AMAZON.

COM
Financial Statement Analysis of Amazon.com
submitted in partial fulfilment of the requirements for the degree of
BACHELOR OF COMMERCE

Submitted by
ASHUTOSH GUPTA
GF/2020/2578

FACULTY OF MANAGEMENT SCIENCES & LIBERAL ARTS

SHOOLINI UNIVERSITY OF BIOTECHNOLOGY AND

MANAGEMENT SCIENCES

SOLAN, Himachal Pradesh, INDIA

NOVEMBER 2022
 CERTIFICATE

This is to certify that the Project work entitled “Financial Statement Analysis of Amazon.”
submitted in partial fulfilment of the requirement for the award of degree of Bachelor of
Commerce to Shoolini University of Biotechnology and Management Sciences, Bajhol, Solan
(H.P.) is a bonafide Project work carried out by Ashutosh Gupta (GF/2020/2578) No part of
this work has been submitted for any other degree or diploma.

Name of Student: Ashutosh Gupta Name of the Guide: Prof. Chander Mohan

Signature: Signature:

Place: Solan

Date:25/11/2022
 ACKNOWLEDGEMENT

I would like to express my special thanks of gratitude to my teacher Prof. Chander Mohan
Gupta, who gave me the golden opportunity to do this wonderful project of
AMAZON.COM.

Who also helped me in completing my project, I came to know about so many new things,
I’m thankful to them also. Secondly, I also would like to thank my friends who helped me in
Finalizing the project within the limited time frame.

Name of Student : Ashutosh Gupta

Signature :
 Research Methodology
Research is the application of human intelligence in systematic manner to a problem. It may
minimize the total uncertainty by intelligence use of the most reliable data available in the
organization.
Data collection

• Primary data:
The methodology of this study has been adopted on the following basis:
Study of various journals, notes, and books.
Study through website.
Collection of primary and secondary data records of the organisation.
Analysis of the collected data for its application.
The data collected for the project was in the form of written as well as verbal information
regarding ratio analysis of the organisation.

• Secondary data:
The secondary data collected-
The Profit & Loss Account, Balance sheets as of the year 2019-2021
CASE STUDY

25/11/2022
 PROJECT:
AMAZON.COM

Submitted by:
ASHUTOSH GUPTA
SHOOLINI UNIVERSITY (SOLAN)

1.
 Company Background
When Amazon was founded in 1994 by creator Jeff Bezos. It was mostly an
online bookstore. Initially Amazon’s growth was terribly slow, not turning a
profit until over 7 years after its founding. This was thanks to the great momentum
provided by the dot-com bubble. As time went on, Amazon became widely
known as the place to shop for books and the self-proclaimed: “world’s largest
bookstore. Bezos’s Amazon went online in 1995, the company Marches to focus
on the online market turned out to be a tremendous success. A consistent incline
in revenue, going to 3.1 billion dollars in 2001. The high percentage of revenue
and growth in due to the company innovation with their services. As time
progressed, so did Amazon’s business strategy, Amazon transformed their
corporate-level-strategy into a mergers and acquisition approach and did this with
enormous success. Following an Amazon-to-buyer sales approach, the company
offer a monumental product range and inventory, enabling consumers to buy
about anything including clothing, beauty supplies, gourmet food, jewellery,
books, movies, electronics, pet supplies, furniture, toy, garden supplies and
household goods. In the present day, Amazon sells product in over forty
categories. Today Amazon is a logistics platform, a search engine, an internet
advertising platform, as well as fulfilling roles as an ecommerce and IT platform.
Amazon’s goal today is to be a place a customer can go to purchase anything
online. Amazon has transformed from a garage-based bookstore into sixty-six
billion dollars retail machine. They have been able to do this thanks to the power
of technological progress. Computational power, bandwidth and data storage
technologies all have improved and have become relatively cheaper over time.
The key areas of focus for amazon are low prices, convenience, selection, and
availability. And their ever-wide expansion of subsidiaries platform, amazon
continues to adapt and evolve till this day. Amazon has come a long way since it
was founded by Jeff Bezos in his garage to 2.5 billion dollars headquarter in
Seattle, Washington, United States.

2.
Timeline of Amazon
The 1990s
Amazon officially opened for business as an online bookseller on July 16, 1995.
Originally, Bezos had incorporated the company as Cadabra Inc. but later changed the
name to “Amazon”. Bezos is said to have browsed a dictionary for a word beginning
with A for the value of alphabetic placement. He selected the name Amazon because it
was exotic and different and as a reference to his plan for the company’s size to reflect
that of the Amazon River, one of the largest rivers in the world. Since its inception, the
company’s motto has always been “get big fast”.
The 2000s
In 2005s, Amazon Prime This membership-based service for Amazon customers offers free
two-day shipping within the contiguous U.S., as well as streaming, shopping, and reading
benefits. According to Amazon’s website, current Amazon Prime membership rates are $14.99
a month or $ 139 per year.
Amazon Web Services
This comprehensive and evolving cloud computing platform was born in the 2000s. The first
Amazon Web Services (AWS) offering were launched in 2006 to provide online services for
websites and client-side applications. Amazon Elastic Compute Cloud (EC2) and Simple
Storage Services (S3) are the backbones of the company’s growing collection of web services.
The same year, Amazon also launched a cloud computing and video-on-demand service known
at the time as Unbox.
From the 2010s to present
Amazon debuted its first tablet computer, the Kindle Fire, in 2011 and the Amazon Fire TV
Stick, which is part of Amazon’s extensive line of streaming media devices, in 2014.
Amazon also started an online Amazon Art marketplace for fine arts in 2013, which has
featured original works by famous artists such as Claude Monet and Norman Rockwell.
The popular in-home virtual assistant Amazon Alexa was rolled out to consumer in 2015 and
was followed by the Alexa-equipped Echo Dot in 2016.
Amazon acquired the organic grocery store Whole Food in 2017 and launched Amazon go, a
chain of cashier less grocery stores in 2018.
The rise of in-home shopping during the COVID-19 pandemic made consumer rely on Amazon
even more, and the trend is likely to keep growing.

