1. Summary:
Why is Amazon.com so successful?
• The goal of this presentation is:
Ø First, to show how big is Amazon
Ø Then, to explain in what Jeff Bezos is a genius
Ø And finally, to illustrate his visions
Friday 17th February 2012 Why is Amazon so successful? 1

2. WHY IS AMAZON.COM SO
SUCCESSFUL?
Friday 17th February 2012

3. Amazon.com, a digital shop around the
corner…
Example:
Friday 17th February 2012 Why is Amazon so successful? 3

4. … and a digital colossus.
Friday 17th February 2012 Why is Amazon so successful? 4

5. Amazon.com is a giant…
E-commerce
Y/Y growth for Q1 2011 +38% 3 x growth of
market
Market cap $90 bn 2 x market cap
Customers 137 m 2 x customers
Employee 33,700 15 x more than
Turnover $34 bn 16% more than
Internet traffic rank 16th before
Retail brand 1st before
Paid out $1.2 bn to buy
Friday 17th February 2012 Why is Amazon so successful? 5

6. Why? Because Jeff Bezos had a vision.
“You could build a store online that simply could not
exist in any other way.
You could build a true superstore with exhaustive
selection; and customer value selection.”
Jeff Bezos
1 Digital enables limitless inventory
2 Digital boosts customer care
3 Digital allows higher margins, lower prices
Friday 17th February 2012 Why is Amazon so successful? 6

7. To enable limitless inventory, Amazon
needed to get big fast…
More
merchants
More More
traffic selection
Growth
Better customer
experience
Friday 17th February 2012 Why is Amazon so successful? 7

8. … and achieved it by three different
means.
• Build
Ø From time to time, Amazon simply creates a new category.
Ø Example:
• Buy
Ø When competitors are already established, Amazon may buy
out an incumbent.
Ø Example:
• Partner
Ø In some vertical markets, Amazon offers its technology
service and e-commerce expertise to third parties.
Ø Example:
Friday 17th February 2012 Why is Amazon so successful? 8

9. Did you know that all these companies
belong to Amazon.com?
Friday 17th February 2012 Why is Amazon so successful? 9

10. Why? Because Jeff Bezos had a vision.
“You could build a store online that simply could not
exist in any other way.
You could build a true superstore with exhaustive
selection; and customer value selection.”
Jeff Bezos
1 Digital enables limitless inventory
2 Digital boosts customer care
3 Digital allows high margin, lowest prices
Friday 17th February 2012 Why is Amazon so successful? 10

11. Jeff Bezos has built a customer centric
company based on innovations.
An outstanding customer service E-commerce easier than commerce
Why
• “If you make customers unhappy on • 1995: Customer reviews
the internet, they can each tell • 1997: Recommendations & bundle
Select • 2001: Look inside the book
6,000 friends.”
• 2003: Search inside the book
• Customer service is the only human-
to-human interaction for an e-
commerce website.
Order • 1997: 1-click ordering
How
• Amazon developed its own software
to manage e-mail centers and 90% of Receive • 2001: Where’s my stuff
customer service is done by e-mail. • 2002: Free supersaver shipping
• Human: Every employee, even the
CEO, spends two days every two
years on the service desk to answer
calls and help customers.
Friday 17th February 2012 Why is Amazon so successful? 11

12. Why? Because Jeff Bezos had a vision.
“You could build a store online that simply could not
exist in any other way.
You could build a true superstore with exhaustive
selection; and customer value selection.”
Jeff Bezos
1 Digital enables limitless inventory
2 Digital boosts customer care
3 Digital allows higher margins, lower prices
Friday 17th February 2012 Why is Amazon so successful? 12

13. To be cheaper than its competitors,
Amazon.com focuses on volume…
Better customer
experience
Lower
Growth
prices
Lower cost
structure
Friday 17th February 2012 Why is Amazon so successful? 13

14. … and its competencies such as logistics
and tracking.
• Optimizing its supply chain thanks to its digital advantage:
Ø Automatically chooses the cheapest origin for the customer’s order in real-
time.
Ø It will re-optimize it based on the other customers’ orders.
• A data driven company:
Ø Amazon pionneered A/B testing in 1997.
Ø In 2001, Amazon implemented software to measure its costs for each
shipped product.
• Sharing cost centers:
Ø With Fulfillment by Amazon, sellers let Amazon handle their logistics.
Ø Amazon monetizes its know-how in scalability and reliability.
Friday 17th February 2012 Why is Amazon so successful? 14

15. Other brilliant ideas.
• Digital driven supply chain
Ø Amazon hired from the expert, Walmart.
• Amazon Web Services monetizes Amazon’s know-how in scalability and
reliability.
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16. Amazon Web Services drives these
companies.
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