MGMT 702 101 CRAFTING AND EXECUTING STRATEGY Research and Ca

MGMT 702 (101) CRAFTING AND EXECUTING STRATEGY: Research and Case Analysis: Amazon.com Inc. (Part B)

Please Google and make a careful study of the case, Amazon.com’s Business Model and Its Evolution, the company’s 2016 Annual Report (10-K Filing), specific information provided on the company’s website, textbook’s references to the company, and the company\'s video on youtube . Then answer the questions stated below. Your submission should be a word-processed document, prepared in the usual manner (cover page, font size 12, double space, appropriate headings and numbering, end notes, single-side printing, etc.) The link to the selected video (the 2001 C-SPAN interview entitled, “How Did Jeff Bezos Start Amazon? His Background, the Internet & the Future of E-Commerce”) is: https://www.youtube.com/watch?v=uY8Vx0X3xvs&t=56s Questions on the 2016 Annual Report

1. For the purpose of updating the information provided in the case material, please prepare a table indicating the revenues (net sales) in $B, the net income in $B, basic earnings per share, dividends paid, and total assets in $B with respect to the fiscal years 2015 and 2016.

2. Please review Jeff Bezos’s Letter to the Shareholders in the 2016 Annual Report. State clearly and fully what insights you have gained on the topic of decision making at Amazon.com.

3. Jeff Bezos has always included in the company’s Annual Reports his 1997 Letter to Shareholders (reprinted from the 1997 Annual Report). Why do you think he is doing this? And from whom do you think he got this idea? Also, please review Bezos’ discourse on the company’s fundamental management and decision-making approach. Offer full and accurate statements of the three aspects that impressed you the most, as a student of the discipline of strategic management. Also, please indicate why you were so impressed. Now, be very careful in the formatting of your answer for the purposes of clarity and ease of reading.

4. Please identify fully, clearly, and separately all the current and potential competitors of Amazon.com. Then, if you were to think about the application of Michael Porter’s Five Forces Model for industry analysis, in what industry or industries would you say Amazon.com competes?

5. State the revenues in $B generated by AWS for the fiscal years 2014, 2015, and 2016. And what exactly is AWS all about? (2 marks) Questions on the case material.

6. State accurately and fully the company’s “strategy” put forward by the authors at pages C- 10 and C-11. You are a student of the discipline of strategic management. Is this the appropriate use of the term strategy? And what indeed is the business-level strategy of Amazon.com Inc.?

7. Identify accurately in separate and numbered paragraphs and describe five specific ways in which the business model of Amazon.com has changed significantly over time. And to what specific concept in Chapter 1 of your textbook do these relate.

Questions on the video

8. What were the interesting points Jeff Bezos made in relation to (a) scale (b) marketing expenses and (c) Benjamin Graham? Also, state two distinct insights you have gathered about strategic management from the video, which are not related to (a), (b), and (c).

Question related to the article “Primed’, The Economist of March 25, 2017

9. What are network effects in the specific context of Amazon.com? And what exactly is the business logic of Amazon’s prime subscription?

Solution

1. The important parameters are shown in the tablebelow:

2. Insights from Jeff Bezos\' letter to the shareholders:

3. Why JB attaches copy of 1997 letter?

In 1997, Amazon.com was a startup riding the \".com\" wave. In 1996 it had achieved tremendous growth in clientele, revenues and market share. Through these, JB is trying to keep the startup culture alive in his organization. He also points out that it is necessary to take risks that pay back in long term. By risks, he means having a different strategy than others, having the stomach to fight off bigger competitors, etc. The philosophy of letter in 1997 is still at heart of Amazon.com\'s existence, viz. customer focus, innovation, market leadership, risk, etc.

4. Amazon competes in multiple industries therefore its competitors can be classified as such: