How would you summarize the following case study (good, bad, better)? Identify the strategic managers?

Overview Founded by Jeff Bezos, online giant Amazon.com, Inc. (Amazon), was incorporated in the state of Washington in July, 1994, and sold its first book in July, 1995. In May 1997, Amazon (AMZN) completed its initial public offering and its common stock was listed on the NASDAQ Global Select Market. Amazon quickly grew from an on- line bookstore to the world's largest online retailer, greatly expanding its product and service offerings through a series of acquisitions, alliances, partnerships, and exclusivity agreements. Amazon's financial objective was to achieve long-term sustainable growth and profitability. To attain this objective, Amazon maintained a lean culture focused on increas- ing its operating income through continually increasing revenue and efficiently managing its working capital and capital expenditures, while tightly managing operating costs. The name "Amazon" was evocative for founder Jeff Bezos of his vision of Amazon as a huge natural phenomenon, like the longest river in the world. He envisioned the company to be the largest online marketplace on earth someday. By 2008, Amazon had become a global brand, with websites in Canada, the United Kingdom, Germany, France, China, and Japan, with order fulfillment in more than 200 countries. Its opera tions were organized into two principal segments: North America and International Operations, which grew to include Italy in 2010 and Spain in 2011. By 2012, Amazon employed more than 56,200 people around the world working in the corporate office in Seattle, and in software devel- opment, order fulfillment, and customer service centers in North America, Latin America, Europe, and Asia. The authors would like to thank Barbara Gottfried lodifiermann nan Apala. I 9-2 CASE 9 Amazon.com, Amazon Corporate Governance 945 of the con ed: the audit Com Developer traded companies have on committee to hip Development and Com tinuity of capable La Beras is the Chairman of the Board and CEO of Amazon and owns 10 Aman has three board committees of which two are standard warnance committee. The third committee, the Leadership and Compensation Committee, is uncommon. Most publicly traded compensation committee; however, it is unusual for the compensation con leadership development as part of its mandate. The Leadership Develo pensation Committee "monitors and periodically assesses the continuity agement, including succession plans for executive officers." Amazon's board is not populated by CEOs or retired CEOs. It includes se capitalists, a number of senior level executives from varied industries, an emine and a representative from the non-profit sector. Amazon's board has served together for a long time. This implies a deeper unders of the company and increasing familiarity and even friendship amongst the group. Thi to discourage independent thinking and objectivity. All of it is further proof that Jeff Bezos is a strong CEO and runs the company. cludes several venues eminent scie er understanding Retail Operations/Amazon's Superior Website As people became more comfortable shopping on line, Amazon developed its website advantage of increased Internet traffic and to serve its customers most effectively. The marks of Amazon's appeal were ease of use; speedy, accurate search results selection. Die and convenience; a trustworthy transaction environment: timely customer service and for reliable fulfillment all of it enabled by the sophisticated technology the company encouraged its employees to develop to better serve its customers. The site, which offered a huge am products sold both by itself and by third parties, was particularly designed to create a person alized shopping experience that helped customers discover new products and make efficient informed buying decisions. Key to Amazon's success was continual website improvement. A huge part of the technological work done for Amazon was dedicated to identifying problems, developing solutions, and enhancing customers' online experience. Jacob Lepley, in his "Amazon Marketing Strategy: Report One," notes that when you visit Amazon... you can use to find just about any item on the market at an extremely low price. Amazon has made it very simple for customers to purchase items with a simple click of the mouse... Which you have everything you need, you make just one payment and your orders are processed. This simple system is the same whether a customer purchases directly from Amazon from one of its associates. Pursuing perfection, Amazon was aggressive in analyzing its website's traffic and mou fying the website accordingly. Amazon particularly excelled at customer tracking.com data from every visit to its website. Utilizing the information. Amazon then directed us products that it surmised they might be interested in