Introduction

Amazon is the largest e-commerce chain in the world. Amazon.com started as an online bookstore,

but soon diversified, selling DVDs, VHSs, CDs, video and MP3 downloads/streaming, software,

video games, electronics, apparel, furniture, food, toys, & jewellery. The company also produces

consumer electronicsnotably, Amazon Kindle e-book readers, Fire tablets, Fire TV and Fire

Phone and is a major provider of cloud computing services. Amazon has a huge number of

services that it provides to corporates and well as consumers. It has developed into a something

more that an Ecommerce Company and now provides a huge range of Products and Services that

are connected to every industry in the world.

Amazon has separate retail websites for United States, United Kingdom & Ireland, France, Canada,

Germany, The Netherlands, Italy, Spain, Australia, Brazil, Japan, China, India and Mexico. Amazon

India will soon start offering music, movie and video streaming services in India.

[Amazon India may start offering music, movie and video streaming services in India - Economic Times. (n.d.). Retrieved from http://articles.economictimes.indiatimes.com/2015-01-02/news/57611321_1_amazon-india-amazon-prime-subscription-service]

Amazon also offers international shipping to many other countries for some of its products. It also

plans to launch its website in Poland and Sweden soon.

History

Amazon, Headquartered in Seattle, Washington, USA, was founded in 1994 by Jeff Bezos.

Interestingly, Bezos founded the company under the name Cadabra, but launched it as Amazon

in 1995. Amazon places a huge importance on its Brand Name. At the time of its incorporation Jeff

Bezos aimed to make the company the biggest in the world, hence naming it Amazon, after the

biggest river in the world. He also openly claimed that the companys concept was easy to copy, but

so was McDonaldss, even then both McDonalds and Amazon are multi-billion dollar companies,

This is because the importance that a Brand Name carries with it. He also stated that brand names

are more important in the online world that the physical world.

After reading a report about the future of the Internet which projected annual Web commerce

growth at 2,300%, Bezos created a list of 20 products which could be marketed online. He

narrowed the list to what he felt were the five most promising products which included: compact

discs, computer hardware, computer software, videos, and books. Bezos finally decided that his new

business would sell books online, due to the large world-wide demand for literature, the low price

points for books, along with the huge number of titles available in print. Amazon was originally

founded in Bezos' garage in Bellevue, Washington

Amazon's initial business plan was unusual; it did not expect to make a profit for four to five years.

This "slow" growth caused stockholders to complain about the company not reaching profitability

fast enough to justify investing in, or to even survive in the long-term. When the dot-com bubble

burst at the start of the 21st century, destroying many e-companies in the process, Amazon survived,

and grew on past the bubble burst to become a huge player in online sales. It finally turned its first

profit in the fourth quarter of 2001: $5 million (i.e., 1 cent per share), on revenues of more than $1

billion. This profit margin, though extremely modest, proved to skeptics that Bezos' unconventional

business model could succeed. In 1999, Time magazine named Bezos the Person of the Year,

recognising the company's success in popularising online shopping.

Recently, the company became a retailer of digital content (e-books, movies, and apps) and cloud

storage. Since its founding, Amazon has acquired many websites and companies. Today, Amazon,

now a Fortune 500 company, has a range of products and services and is also the world's largest

online retailer.

Vision :

To be earths most customer centric company; to build a place where people can come to

find and discover anything they might want to buy online.

Mission:

To leverage technology and the expertise of invaluable employees and to provide customer

with the best shopping experience on the internet.

Amazon entered India with an idea of grabbing a share in the growing ecommerce market in the

country. It plans to use its same slow growth policy to extract huge profits after a few years while

increasing its market share and consumer base in its first few years and the company has been

extremely successful in doing that in the past 2 years. Its traffic has surpassed 15.3 million visits a

day, a tad bit higher than even Flipkart.

Ethical Issues of Amazon Entering India

Stakeholders: Justified returns to them has to be ensured

Suppliers: Suppliers forms an integral part for any business operations. Amazon being an online

retail chain has to have good relationship with its partners.

Customers: These are the most important category for any organisation. Amazon has to make sure

that it provides genuine products to its customers. Since they could not have touch feel or test

facility in their type of business

Employees: Employees should not exploited. They should be trained properly. Moreover since

they are expanding in India, they should focus on giving Indians more employment. As we have

seen the recent issue of Infosys in U.S.A. where allegations over racial discrimination has been

raised against the company.

