Virginia RosalesAnabel JuárezJaime Millán

Vladimir Matović

October 2010

Business Models: Themes and Issues

- from A to ZCompany Overview

Mission, Vision & ValuesCore Value Proposition, Objective & StrategyThree Customer Sets

Attention Economy and e-TrustBusiness Model

Amazon.com Business Model EvolutionBusiness Model Canvas – The 9 Building BlockseBook/KindleValue Capture

Diversifying Revenue Streams Geographical Expansion & Product Range Amazon.com Acquisitions and Investments Sales

Conclusion Sky is the limit

References

- from A to ZCompany Overview

Mission, Vision & ValuesCore Value Proposition, Objective & StrategyThree Customer Sets

Attention Economy and e-TrustBusiness Model

Amazon.com Business Model EvolutionBusiness Model Canvas – The 9 Building BlockseBook/KindleValue Capture

Diversifying Revenue Streams Geographical Expansion & Product Range Amazon.com Acquisitions and Investments Sales

Conclusion Sky is the limit

References

Company Overview

Founded in 1994in Seattle, USA

28,300 employees

Global leader in e-commerce

Wide range of products

Worldwide network of fulfilment

Mass customisation

Customer experience Affiliations Stickiness

• ‘To leverage technology and the expertise of our invaluable employees to provide our customers with the best shopping experience on the Internet.’

Mission

• ‘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.’

Vision

• Customer Obsession• Innovation• Bias for Action• Ownership• High Hiring Bar• Frugality

Values

• ‘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.’

Objective

• Price• Convenience• Selection

Core Value Proposition

• ‘To ‘Get Big Fast’ by investing aggressively in new product categories and new businesses, by spending money on brand awareness and getting new customers.’

Strategy

Strategy

Source: www.amazon.com

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

DevelopersSellers

- from A to ZCompany Overview

Mission, Vision & ValuesCore Value Proposition, Objective & StrategyThree Customer Sets

Attention Economy and e-TrustBusiness Model

Amazon.com Business Model EvolutionBusiness Model Canvas – The 9 Building BlockseBook/KindleValue Capture

Diversifying Revenue Streams Geographical Expansion & Product Range Amazon.com Acquisitions and Investments Sales

Conclusion Sky is the limit

References

- from A to ZCompany Overview

Mission, Vision & ValuesCore Value Proposition, Objective & StrategyThree Customer Sets

Attention Economy and e-TrustBusiness Model

Amazon.com Business Model EvolutionBusiness Model Canvas – The 9 Building BlockseBook/KindleValue Capture

Diversifying Revenue Streams Geographical Expansion & Product Range Amazon.com Acquisitions and Investments Sales

Conclusion Sky is the limit

References

How long do you stay @ ?

Attention attraction and retention

Customer’s needsRelevant ContentFrequent UpdateBuying habitsReactions to Web site designDemographicsFavorite and least favorite products

HOW?

GOAL:

Brand DifferentiationCustomer Loyalty

e-TrustQualityValueTimelinessAppropriateness of Goods & ServicesBusiness ReputationSecurity in Transactions

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

Products & Services

Content

Interactivity & Production Values

Personalization

Customization Ownership & Belonging

Co-Creation & Recognition

2

34

Variety

5 Speed & Delivery

1Easy

Navigation

- from A to ZCompany Overview

Mission, Vision & ValuesCore Value Proposition, Objective & StrategyThree Customer Sets

Attention Economy and e-TrustBusiness Model

Amazon.com Business Model EvolutionBusiness Model Canvas – The 9 Building BlockseBook/KindleValue Capture

Diversifying Revenue Streams Geographical Expansion & Product Range Amazon.com Acquisitions and Investments Sales

Conclusion Sky is the limit

References

- from A to ZCompany Overview

Mission, Vision & ValuesCore Value Proposition, Objective & StrategyThree Customer Sets

Attention Economy and e-TrustBusiness Model

Amazon.com Business Model EvolutionBusiness Model Canvas – The 9 Building BlockseBook/KindleValue Capture

Diversifying Revenue Streams Geographical Expansion & Product Range Amazon.com Acquisitions and Investments Sales

Conclusion Sky is the limit

References

2007

1995

2001

2000

1999

2002

2010

Auctions & zShops

eBooks/Kindle

E-commerce Platform/

Web Services

Marketplace

OnLine Book Retailing

Partherships &

Logistic Services

Business Model Evolution

Business Model Canvas9 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)