3.
Notable Amazon Products and Services
Amazon offers an ever-expanding portfolio of services and products. Following is a list of its
noteworthy offerings.
Retail
• Amazon Marketplace. Amazon’s e-commerce platform enables third-party retailers
to showcase and sell their products alongside Amazon items.
• Amazon Fresh. Amazon’s grocery pickup and delivery service is currently available
in two dozen U.S cities and a few international locations. A grocery order can be placed
through the Amazon Fresh website, or the Amazon mobile app. Customers can either
gat their groceries delivered or visit the store for pickup.
• Amazon vine. Launched in 2007, Amazon Vine helps manufacturers and publishers
get reviews for their products to help shoppers make informed purchases.
• Woot. Acquired by Amazon in 2010, Woot offers limited time offers and exclusive
deals that rotate daily. This shop features refurbished items, as well as latest items that
are low in stock. Prime members get free shipping.
4.
 • Zappos. Amazon bought Zappos in 2009. This online retailer of shoes and clothing
carries a wide range of brands, including Nike, Sperry, Adidas and Uggs.
• Merch by Amazon. This on-demand T-shirt printing services enables sellers to create
and upload their T-shirt designs for free and earn royalties on each sale. Amazon does
the rest from printing the T-shirts to delivering them to customers.
• Amazon Handmade. This platform enables artisans to sell handcrafted products to
customers around the world.
Consumer Technology
• Amazon Kindle. Amazon’s first e-reader, Kindle, enables users to browse, buy and
read e-books, magazines, and newspapers from the Kindle Store.
• Amazon Fire tablet. Previously known as Kindle Fire, Amazon’s popular and high-
profile Fire tablet competes with Apple’s iPad.
• Amazon Fire TV. This line of Amazon’s streaming media players and digital devices
delivers streamed video content over the internet to a paired high-definition television
• Amazon Echo. This is one of Amazon’s smart home devices that comes equipped with
a speaker and connects to Alexa. Amazon Echo can perform several functions,
including talking about the weather, creating shopping lists and controlling other smart
products, such as light, switches and television.
• Amazon Echo Dot. A smaller, puck-shaped version of the original Amazon Echo, an
Echo Dot can be placed in any room and can answer questions, play music, and read
news and other stories.
• Amazon Echo Show. As part of the Amazon Echo line of speakers, the Amazon Echo
Show works similarly through Alexa but also offers a 7-inch touchscreen display to
play videos and music and conduct video calls with other Echo users.
• Amazon Astro. This is Amazon’s first home monitoring robot that works with Alexa.
It is designed to help with various household tasks, such as home monitoring, caring
for the elderly through notifications and alerts, and following owners from room to play
TV shows, music, or podcasts.
Subscription Services
• Amazon Prime. This subscription service provides members access to exclusive
shopping and entertainment services, discounts and more. As an example, all Amazon
Prime members enjoy free one-day or two-day shipping on qualifying orders.
• Amazon Prime Video. This is Amazon’s on-demand video streaming service that
offers a selection of about 24,000 movies and over 2,100 TV shows. This service is
included with Amazon Prime membership.
• Amazon Drive. Previously known as Amazon Cloud Drive, Amazon Drive is a cloud
storage app that offers five gigabytes (GB) of free and secure online storage for photos,
videos, and files For Amazon customers. Amazon Prime members get free, unlimited,
full resolution photo storage, along with 5 GB of video storage.
5.
 • Twitch prime. A monthly subscription service, Twitch prime is a subsidiary of
Amazon Prime. It gives members premium access to Twitch – a video streaming
platform that offers a fun and social way to watch people play games.
• Amazon Music Prime. This is Amazon’s music streaming service that is free for Prime
members.
Digital Content
• Amazon Pay. An online transaction processing platform, Amazon Pay enables
Amazon account holders to use their Amazon accounts to pay external online
merchants.
• Amazon Music Unlimited. Amazon’s premium music service costs $8.99 a month for
Prime members and $9.99 for non-Prime members.
• Kindle Store. Part of Amazon’s retail website, the Kindle Store can be accessed from
any Kindle device to purchase e-books.
• Amazon Appstore for Android. Amazon’s app store for the Android operating system
enables users to download games and mobile apps to supports devices
AWS