because the item was either relate a product that they had previously searched for or purchased by another Amazon custo looking for a similar product. Recommendations were also customized based on the information customers pro about themselves and their interests, and their ratings prior nurchased. Amazon also coll data on those who had never visited any of its websites, but who had received gifts from who had used the site. stomers provided also collected ved gifts from those arrative review and rate a product on a scale al customers Amazon engaged in permission One of Amazon's most distinctive features was the co ratings/reviews provided by private individuals to help others make istinctive features was the community created based on the chasing decisions. Anyone could viduals to help others make more informed pur idea tive review and rate a pro of 1-5 stars, and/or comment on others' reviews. Individuals could also So You'd Like... guides and Listmania lists based on Amazons reviews. Individuals could also create their own ings and post them or send them to friends and family. To streamline mania" lists based on Amazon's products offer- Amazon also consolidated different and family. To streamline customer research d e into a single product available for commentary that simplified commentary a product (e.g., DVD, VHS, Blu-ray disk) DVD, VHS, Blu-ray accessibility. To further target potential customers Amazon engaged in permission marketing.cc ing permission to e-mail customers regarding i n duction promotions based on per purchases on the assumption that a tarted email was more likely to be read than a banke e-mail. This strategy was hugely appreciated by Amazon customers, further contributing to Amazon's success In addition, Amazon purchased pay-per-click advertisements on search engines such as Google to direct browsing customers to its websites. The ads appeared on the left-hand side of the search list results, and Amazon naid a fee for each visitor who clicked on its sponsored link At the same time, as "TV and billboard ads were roughly ten times less effective when compared to direct or online marketing when concerning customer acquisition costs. Amazon reduced its offline marketing. The strategy was simple: as customers shopped online, online marketing was key. However, in 2010. Amazon initiated a small Television advertising campaign to increase brand awareness Finally, to round out its customer care. Amazon expedited shipping by strategically local ing its fulfillment centers near airports where rents were also cheaper, giving Amazon the Two-pronged advantage of speed and low cost over its competitors. Furthermore, in the United States, the United Kingdom, Germany, and Japan. Amazon offered subscribers to Amazon Prime the added convenience of free express shipping. Amazon Prime's free next day de- livery endeared it to Amazon customers, again contributing to the customer loyalty that was key to Amazon's success. Amazon Prime cost $79 annually to join and included free access! to Amazon Instant Video. The overarching objective of the company was to offer low prices. convenience, and a wide selection of merchandise, a pared down, yet wide-reaching strategy that made Amazon such a huge success. Diversified Product Offerings Amazon diversified its product portfolio well beyond simply offering books, which in tur allowed it to diversify its customer mix. In 2007. Amazon successfully launched the Kindle. its $79 e-book reader, which offered users more than one million reasonably priced books and newspapers easily accessed on its handheld device. Competitor Apple, Incthen intro duced the iPad, the first tablet computer, in January 2010, sparking further development of mobile readers. E-book sales took off immediately, increasing by more than 100% accord ine to the Association of American Publishers. Eager to compete in a market for which it was uniquely positioned, Amazon quickly developed its own low-cost tablet, the Kindle Fire Android-based tablet with a color touchscreen priced at $199, more than $300 lower than the iPad sacrificing profit margins in search of sales volume and market share gains. Other tech giants such as RIMM and HP were unable to compete with the iPad. Only the Son zon Kindle and Kindle Fire, and the Samsung Galaxy and Series 7 tablets Nook, the Amazon Kindle and Kindle Fire, and the Samsun nt 60% of market share. Ultimately, however, Amazon's huge challenged Apple's consistent 60% of market share. Ultimately, however pot simply from the sale of Kindle hardware and the growth of e-book sales growth derived not simply from the sale of Kindle hardwar 94 CASE 9 Amarot.com, Inc. sy website access the hooks, music, eo games. More than the Kindle, Kindle e from home ducts, sports and one but from its diversification and the continual expansion of the easy w by mobile devices By 2010, 439 of