Competitors: They should start a healthy competition with their competitors. Price wars will be

there but they have to focus more on customer satisfaction. An environment should be created

where there is a win-win situation for all.

Society: They should not involve in any unfair means which harms the society or the legal

structure.

[As in the case of Bharti Walmart where the CFO Pankaj Madan and his entire legal team has

been suspended on account of alleged bribery to the government officials for getting various

licenses and permissions. (Economic Times, 2013)]

Amazon Entered the Indian Market After Understanding the Following Circumstances:

Middle class in India is booming

India is the third largest publisher of English language books in the world

E-commerce has a huge potential in India, a country of more than 1.2 billion people

52 million active Internet users, of which 40 percent have shopped online

Indian online market is expected to grow 55% to 100 billion rupees by 2019.

ORGANISATION STRUCTURE

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.

Amazon India has been aggressively hiring for the last few months. Currently, Amazon

India has 6000 employees in their logistics and delivery department, which is all set to

expand to 14,000 in the next 7 months. By end of March, they will have 9000+

headcount.

[Amazon's India Bet - Hiring 8000 More, Prime Coming Soon. (n.d.). Retrieved from http://trak.in/tags/business/2015/01/09/amazon-hiring-8000-amazon-prime]

Amazon offers Easy Ship facility using which sellers on their platform can easily ship

goods to the buyers without any hassles. Easy Ship also supports CoD mode of

delivery, which has made it quite popular among the Indian seller base. As of now,

7300 out of 16,000 registered sellers from 284 cities use Easy Ship. Amazon India is

looking to make this facility even more robust and better in the coming days.

Amazon has been using its BOLD Program in hiring employees from Colleges and top

tier MBA institutes, giving them highly knowledgeable staff at lower salaries and

helping the employees evolve with the company.

Through BOLD, Pathways, as well as direct recruiting of experienced students, Amazon has emerged as one of the most prominent recruiters across campuses. Earlier this year, it made a debut into ET's top recruiters at B-schools list with around 50 hires across top management institutes including IIMs Ahmedabad, Bangalore and Calcutta and SP Jain Institute of Management and Research. It is believed to have hired around 45 students from the executive programme at ISB as well, says a source.

[Amazons made-for-India hiring strategy may soon go global - Economic Times. (n.d.). Retrieved f rom http://articles.economictimes.indiatimes.com/2014-09-23/news/54239170_1_amazon-india-pathways-programme]

ACQUISITIONS

Amazon is a multi-national Fortune 500 Company and has a lot of acquisitions in expanding its

business. A few prominent ones are as follows:

FINANCE

India has surpassed the highest expectations for Amazon, the company's founder and CEO Jeff

Bezos said, promising to keep the money tap open for a business that he announced has sold goods

worth more than $1 billion (Rs 6,000 crore) in just over a year of operations.

"We had very high expectations and this team has blown past our highest expectations... It's going

extraordinarily well," said Bezos, 50, while making his second visit to India and his first after

Amazon launched its India retail business in June 2013. "The results are very good. Now that's why

we are doubling down our investments... If there is an opportunity to invest more, we will. We are

not capital-constrained, we are ideas-constrained," he told ET in an interview.

[With $1 billion in a year, team India is just fabulous: Amazon CEO Jeff Bezos - Economic Times. (n.d.). Retrieved from http://articles.economictimes.indiatimes.com/2014-09-29/news/54437474_1_binny-bansal-biggest-online-retailer-flipkart-team-india]

"With this additional investment of $2 billion, our team can continue to think big, innovate, and

raise the bar for customers in India," Chief Executive Jeff Bezos said in a statement. "At current

scale and growth rates, India is on track to be our fastest country ever to a billion dollars in gross

sales."

Amazon had not previously disclosed Indian investment plans. But on Monday, the U.S. company

said it will raise its presence in the country by opening five more warehouses, almost doubling

storage capacity to half a million square feet.

"It's all about who builds up scale faster and remains relevant for the next few decades," said

Harminder Sahani, managing director of retail consultancy Wazir Advisors.

Amazon makes its money in India by charging third-party suppliers to use its website to sell 17

million different products including books, electronics and clothing.

SWOT ANALYSIS

Strengths

Global Brand:

Amazon is one of the worlds most popular brands and is also one of the Fortune 500 Companies.