• S3. This is Amazon’s scalable, cloud- based object storage. Files are referred to as
objects in S3 and are stored in containers called buckets.
• Amazon Simple Queue Service (SQS). SQS is a pay-per-use web service that is
designed to provide access to a waiting message queue where messages can reside until
a computer processes them.
• Amazon S3 Glacier. Amazon S3 Glacier is a low-cost cloud storage service for data
that might be associated with longer retrieval times. It also offers data archiving and
backup of cold data.
• Amazon EC2. This web service interface provide scalability with resizable compute
capacity in the AWS cloud. Users can run virtual servers or instances, commonly
known EC2 instances, which can be scaled up or down, depending on the network
requirements.
• AWS Identity and Access Management (IAM). IAM provides secure and controlled
access to resources.
• Amazon Redshift. This data warehouse in the cloud enables users to query petabytes
of both structured and semi structured data using standard Structured Query Language
queries. For example, to address the expanding volume of transaction, Nasdaq moved
from a legacy on- premises data centre to the AWS cloud, which is powered through
the Amazon Redshift cluster.

6.
Amazon AI Services

• Amazon Sage-Maker. A fully managed cloud machine learning platform, Amazon

Sage-Maker enables developers and data scientists to build, train and deploy machine
learning models for predictive analytics applications.
• Amazon Lex. This service for building conversational interfaces into any application
using voice and text is powered by the same technology as Alexa.
• Amazon Polly. A text-to-speech service, Amazon Polly uses deep learning technology
to convert text into spoken audio. It includes 60 voices across 29 languages.
• Amazon Recognition. This software-as-a-service facial recognition and analysis
platform uses a deep learning algorithm to process images and extract information from
them.
• AWS Deep Lens. This programmable video camera enables developers to easily
experiment with machine learning, AI, and the internet of things.
• Alexa Voice Service. This programming interface provides developers with a set of
C++ libraries to add Amazon Alexa’s speech and other capabilities into their
applications and devices.
• Amazon Transcribe. This service converts speech to text quickly and accurately by
using a deep learning process called automatic speech recognition.
• Amazon Translate. Amazon Translate is a cloud service that can convert
large amounts of text written in one language to another language.
• Amazon Skill Kit. This software development kit enables developers to build skills or
conversational applications on Amazon Alexa.
Amazon Privately Owned Brands
• Amazon Basics. This is Amazon’s privately labelled, low-budget brand that mainly
sells kitchen, tech and household products.
• Amazon Elements. This private label of Amazon sells baby wipes, new-born through
size 6 diapers, baby food, diaper pail refills and baby laundry detergent.
• Presto!. This brand started as a laundry detergent in 2016 but has added household
paper towels and toilets papers to its product line.
• Amazon Essentials. A Prime-exclusive program, this clothing line offers basic wear
for men, women, babies and kids, with additional options for family, big and tall, and
athletic activity.
• Happy Belly. This private label of Amazon was introduced in 2016 and sells snack
food items. In February 2019, the brand also began offering milk delivery services.
• Goodthreads. This menswear apparel line is available exclusively to Amazon Prime
members. The label offers both casual and professional pieces and deemed a bit higher
quality and more stylish than the Amazon Essentials brand.

7.
Notable Amazon subsidiaries and acquisitions
From healthcare to entertainment, Amazon has acquired multiple companies by tapping into a
variety of sectors over time.
Following is a list of Amazon’s notable acquisitions and subsidiary companies:
• IMDB. The world’s most popular database for movies, TV, celebrity, video games and
streaming online content was acquired by Amazon in 1998.
• Audible. Audible, a book and spoken audio content provider, was acquired by Amazon
in 2008 for $300 million.
• Zappos. Amazon acquired this online shoe and clothing retailer in an all-stock deal
worth $1.2 billion in 2009.
8.
 • Twitch. A social media and video game streaming platform, Twitch was purchased by
Amazon for $970 million in 2014.
• Whole foods. Foods, beverage, and organic grocery store chain Whole Foods was
acquired by Amazon for $13.7 billion in 2017.
• Ring. Amazon took ownership of this home security and smart home company in 2018
for $1 billion.
• Zoox. An autonomous vehicles, robotics and transportation company was acquired as
a wholly owned subsidiary by Amazon for $1.2 billion in 2020.
• Metro-Goldwyn-Mayer. Amazon acquired this film and TV studio for $8.5 billion in
March 2020.

The 5 Main Objective of Business of Amazon.com

Economic Objectives of Business
One of the primary objectives of the business is making a profit. Economic objectives are
achieved to earn more profit and expand the range and scale of business. However, to fulfil
these objectives, there are essential steps to be taken, such as creating more customers and
innovative ideas, accumulating financial stability, and realizing the right
opportunities. Launching new products or services could widen the economic well-being of
your business

Social Objectives of Business

Social objectives are those primary objectives of business aimed at societal well-being.
Businesses utilize multiple resources. In return, it's their duty to give back to society. A
business needs to make sure that it leaves a positive impact and adds value to the social
structure. CSR is one of the policies introduced by the government in this light.

