liabilities 3,198,140 3,343,263 3,077,547 Stockholders' Equity Misc Stocks Options Warrants - - - Redeemable Preferred Stock - - - Preferred Stock - - - Common Stock 4,034 3,879 3,732 Retained Earnings (2,974,428) (3,009,710) (2,860,578) Treasury Stock - - - Capital Surplus 1,899,398 1,649,946 1,462,769 Other Stockholder Equity 34,889 3,071 (45,923) Total Stockholder Equity (1,036,107) (1,352,814) (1,440,000) Net Tangible Assets ($1,105,746) ($1,427,085) ($1,519,749) Amazon.Com 1 ...read more.

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