19. Amazon.com, Inc. (AMZN) (Group 5)
Headquartered in Seattle, Washington, the year 2017 was phenomenal for Amazon that has grown from being an online bookstore to becoming a worldwide powerhouse selling virtually all products used by consumers. Amazon is the largest online retailer in the world as measured by both revenue and market capitalization. The second largest online retailer is Alibaba Group located in China. Led by their CEO Jeff Bezos, Amazon has expanded heavily into smart homes and through its Alexa platform and even into machine learning. In 2017, the firm shipped over 5 billion items with Prime worldwide with more paid members joining Prime in 2017 than any previous year both in North America and worldwide.
Amazon reported record revenues in 2017 up 31 percent, helped in part by Fire TV Stick and Echo Dot that were the bestselling products across all of Amazon’s products sold. Tens of millions of Echo devices alone were purchased, but a portion of the revenue increase can be explained through the acquisition of Whole Foods. Amazon hired 130,000 new employees in 2017 globally and employs over 17,500 veterans and their spouses in the U.S. In 2017, Amazon Prime Video reported over 18 million views from customers in 11 NFL games across over 200 countries on their smart TVs and other devices. Amazon also now holds the global TV rights to The Lord of The Rings. The company even launched two furniture brands in 2017.
Amazon reports in three segments: North America, International, and Amazon Web Services (AWS). Amazon in early 2018 launched a new service called “Shipping with Amazon” aimed at competing with FedEx Corporation and United Parcel Services (UPS). But the Amazon’s 40 planes and 300 warehouses pale in comparison, for example, to FedEx’s 650 planes, 150,000 trucks, 400,000 employees, and 4,800 operating facilities globally to handle about 12 million shipments a day. UPS is even larger than FedEx and handles 20 million packages a day with service to more than 220 countries through a fleet of 500+ planes and 100,000 vehicles. At least for now, neither FedEx nor UPS is concerned that Amazon wants into the shipping business, but that could change.
- What is the primary problem in the case? Secondary problems? What are the ramifications of these problems in the long run? Short run? Include quantitative and qualitative analysis in your response.
- Based on the problem identified, develop a 5-year strategic plan for the company. This plan should include:
1. Clear vision, mission statement and core values
2. SMART objectives to solve the problem
3. Corresponding strategies for the objectives identified
4. Implementation plan
Key Performance Indicators to monitor progress