Human or Individual Objectives of Business

Human objectives are one of the most crucial primary objectives of business, targeting the well-
being of the employees or workers. Human objectives include the economic, social, and
psychological factors of employees. The people within the business are critical assets. Be it
planning, strategies, or execution; the people are involved in every aspect of the business.
Therefore, an employee's overall well-being and development should be emphasized in any
business.

National Objectives of Business

The national objectives of business expect business owners to give equal treatment to all
employees, comply with government rules/ policies, and generate employment across society,
including the weaker sections. Businesses should also focus on earning revenue for their
government, becoming self-sufficient in producing goods and services, paying taxes in time,
and conducting business without harming the environment.

9.
Global Objectives of Business
The global economy has changed enormously over the past few decades. It has presented
businesses all around the world with an opportunity to expand business on a global scale.
Global objectives of business are aimed at reducing national disparities, promoting fair trade
practices on a global scale, and sustaining the resources used to make the world a better place
to live in.

Review of Literature
(Angehrn, 1997); Internet as a medium does not only provide information but can also be used
to communicate and purchase products. The internet is an environment for conducting a
transaction and a channel to deliver the products or service to the buyer.
(Lohse, Bellman, & Johnson, 2000); The growing e-commerce and internet as information-
channel makes it necessary for companies to know the behaviour of their customers on the
internet. Marketers could perform better if they understand and know their customers well. It
is necessary for marketers to understand the decisions consumers make and how online
consumers go through their decision process.
(Benedict et al, 2001); In his study on perception towards online shopping reveals that
perceptions toward online shopping and intention to shop online are not only affected by ease
of use, usefulness, and enjoyment, but also by exogenous factors like consumer traits,
situational factors, product characteristics, previous online shopping experience, and trust in
online shopping.
(Reibstein, 2002; Heijden van der, Verhaegen, & Creemers, 2003); It is examined only the
‘purchase’ stage of consumers during their entire buying decision process (BDP). There is
however no research done about the channels consumers use during a stage of their BDP.
(Menon and Kahn, 2002; Childers et al., 2001; Mathwick et al., 2001); Concluded that
online shopping features can be either consumer’s perceptions of functional and utilitarian
dimensions, like “ease to use” and “usefulness”, or their perception of hedonic dimensions and
emotions like “enjoyment by including both hedonic dimensions and utilitarian, aspects from
the consumer behaviour literature”
(Dabholkar and Bagozzi et al, 2002; O’Cass and Fenech, 2002; Childers et al., 2001;
Davis, 1993); Their study reveals that if more attractive online stores were developed. This
elevates the issue of examining what factors affect consumers to shop online. Therefore, a
structure is needed to structure the complex system of effects of these different factors and
develop and through understanding of consumers’ perceptions towards internet shopping and
their intentions to shop online.
(Dellarocas, 2003); With online shopping consumers can buy products without an
intermediary service. The changing role of the internet and the corresponding websites has a
significant impact on companies. Consumers can make their opinions and experiences about
products available on the internet.
(Rick L. Andrews, Imran S. Currim, 2004); This study uses information from both
traditional supermarket scanners and an online supermarket to test expected differences in
choice behaviours of such consumers.

10.
(Thompson S.H. Teo, Pien Wang, Chang Hong Leong, 2004); Building upon Transaction
Cost Economics (TCE) theory, this paper hypothesises that consumers’ transaction cost of
online shopping is affected by six antecedents: products uncertainty, behavioural uncertainty,
convenience, economic utility, dependability, and asset specificity.
(D. Veena Parboteeah and Joseph S. Valacich, John D. Wells, 2009); This paper reports on
two studies that examine how variations in a website influence online impulse buying. The
results reveal some relevant insights about this phenomenon. Specifically, although many
participants had the urge to buy impulsively, regardless of website quality, this behaviour’s
likelihood and magnitude was directly influenced by varying the quality of task relevant and
mood-relevant cues. The implications of the results for both future research and the design of
human-computer interfaces are discussed.
(Kinza Yasar, 2021); This study shows that how amazon introduced their Amazon Web
Services and portfolio of services and product like Retail, consumer technology, subscription
services, digital content, AWS, Amazon AI Services, Amazon privately owned brands and
Amazon Subsidiaries and Acquisitions.
(Tristan Landrecht, Jessica Zhang, John Chen, Jin Can Chen, Jae Kim, 2012); There
Studies shows External Analysis, Industry Analysis, Competitor Analysis.
(Md. Shafayat Hossen, Abrarul Amin Avin, Mohammed Kashem, Shakir Mahmud
Shourav, Md. Sazzadur Rahman, 2018); In their studies they talked about Vision and
Mission of Amazon, Objectives of company, Institutional & Individual Ownership and Major
Shareholders of the Company.
(Dave Chaffey, 2022); In this research paper he Summarize Amazon’s growth and business
evolution, Amazon business and revenue model, Amazon marketing strategy.

