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Amazon.com Company Essay

Amazon.com is an e-commerce company based in Seattle, Washington. Founded by Jeff Bezos in 1994, Amazon was one of the first companies to sell goods on the internet. After it launches, it has been the largest retailer on the worldwide web with its fast growths. Amazon is classified as Consumer Discretionary sector and also Internet Retail industry which sells a broad range of items from books to consumer electronics to home and garden products. Today, Amazon, now became one of Fortune 500 company, was ranked 35th among the largest U.S corporation. The company’s management team consisted of Jeff Bezos who is Chairman of the Board of Amazon.com and also Chief Executive Officer, and an eight-member board of directors. Amazon.com started its business with only a unit of book. Jeff Bezos decided to sell books for first on his website with some special reasons. In 1994, when he started Amazon.com, customer’s reliability on e-commerce was rather lower, so people used to be afraid of getting delivered wrong products from internet purchases.

Therefore, people used to keep aloof from buying products online. Considered this, Jeff Bezos selected books that people could be guaranteed same quality of product regardless of where they purchase. One more interesting about Amazon.com is that it launched in 1994, but the actual transaction happened a year after, in 1995. They established databases of enormous amount of books and convenient purchasing services for a year. In result, Amazon.com was able to carry more than 110 M kinds of book. Amazon.com has brought $ 74,452M revenue which is an increase of 17.9% from 2012. Amazon.com controlled $32.555M in 2012 and $40.159 in 2013. It also profits $274 M which is an increase of 114% from 2012. In 2013, their total cost of goods sold was $18.806 M and gross markup reached to 27.2%.By introducing two new product categories every year for almost a decade, its market share represents one third of U.S e-commerce sales.

Amazon.com is often referred as The Everything Store. As we can notice from its second name, Amazon.com carries every items that web retailer could sell. Its top three business units are including books, electronics and Toy & Games. Book has been one of the bestselling categories of Amazon.com. As demand of e-book is going up, electronic book also has recorded high sales (actually, higher than its book sales). With Its own table for e-book and various kinds of books they carry, Amazon not only has competitive advantage among its competitors, but also has already been making high sales on them. Another bestselling product of Amazon.com is tablets. Amazon has launched its own tablet ‘Fire HD’ which has similar feathers and its own OS but price is much cheaper than any other tablets currently selling in the market. Currently, Amazon has 5.8 percent shares and it maintain in third place following after Apple and Samsung.

With its own tablet, Amazon is increasing their market shares on tablets. Amazon already has its own game studio to produce video games and its own Fire receiver, so that they attracted many gamers. Recently, Amazon is planning to take over the video game streaming video platform twitch TV to start their new game business. With so many different products and services, Amazon has a divisional structure. In a divisional structure, different departments for different products and services allow department heads to appropriately focus their resources and results, as well as monitor the organization’s performance. This structure is best for such a large organization because it is the most flexible. Amazon’s organizational structure is comprised of CEO and founder Jeffery Bezos and an eight-member board of directors.

The CEO oversees the Chief Financial Officer, the Chief Technology Officer and the 8 departments: Business Development, e-Commerce Platform, International Retail, North America Retail, Web Services, Digital Media, Legal & Secretary, and Kindle. The CFO oversees the Real Estate and Control department. International Retail oversees three separate departments: China, Europe and India. North America Retail oversees the following five departments: Seller Services, Operations, Toys, Sports & Home Improvement, Amazon Publishing and Music & Video. The Web Services department oversees Amazon S3 and Database Services. Other departments include Product Development & Studios, Europe Operations, Global Advertising Sales, Computing Services, and Global Customer Fulfillment. 1.3

E-businesses are rapidly evolving and intensely competitive. The principal competitive factors in its retail businesses include selection, price, and convenience, including fast and reliable fulfillment. Additional competitive factors for its seller and enterprise services include the quality, speed, and reliability of our services and tools. As consider these factors, the two top competitors of Amazon.com are E-bay.inc and Google.com.

First, between Amazon and Google, the two companies now compete in a wide range of areas such as online advertising, distribution, mobile terminals, cloud computing. Currently, Google is challenging to amazon’s main businesses which are shipping and shopping. So, Google recently has launched its own shipping service ‘Google Shopping Express’ which feathers same as like Amazon prime but with cheaper annual membership fees to enhance its competitiveness. Amazon.com also entered to ‘cloud’ market which Google has strong power on the market to compete. Amazon is expanding the territory of business, so that it is becoming integrated IT enterprise like google.

Therefore, of the two companies, are expected to go over further intensify competition. If we put those groups in comparison by company performance, Amazon.com made $ 74,452 M and Google had $59,825M revenues in 2013 which means Amazon.com has more revenue than Google by 19.6%. On the other hands, for the profit and total asset of companies, Google is in the higher position. Google controls $110,920M of total asset, while Amazon controls $40,159M. In addition, Google profits $12,920M, while Amazon is a mere $745M. For number of employees, Google has 52,069 employees and Amazon.com has 132,600 employees.

Second, between E-bay and Amazon, E-Bay is always been pointed out as amazon’s top competitors. eBay Inc., (stylized as e bay), is an online auction and shopping website in which people and businesses buy and sell a broad variety of goods and services worldwide. E-bay has same feather as it is running retail business with Amazon.com, but there is critical difference in that e-bay has auction-style sales. When we look at E-bay’s company performance, it has less revenue which is $16,047M than any its competitors referred above. However, it controls $41,488M which is bigger than amazon has for their total asset. Also, E-bay profits $2,856M in 2013, while Amazon.com did $274M, meaning E-bay made 10times more profits than Amazon.com. E-bay has made 33,500 employees.

Alibaba which is noticed as a big foreign competitor of Amazon is a company founded in china. Alibaba’s consumer-to-consumer portal Taobao, similar to eBay, features nearly a billion products and is one of the 20 most-visited websites globally. The Group’s websites accounted for over 60% of the parcels delivered in China by March 2013, and 80% of the nation’s online sales by September 2014. Alipay, an online payment escrow service, accounts for roughly half of all online payment transactions within China. China’s huge trading merchant Ali Baba’s company value has estimated as $215 billion dollars by IPO. This is astounding figure which is higher than Amazon and e-bay combined and also because other its competitors such as Google and Amazon.com have made better sales than Ali Baba. Investors focus on its high profit and fast growth. Also, it possesses many its stores in china and it has still a high potential for growth within China.

Amazon.com,10K, 2013

Emil Protalinski “IDC: Apple’s iPad fell to 33.8% tablet share in Q4 2013, Samsung took second with 18.8%, Amazon third with 7.6%” from TNW blog. Google.com/finance (income statement, annual data)

www.Amazon.com/ investor relation (Annual Reports and Proxies and officer and directors) Ryan mac “Amazon Pounces On Twitch After Google Balks Due To Antitrust Concerns” on Forbes http://en.wikipedia.org/wiki/Alibaba_Group

(Amazon.com main financial performance for 2013) from google finance

(E-bay main financial performance for 2013) from google finance

(Google.com main financial performance for 2013) from google finance

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