Amazon net sales were from media, including be video products, magazine subscriptions, digital downloads, and video of all Amazon sales came from computers, mobile devices including the and Kindle Touch, and other electronics, as well as general merchandise den supplies to groceries, apparel. jewelry, health and beauty products equipment, tools, and auto and industrial supplies. Amazon also offered its own credit card, a form of co-branding that hen Amazon, the credit card company (Chase Bank), and the consumer. Ama cause it received money from the credit card company both directly from and indirectly from fees generated from non-Amazon purchases. In additi efited from the company loyalty generated by having its own credit card the and uses every day. The credit card company gained from Amazon's high visit: its potential customer base and transactions. And the consumer earned credit to tificates with each use of the card. benefited alle Amazon benefit om Amazon purchase Wition. Amazon be and the consume visibility, inte edit toward gifts ot and developed Partnerships Amazon leveraged its expertise in online order taking and order fulfillment and de partnerships with many retailers whose websites it hosted and managed, including rently or in the past) Target, Sears Canada, Bebe Stores, Timex Corporation, and Me Spencer. Amazon offered services comparable to those it offered customers on its websites, thus freeing those retailers to focus on the non-website, non-technological of their operations. In addition, Amazon Marketplace allowed independent retailers and third-party selles to sell their products on Amazon by placing links on their websites to Amazon.com orn specific Amazon products. Amazon was "not the seller of record in these transactions, bu instead earn[edy fixed fees, revenue share fees, per-unit activity fees, or some combination thereof. Linking to Amazon created visibility for these retailers and individual seller adding value to their websites, increasing their sales, and enabling them to take advantage of Amazon's convenience and fast delivery. Sellers shipped their products to an Amazon warehouse or fulfillment center, where the company stored it for a fee, and when in was placed, shipped out the product on the seller's behalf. This form of affiliate marke ing came at nearly no cost to Amazon. Affiliates used straight text links leading direct to a product page and they also offered a range of dynamic banners that featured de content. Web Services uding ecommerce As a major tech player, Amazon developed a number of web services, including cu database, payment and billing. web traffic, and computing These web services pro access to technology infrastructure that developers were able to utilize to enable van of virtual businesses. The web services (many of which were free) created a reliable and inexpensive computing platform that revolutionized the online presence of nesses. For instance, Amazon's e-commerce Fulfillment By Amazon (FBA) progra merchants to direct inventory to Amazon's fulfillment ce Amazon packed and shipped. This freed merchants from a complex ordering po ent centers, after products were pure lize to enable various types ated a reliable, scalable Sence of small busi program allowed were purchased 18 process while allowing them control over their inventory Amazon's Fulfillment Web Servo 10 BAS program. FWS let retailers m i lities straight into their own vastly enhancing their business capabilities. 2015. Amazon announced a cloud stor solution Amazon Glacier) from Am. Web Services (AWS), a low-cost solution for t hiving backups, and other long-ten storage projects where data not accessed frequently could he retained for future reference Companies often incurred significant costs for data archiving in anticipation of growing backup demand, which led to under-utilized canacity and wasted money with Glacier, companies were able to keep costs in line with actual usage. so managers could know the exact cost of their storage systems at all times With Amazon Glacier. Amazon continued to dominate the space of cold storage, which had first come into prominence in 2009. amidst competitors such as Rackspace (RAX) and Microsoft (MSFT) offering their own solutions. By 2012, Amazon Web Services were a crucial facet of Amazon's profit base, and Amazon was one of the lead players in the fast-growing retail ecommerce market. Seeing huge growth potential, Amazon made the decision to expand Amazon Web Services (AWS internationally and invested heavily in technology infrastructure to support the rapid growth in AWS. Though its investments in ecommerce threatened to suppress its near-term margin growth, Amazon expected to benefit in the long term, given the significant growth potential in domestic and even more so. in international ecommerce. nazon's Acquisition of Zappos, Quidsi, ing Social, and Lovefilm