11
External Analysis
General Environment
Economic
Since the start of 2008, the global economy has been in a recession. The World Bank reduced
each country’s expected GDP growth for the year of 2013. The low GDP growth and high
unemployment rate have reduced people’s wealth and purchasing power of goods. When the
market tanked, many people chose to migrate their shopping onto an online platform. In 2011,
online sales increased by 11 percent despite what people imagined. The reason this has 2 been
occurring is that many consumers are changing their spending habits toward finding “bargain
goods”. Amazon has been able to benefit from this greatly thanks to their ability to offer
affordable goods quickly and easily to the public

Sociocultural
Online shopping has grown dramatically in popularity over recent years. E-commerce is
convenient since there are no geographic restrictions and consumers can have access to a
selection of goods wherever and whenever they want. Moreover, there is an unlimited selection
of merchandise for customers to review and compare. These advantages shift customers’
shopping behaviour from retail stores to online shopping. According to a survey of online
shoppers: 48 percent of respondents shopped online in the past 12 months, 66 percent preferred
web retailers, and 73 percent completed nearly half of their shopping online. The increasing
popularity of online shopping is providing a foundation for Amazon to exploit their core
competencies.
Global
With the advances in modern tech support and web security, people are getting more and more
willing to make purchases online. As the economies of emerging markets are rising
dramatically, people in those countries with increasing purchasing power are spending more
on online shopping. Services such as Amazon can exploit this opportunity by offering
consumers goods which are not readily available in local markets. While firms expand
internationally, it is critical to consider of the differences in consumer preferences.
Technological
As technology has been rapidly advancing, businesses have been influenced by technological
innovations. For example, 3 online payment methods such as online banking and PayPal create
more convenience in purchase transactions, which in turn enhances customers’ online shopping
experience.

12.
Political/Legal
In the modern-day environment, firms must be cautious when they deal with international
policies on online distribution. In the U.S., electronic commerce firms are regulated by the
Federal Trade Commission, which regulates online advertising and the security of consumers’
personal information. On the other hand, International Consumer Protection and Enforcement
Network (ICPEN) finds ways to tackle consumer problems involving cross-border transactions
in both goods and services. This helps to ensure participants equally benefit and reach mutual
understanding. Online retailers such as Amazon should be careful to disclose online sales taxes
while advertising products to other countries via online shopping platforms because different
sales taxes can cause confusion to customers.
Demographic
As the world’s population is aging rapidly, baby boomers are moving towards retirement so
that they will have weaker purchasing power. Thus, generation X and Y have become
companies’ target markets for product selling. These generations are technologically adept and
tend to engage more in online purchasing. Based on a survey, 62 percent of Generation Y liked
to purchase things online, as compared to 32 percent of those aged older than 50. Organizations
4 should also exploit opportunities from emerging countries, such as China and India, which
have large populations and growing disposable income. Based on a global survey of online
shoppers, people in China engaged in online shopping 8.4 times more than those in any other
markets monthly. Thanks to the network of distribution services and the power of E-
Commerce, Amazon can utilize its core competencies in order to capture the global market

13.
Industry Analysis
Threat of New Entrants
The threat of new entrants is low. It is easy for companies to start-up in this industry due to the
relatively low capital investment costs. However, to achieve the position in the industry that
Amazon holds it would require huge investment in infrastructure and inventory. It is also hard
for new entrants to gain customer loyalty since the existing major competitors, such as
Amazon, have established a loyal customer base.
Bargaining Power of Suppliers
Suppliers have little bargaining power due to the substantial number of suppliers available and
the vast expanse of the online global distribution network. Many suppliers rely on key online
retailers such as Amazon to engage in bulk purchasing. Thus, online retailers can easily switch
to another supplier for lower price and better quality. Bargaining power of suppliers to Amazon
is particularly low since suppliers do not require payment until 35 days after the confirmation
of sales.
Bargaining Power of Buyers
The bargaining power of buyers is high. Customers have the options to choose among
numerous online stores for the lowest price products and services due to the completely
available 5 information online. The fact that Amazon is able to reduce their overhead costs by
not having retail locations allows them to achieve these low prices, enabling them to compete
in the industry.
Threat of Substitute Product
The threat of substitutes for Amazon is high. The only unique characteristic Amazon has is the
patented technology (such as 1-Click Ordering), which differentiates them from other possible
substitutes. However, there are many alternatives providing the same products and services,
which could reduce Amazon’s competitive advantage. Therefore, Amazon does not have
absolute competitive advantage on their product offerings, but they have the advantage when
it comes to the quality of customer service and convenience provided.
Rivalry Among Competing Firms
Rivalry among competing firms is high. There are a vast number of search engines on the
Internet which are able to influence customers decisions when searching for the best online
retailer. There is also an increasing number of dot-com retailers due to the relatively low start-
up costs of the business.