Its business and its brand name carry a lot of value and trust through the world and this attracts

customers to the brand. Having a huge consumer base and experience in the industry, they are

regarded as world leaders of the Ecommerce Industry and have already deeply impacted the

Indian Ecommerce arena by their entry.

Extensive Range of Products and Services

Amazons product range is one of the largest offered by any Ecommerce portal in the world.

Amazon first started selling books, and has since expanded to a wide range of products, as well as

offering a wide range of services. Not only does Amazon offer its own products and services, they

also allow businesses and users to sell their products on its platform. By acting as the middleman,

Amazon benefits from charging businesses a fee and increasing customers preference of the

platform because of their extensive range of products.

Free Home Delivery

Amazon offers free home delivery for almost all its categories for all orders that are Fulfilled by

Amazon. This acts as an incentive to consumers, as they do not wish to increase their overhead

costs for procuring the product.

30 Days Amazon Fulfilled Guarantee

All orders Fulfilled by Amazon carry a 30 Day Guarantee, during which, if the customer is

unsatisfied or finds a defect in the product, will be given a refund for the product at a whole.

Strong Business Relationships with Publishing Houses, Major Electronic Companies etc.

Amazon always aims at a balance between the satisfaction achieved by both, buyers and sellers. It

prides itself in its strong relationship with all of its Major Sellers and uses this strong relationship

to offer greater discounts to its customers.

Experience in Ecommerce Industry

With an experience of over a decade in the Ecommerce industry, Amazon has a well developed

market structure and selling methodology that has been tried and tested, and is being continuously

perfected.

WEAKNESSES

Slim Profit Margins

Although the company has hundreds of millions of customers, Amazon isnt making great profits.

Because of high operation and maintenance costs of its systems, as well as high shipping costs,

Amazons profit margins are incredibly low.

Competitive Markets

Recently Amazon has entered the video streaming and computer tablet industries. These markets

are highly competitive and Amazon is competing with several companies.

Government Policies

Certain Governmental Policies of the Indian Government prohibits FDI in the e-tail market and

hence constraints the growth of Amazon.

Working Conditions

Amazon has been criticised for its working conditions, with less staff being overworked in huge

warehouses.

OPPORTUNITIES

Expanding Market

Amazon is a major player in the Ecommerce Market and can grab a huge market share in the

Industry which is growing at a tremendous rate of 35% to 44% every year and is expected to cross

a valuation of $100 Billion by 2019.

Ecommerce Partnerships

Being a leader in e-commerce, Amazon has collaborated with other companies before to help sell

their products and services. More partnership opportunities, aimed at providing e-commerce and

technology services, will come in the future.

Expansion

Increasing their international presence will further increase their customer base. Amazon already

has a strong international presence, but expanding to more countries would increase its customer

base and growth.

Investments

Jeff Bezos has promised an investment of 2 Billion Dollars in the Indian Ecommerce Industry for

Amazon to expand, and to build more warehouses and also to expand its product range.

New Services

Amazon is planning to launch many services such as Amazon Prime, which offers many services

such as movie and tv show streaming, music, ebooks and others.

B2B Services

Amazon is planning to bring its cloud platform to India for its corporate customers.

THREATS

Competition

Amazon is in very competitive markets; the tablet computer market, e-book/e-commerce market

and the video streaming markets are highly competitive. In the tablet computer market, Apple is

one of Amazons main competitors with similar tablets. In the e-book market, Amazon faces

competition with Flipkart stores that have perks that are unmatchable by the internet platform. In

the e-commerce industry, Snapdeal and Flipkart offer a lot of the same products. In the video

streaming business, Amazon faces competition from leader Netflix and Hulu.

Government Regulations

Government Policies are interfering with Amazons business model and due to high amount of

red-tapism, they are unable to reach their full capacity.

SWOT SUMMARY

Without a doubt, Amazon's Strenghts and Opportunities have helped a become a market leader and

a global brand. These Strenghts and Opportunities have proved successful in the past nearly 3 years.

Although that's a remarkable streak, more weaknesses and threats have become apparent. Based on

the SWOT analysis, I don't believe that Amazon can continue successfully at this pace. These

weaknesses can easily be turned into strengths, and these threats into opportunities. Amazon's

current strengths' and new strategies will definitely facilitate this change.