amazon com Work Hard Have Fun Make History

amazon. com Work Hard Have Fun Make History

The Challenge facing Jeff Bezos l “Far better to dare things, to win glorious triumphs, even though checkered by failure, than to live in the twilight that knows no victory, or defeat” l Theodore Roosevelt

Big Hairy Audacious Goals l “It takes vision and courage to create – l It takes faith and courage to prove” l Jeff Bezos created, but can he prove? ? l Jeff Bezos

A Growing Industry l . l l l Time: 1994 Internet Growth: 2300% per year Jeff Bezos wanted to be part of it BHAG – Online Retailing of Books Amazon. com was born

DEMOGRAPHIC DATA l The next five (5) slides visualize the Amazon story l These slides are followed by discussion questions for the groups to investigate and report on

A Growing Phenomena l l l Total Customers Amazon. com went public in 1996 2002 stats will be out in May YEAR NUMBER 1996 180, 000 1997 1, 500, 000 1998 6, 200, 000 1999 16, 900, 000 24, 700, 000 2001 32, 000

A Growing Presence l l Total Sales Expansion of Products l Partners l Distribution center l l Created huge sales increases YEAR SALES 1996 15, 746, 000 1997 147, 787, 000 1998 609, 819, 000 1999 1, 639, 839, 000 2000 2, 761, 983, 000 2001 3, 122, 433, 000

A Growing Concern l Operating Losses YEAR 1996 Will the bleeding ever 1997 end? 1998 l Year 2000 the dot 1999 bomb 2000 l 2001 LOSS 6, 246, 000 31, 020, 000 124, 543, 000 719, 968, 000 1, 411, 273, 000 567, 277, 000

A Growing Distribution Channel l ± 3, 000 Sq Ft of inventory storage Plans made in 1998 Have already vacated a portion of the properties LOCATION Seattle, WA SQ FT 93, 000 Campbellsville, KY 770, 000 Coffeyville, KS 750, 000 Fernley, NV 332, 650 Grand Forks, ND 130, 000 New Castle, DE 202, 000 Mc. Donough, GA 800, 000

Stock Price Comparisons Stock Prices 1 st qtr – 1999 2 nd qtr – 1999 3 rd qtr – 1999 4 th qtr – 1999 1 st qtr – 2000 2 nd qtr – 2000 3 rd qtr – 2000 4 th qtr – 2000 High 99. 56 110. 63 85. 00 113. 00 91. 50 68. 63 49. 63 40. 88 Low 42. 13 44. 88 41. 00 61. 00 58. 44 32. 47 27. 88 14. 88

Discussion Question #1 l Based on your research, please list five (5) partners that are presently working with Amazon. What is the nature of each relationship. Make sure the business is still ongoing, as some of the partners listed are now defunct.

Discussion Question #2 l Compare and contrast the value chain of Dell with the value chain of Amazon. With special attention being directed to the differences in sales, distribution, and profitability.

Discussion Question #3 l What are the pros and the cons of the distribution Centers that Amazon built in 1999? Why did they build? What is the present use of these?

Discussion Question #4 l In your expert opinion, please answer this: Will they become profitable? If so, when? If not , why not? What are the reasons for over $2 billion dollars in operating losses?

Discussion Question #5 l Please describe and enumerate the Amazon Value chain. Where could they save money in this supply chain as per the Dell Computer example that we discussed last week?

Discussion Question #6 l If you were Amazon management, what steps would you make in order to turn the business around? Also, what is your take on the stock price changes during 1999 and 2000. How over valued was the stock in 1999, and is it undervalued now?