14.
Competitor Analysis
As the fastest-growing, multinational e-commerce retailer in America, Amazon has an
international presence over various categories and faces an intense competition. Based on the
similarity in the breadth of products, geographic market coverage, and scope of business, three
major competitors are identified: eBay, Barnes and Noble, and Wal-Mart. Wal-Mart, as the
world’s largest retail chain, utilizes a cost leadership strategy with low-cost management in
value chain to market its products at the lowest price through both ecommerce and physical
stores.
eBay, operating as the biggest online auction house and focusing as a service provider, employs
cost leadership strategy by solely operating e-commerce as an intermediary without holding
any inventories or physical infrastructures. It also applies a differentiation strategy by providing
a variety of products, high-quality service security, and E-commerce services.
Barnes and Noble, America’s largest book retailer operating both online and physical retail
businesses, competes intensively with Amazon for the market share in the book industry. It
pursues an integrated focused cost leadership/differentiation strategy to target price-sensitive
consumers by providing books not readily or commonly available at a less expensive price.
The competitors’ analysis can be summarized as below:
1. Future objectives: Competitors want to compete for a good strategic position and
become the market leader in both e-commerce and physical commerce.
2. Current strategy: Competitors aim to increase profitability, gain market share, and
provide a wide variety of products to compete against Amazon through utilizing
competitive pricing, cost leadership, and differentiation strategies.
3. Assumptions: Competitors believe that the demand for online shopping will continue
to grow as consumers seek for more convenient and efficient ways of shopping.
4. Capabilities: Competitors offer similar products as Amazon either at a lower price or
accompanied with differentiated services. Some of them have an international presence
with stable financial performance, enabling them to form global strategic alliances to
increase their market base of customers.

15.
Amazon’s Mission and Vision
"Our vision is to be Earth's most customer-centric company, where customers can find
and discover anything they might want to buy online, and endeavours to offer its
customers the lowest possible prices."
• For me, it tells you exactly what Amazon wants to create and that they will sell 360
degrees of what people need in life, in private and at work. And it's simple, short, easy
to remember and direct.
"To serve consumers through online and physical stores and focus on selection, price,
and convenience."
• Amazon vision statement is an extension of its mission as "to be Earth's most
customer-centric company, where customers can find and discover anything they might
want to buy online, and endeavours to offer its customers the lowest possible prices."
Amazon's core values
Amazon's core values go hand in hand with their vision and mission statements. Amazon has
plenty of values to support in attaining their objectives. However, in the book “The Everything
Store: Jeff Bezos and the Age of Amazon,” there are six core values outlined:

• Customer Obsession

• Bias for Action

• Ownership

• Frugality

• Innovation, and

• High bar for talent

The 4 P’s of Amazon Marketing strategies

Popularly known as the “Marketing Mix,” Amazon analyses a company or a brand that covers
4P’s.
1.Product. Though Amazon began its e-commerce journey with just books, today, it sells
millions of products – grouped under various categories. The best-selling product
categories include shoes, jewellery, clothing, toys, home & kitchen appliances, electronics,
books, outdoors, sports, car accessories, fine arts, etc. Amazon offers items from independent
businesses and retailers, it also promotes its private label products, more commonly known
as Amazon Basics. As this e-commerce giant continues to expand, more products are appended
to its inventory regularly. So, diversity in products is the key reason why it stays ahead of its
competitors.
16.
2. Price. A company can use various pricing strategies to sell its products. Here are a few to
make a note of:
• Cost-plus pricing
• Value pricing
• Competitor pricing
• Price discrimination
Amazon typically utilizes a competitive pricing strategy where it consistently assesses its
competitors’ price lists, serving as a base for its product pricing. It ensures that its prices are
kept low while giving customers a broad range of selections.
Besides this, Amazon also uses other pricing strategies like:
• Psychological pricing
• Promotional pricing
Due to the nature of its business, Amazon can easily bring changes to the products in a single
day. This happens to be its biggest strength, making it highly difficult for others to keep up
with Amazon.
3. Place. In recent years, Amazon has expanded its online retail business in different parts of
the world. This presence has made it convenient for customers across the globe to have access
to millions of products.
Even shipments from the farthest locations reach you in a minimum time with Amazon Global.
Its fulfilment centres and fast delivery time are yet other great reasons for its success.

4.Promotion. Promotion is all about communication and Amazon understands this.

It communicates with potential buyers and customers through ads with the help of various
tools.
For example, it executes regular ad campaigns on websites, newspapers, television, billboards,
and social media. It also promotes via Amazon affiliate websites. Besides these, Amazon
frequently offers discounts and sales promotions, which is a great way of branding.

17.
Types of Amazon Marketing Channels

18.
Institutional & Individual Ownership
Institutional investors hold a majority ownership of AMZN through the 59.19% of the
outstanding shares that they control. This interest is also higher than at almost any other
company in the Internet Retail industry-

Top 3 Individual Insider Shareholders

Jeff Bezos
Amazon's founder and executive chair of Amazon's board, Jeff Bezos, is the company's
biggest shareholder, with 55.5 million shares representing 11.1% of outstanding shares. Bezos
was CEO of Amazon since its founding until July 5, 2021, when he stepped down in favour
of Andrew Jassy. Bezos is currently ranked number 1 on Forbes' list of the world's wealthiest
people. His net worth took a brief hit in 2019 when he finalized his divorce from Mackenzie
Bezos, who helped him start Amazon.

As part of the settlement, Bezos keeps voting control over his entire stake even though his
former wife retains ownership of 25% of those shares.

Andrew Jassy

Amazon's chief executive officer (CEO) Andrew Jassy owns 94,797 shares of the company,
or 0.02% of all outstanding shares. Jassy was previously the CEO of Amazon Web Services,
the world's largest cloud computing services company, before becoming CEO of the entire
company on July 5, 2021. Jassy joined Amazon in 1997. With a team of 57
people, he founded AWS and started selling cloud services in 2006. Prior to joining Amazon,
Jassy founded and managed a marketing consulting company.

