Field Case Study #1
Introduction to Innovation - ENTR 4001
Christopher Sean Glover
Table of Contents
Brief Organization Profile
Field Case Study for AMAZON.COM
Brief Organization Profile
1. Identify the business classification (service, manufacturer, retail, transportation, utility, financial, agriculture, nonprofit, social entrepreneur…). Briefly describe the mission of the organization that is its purpose or reason for being.
Amazon’s business classification would be considered: service, retail, and manufacturer. The company provides a service to millions by putting retail within reach of anyone who can access a computer. At the same time, the company is responsible for manufacturing and creating things such as the Amazon Kindle books, Amazon Fire TV (Stick), etc. Amazon was founded by Jeff Bezos in 1994 and the company’s mission is, “'to be Earth’s most customer-centric company, where customers can find and discover anything they might want to buy online, and endeavors to offer its customers the lowest possible prices,’ Amazon.com and other sellers offer millions of unique new, refurbished, and used items”1 in an array of different categories.
2. What is the most recent annual revenue and profitability? If it is a nonprofit or social entrepreneur, how do they assess their performance?
As of January 29, 2015, it was reported that Amazon’s net sales increased 20% in 2014 to $88.89 billion in revenue compared to $74.45 billion in 2013.2 From that, their profits were down from $241 million in 2013 to $214 million in 2014.3
3. Identify the type of strategy used by the business. What is the competitive situation? Are they competing in existing market space or are they competing in uncontested space?
Amazon’s vision and strategy are fairly simple. They choose to “Relentlessly focus on customer experience by offering our customers low prices, convenience, and a wide selection of merchandise.”4 Competitively there are thousands of sites that compete with Amazon. Wal-Mart, eBay, Microsoft, and Apple are just a few examples of the big players that are competing in the existing market space.
4. Describe the primary product, service, process or solution. (If there is more than one, focus on the primary one)
Originally Amazon was a website created in 1995 by founder Jeff Bezos, as an online retail store for over one million books and titles at consistently low prices.4 At the time their were hundreds of bookstores and libraries, but there wasn’t one central location that could provide every book and title under one roof, Amazon was the solution to that problem. Since then, the company has grown online as an online service to “offer millions of unique new, refurbished, and used items in categories such as: books, movies, music & games, digital downloads, electronics & computers, home & garden, toys, kids & baby, grocery, apparel, shoes & jewelry, health & beauty, sports & outdoor, and tools, auto & industrial.” 1
5. What is the value proposition?
Amazon’s value proposition is based on low cost prices for a high selection of unique new, refurbished, and used items.5 The organizational system used to order and deliver these items relies entirely on “automated order management system, tightly linked to suppliers and payment networks, allowing them to minimize human intervention, therefore reducing costs” for the company and the consumer.5 The benefits to this online retail/service solution are endless. But mainly, Amazon has just streamlined a way to make just about anything available to anyone that has access to the Internet at anytime. 6. Who are the target customers? Local, Regional, National, Domestic/Global?
Due to Amazon’s extremely efficient...
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