MARKETINGTECHNOLOGY & CONTENT

FULFILMENT

SALES MARGINS

AUTOMATED SERVICES & CO-CREATION

(CUSTOMISED ONLINE PROFILES &

RECOMMENDATIONS)

AMAZON.COM (& OVERSEAS SITES)

AFFILIATES

IT INFRASTRUCTURE, SOFTWARE & EXPERTS

GLOBAL FULFILMENT INFRASTRUCTURE

FULFILMENT & IT INFRASTRUCTURE

DEVELOPMENT AND MAINTENANCE

Business Model Canvas

GLOBAL MARKET (SELLERS &

CONSUMERS)INTERMEDIATION

SERVICES

COMMISSIONS

SELLERS (COMPANIES & INDIVIDUALS)AGGREGATION OF

DEMAND (LONGTAIL)

FULFILMENTCOMPANIES (ONLINE &

TRADITIONAL RETAILERS)

LOGISTICS NETWORK

PARTNERSHIPS & ALLIANCES

DEVELOPERSMASS-CUSTOMISED

WEB SERVICES

APIsPORTABLE DEVICE

PRODUCT DEVELOPMENT, AND

PROMOTION

HARDWARE MANUFACTURERS

GLOBAL MARKET (CONSUMERS)

LOW PRICESCONVENIENCE

WIDE SELECTIONCUSTOMER EXPERIENCE

LOGISTIC PARTNERS

AFFILIATES (PUBLISHERS, AUTHORS,

BOOKSTORES…)

Online RetailingAuctions & zShopsMarketplacesPartnerships and Logistic Service ProviderE-commerce Platform/Web ServiceseBooks/Kindle

COMPANIES (ONLINE & TRADITIONAL

RETAILERS)

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

eBooks downloaded from Amazon not exclusive to Kindle

Kindle eBooks add 35% to a physical book’s sale on Amazon

Amazon reported 80% of eBook market

"Our vision is to have every book ever printed, in any language, all available in tinder 60 seconds.“

- Jeff Bezos, Amazon.com CEO

Capture Value:transforming earnings into profits

Capital efficiency

Inventory turnover

Cash generative

cycle

Maximize Profit Dollars, Not Margins

- from A to ZCompany Overview

Mission, Vision & ValuesCore Value Proposition, Objective & StrategyThree Customer Sets

Attention Economy and e-TrustBusiness Model

Amazon.com Business Model EvolutionBusiness Model Canvas – The 9 Building BlockseBook/KindleValue Capture

Diversifying Revenue Streams Geographical Expansion & Product Range Amazon.com Acquisitions and Investments Sales

Conclusion Sky is the limit

References

- from A to ZCompany Overview

Mission, Vision & ValuesCore Value Proposition, Objective & StrategyThree Customer Sets

Attention Economy and e-TrustBusiness Model

Amazon.com Business Model EvolutionBusiness Model Canvas – The 9 Building BlockseBook/KindleValue Capture

Diversifying Revenue Streams Geographical Expansion & Product Range Amazon.com Acquisitions and Investments Sales

Conclusion Sky is the limit

References

Source: www.amazon.com

Source: www.meettheboss.com

z

Worldwide Sales MixQ1 ’04 – Net Sales $5,710 MM

76%

Q4 ’09– Net Sales $24,509 MM

52%

22%

2% 3%

45%

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)

Source: www.amazon.com

International Sales

2004 2005 2006 2007 2008$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

$8,000

$9,000

$10,000

$3,074

$6,740

$8,938

MM

• 2008 International sales 47% of WW sales, up from 45% in 2007• Shipments to over 200 countries

Source: www.amazon.com

- from A to ZCompany Overview

Mission, Vision & ValuesCore Value Proposition, Objective & StrategyThree Customer Sets

Attention Economy and e-TrustBusiness Model

Amazon.com Business Model EvolutionBusiness Model Canvas – The 9 Building BlockseBook/KindleValue Capture

Diversifying Revenue Streams Geographical Expansion & Product Range Amazon.com Acquisitions and Investments Sales

Conclusion Sky is the limit

References

- from A to ZCompany Overview

Mission, Vision & ValuesCore Value Proposition, Objective & StrategyThree Customer Sets

Attention Economy and e-TrustBusiness Model

Amazon.com Business Model EvolutionBusiness Model Canvas – The 9 Building BlockseBook/KindleValue Capture

Diversifying Revenue Streams Geographical Expansion & Product Range Amazon.com Acquisitions and Investments Sales

Conclusion Sky is the limit

References

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

Sky is the limit

Thank you!

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