19.
Jeffrey Blackburn
Jeffrey Blackburn holds 48,967 shares of Amazon, or 0.01% of outstanding shares.
Blackburn has been Senior Vice President of Business Development for Amazon since 2006.
He previously was Vice President of Operations Integration at Amazon and joined the company
in 1998 after working for several years as an Associate at Morgan Stanley and Deutsche Bank.

Top 3 Institutional Shareholders

According to Whale Wisdom, more than 3,000 13F filers held Amazon stock as of the end of
Q1 2020. About 1,200 of them included Amazon in their top 10 holdings.

Advisor Group Inc.

Advisor Group Inc. is an institutional brokerage company that offers asset management,
investment advisory and other services. It has $296.7 billion in assets under management
(AUM). It has one of the largest networks of independent wealth management firms in the
world. Advisor Group owns 35.4 million shares of Amazon stock, or 7.1% of outstanding
shares, according to its 13F filed for the period ending March 31, 2020.

Vanguard Group Inc.

Vanguard Group Inc. provides hundreds of mutual funds, ETFs, and retirement products. The
company is primarily a mutual fund and ETF management company with about $6.2 trillion
in global assets under management (AUM) as of January 31, 2020.Based on its 13F filed for
the period ending March 31, 2020, Vanguard Group owns 33.0 million shares of Amazon, or
6.6% of all outstanding shares. Vanguard clients can invest in Amazon stock through the
company's Consumer Discretionary ETF (VCR). Amazon is the largest holding and accounts
for 21.3% of the fund's portfolio.

BlackRock Inc.

BlackRock Inc. (BLK), one of the world's biggest asset managers, sells the popular line of
iShares ETF products. The company is primarily a mutual fund and ETF management
company with approximately $6.47 trillion in AUM. This firm holds 27.0 million shares of
Amazon based on its 13F filing for the period ending March 31, 2020. This accounts for 5.4%
of all outstanding Amazon shares. Amazon stock is the largest holding in the iShares U.S.
Consumer Services ETF (IYC), comprising 10.4% of the fund.

20.
 Amazon’s Finances
Amazon is one of the most recognisable brands in the world, responsible for $386 billion
revenue in 2020. It was the fourth tech company to reach a $1 trillion market cap and is quickly
on its way to $2 trillion.
Amazon Prime Video counted more than 175 million unique viewers in 2021, and Amazon
recently acquired MGM Studios for $8.4 billion, adding more exclusive movies to the
platform.
While Amazon still makes most of its revenue from its e-commerce platform, it has seen huge
increases in revenue from AWS and subscriptions in the past year. The coronavirus pandemic
provided Amazon with a boost in sales across the board, which can be seen in the almost
doubling of Amazon’s stock price since March 2020.
Amazon key statistics
• Amazon generated $470 billion revenue in 2021, making it the third largest company
in the world by revenue
• Amazon Web Services was responsible for 13% of that revenue
• Amazon earned $33.3 billion net income in 2021, around half of which came from
AWS
• Over 200 million customers subscribe to Amazon Prime worldwide, with 147 million
in the US alone
• Amazon Prime Video had 175 million users in 2021, while Prime Music reached 68
million in 2021
Following are some notable statistics from the release:
• Net sales increased 7% to $116.4 billion in the first quarter, compared with $108.5
billion in the first quarter of 2021. Excluding the $1.8 billion unfavourable impacts
from year-over-year changes in foreign exchange rates throughout the quarter, net
sales increased 9% compared with the first quarter of 2021.
• Operating income decreased to $3.7 billion in the first quarter, compared with $8.9
billion in the first quarter of 2021.
• Net loss was $3.8 billion in the first quarter compared with net income of $8.1
billion in the first quarter of 2021.
21.
Amazon Revenue
Amazon is the third largest public company by revenue in the world, behind Walmart and
China’s State Grid. It saw a 37.6% increase in revenue in 2020, its largest percentage gain since
2011, partly due to the coronavirus pandemic.

Amazon annual revenue 2017 to 2021 ($bn)

Revenue($bn)
500
450
400
350
300
250
200
150
100
50
0
2017 2018 2019 2020 2021

Revenue($bn)

Amazon revenue breakdown

Amazon breaks out revenue by segment and region. Even though most of the revenue comes
from e-commerce, Amazon is a first-party and third-party reseller, alongside providing
subscription services and owning Whole Foods

Amazon revenue breakdown by segment 2017 to 2021 ($bn)

Year Online Physical Third- Subscription AWS Advertising Others
stores stores party services
retail
2017 108.3 5.8 31.8 9.7 17.4 4.6
2018 122.9 17.2 42.7 14.1 25.6 10.1
2019 141.2 17.1 53.7 19.2 35 14
2020 197.2 16.2 80.4 25.2 45.3 15.5 5.9
2021 222 17 103.3 31.7 62.2 31.1 3.4

22.
Amazon revenue breakdown by region 2016 to 2020($bn)

Amazon Profit
Amazon was considered a low-profit venture for the first decade and a half of its existence,
with CEO Jeff Bezos reinvesting most of Amazon’s profits back into the company. This is no
longer the case, with highly profitable segments like AWS pushing the company’s total profit
above $10 billion in 2018 and $20 billion in 2020.

Amazon annual net income 2017 to 2021 ($bn)

23.
Amazon Advertising Revenue
Amazon has built a rather respectable advertising platform, which it runs on its store. In 2021,
it made more revenue than PayPal or eBay.
Amazon annual advertising revenue 2020 to 2021 ($bn)

Amazon Valuation
Amazon’s valuation has skyrocketed in the past five years, from $172 billion in 2015 to $1.6
trillion in 2022. Amazon was one of the big winners of the coronavirus pandemic, in terms of
stock price, with a 67% increase in valuation from March 2020 to March 2021.
Amazon Annual Valuation 2018to 2022 ($bn)

24.
Amazon Prime subscribers
Amazon Prime has grown in value as Amazon has expanded its store and delivery targets. With
Video, Music, e-books, magazines, cloud storage and other add-ons, Amazon has created a
lock-in effect like Apple’s iOS
Amazon Prime annual subscribers 2017 to 2021 (mm)

Amazon Prime US annual subscribers 2017 to 2021 (mm)

25.
Amazon Prime Video users
Amazon has saw enormous growth in its Prime Video offering over the last three years. It
started investing in original programming in 2015 with Man in the High Castle and acquired
MGM Studios for $8.4 billion to add more exclusive content.
Amazon Prime video users 2019 to 2021 (mm)

Amazon Prime content spend

Amazon spent $13 billion on content for Amazon Prime Video in 2021, a $2 billion increase
on 2020 figures.
Amazon Prime content spend 2017 to 2021 ($bn)

26.
Amazon Prime Music users
Prime Music reached 68 million users in 2021, making it the third most popular music
streaming platform in the West. It does not disclose how many users pay for the service, as
Prime Music is available for free with ads.
Amazon Prime Music annual users 2018 to 2021 (mm)

Amazon Music vs competitors: subscribers

Spotify is the clear leader of the pack when it comes to overall users, although this chart only
covers YouTube Premium users. YouTube has far more total users.
Music streaming platforms subscribers 2016 to 2021 (mm)

27.
 Amazon Quarterly Ratio
Title Company Industry

Valuation Ratios

Net Debt -

Price to Cash Flow 30.93 22.9

Price to Book 6.94 7.67

Price to Tangible Book - 0

Profitability - -

Per Share Data

Book Value/Share - 0

Tangible Book Value/Share - -0.01

Cash/Share - 0

Management Effectiveness - -

Growth

EPS(MRQ) vs Qtr. 1 Yr. Ago -9.53% -55.68

Sales (MRQ) vs Qtr. 1 Yr. Ago 14.7% 15.29

Financial Strength

Quick Ratio 0.62 0.87

Current Ratio 0.94 1.25

LT Debt to Equity - 1.43

Total Debt to Equity 119.53% 101.26

28.
 STATEMENTS OF CASH FLOWS
(In millions)
Year Ended December 31,
2019 2020 2021
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, BEGINNING OF PERIOD $ 32,173 $ 36,410 $ 42,377
OPERATING ACTIVITIES:
Net income 11,588 21,331 33,364
Adjustments to reconcile net income to net cash from operating activities:
Depreciation and amortization of property and equipment and capitalized content costs, operating lease assets,
and other 21,789 25,251 34,296

Stock-based compensation 6,864 9,208 12,757

Other operating expense (income), net 164 (71) 137
Other expense (income), net (249) (2,582) (14,306)
Deferred income taxes 796 (554) (310)
Changes in operating assets and liabilities:
Inventories (3,278) (2,849) (9,487)
Accounts receivable, net and other (7,681) (8,169) (18,163)
Accounts payable 8,193 17,480 3,602
Accrued expenses and other (1,383) 5,754 2,123
Unearned revenue 1,711 1,265 2,314
Net cash provided by (used in) operating activities 38,514 66,064 46,327
INVESTING ACTIVITIES:
Purchases of property and equipment (16,861) (40,140) (61,053)
Proceeds from property and equipment sales and incentives 4,172 5,096 5,657
Acquisitions, net of cash acquired, and other (2,461) (2,325) (1,985)
Sales and maturities of marketable securities 22,681 50,237 59,384
Purchases of marketable securities (31,812) (72,479) (60,157)
Net cash provided by (used in) investing activities (24,281) (59,611) (58,154)
FINANCING ACTIVITIES:
Proceeds from short-term debt, and other 1,402 6,796 7,956
Repayments of short-term debt, and other (1,518) (6,177) (7,753)
Proceeds from long-term debt 871 10,525 19,003
Repayments of long-term debt (1,166) (1,553) (1,590)
Principal repayments of finance leases (9,628) (10,642) (11,163)
Principal repayments of financing obligations (27) (53) (162)
Net cash provided by (used in) financing activities (10,066) (1,104) 6,291
Foreign currency effect on cash, cash equivalents, and restricted cash 70 618 (364)
Net increase (decrease) in cash, cash equivalents, and restricted cash 4,237 5,967 (5,900)
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, END OF PERIOD $ 36,410 $ 42,377 $ 36,477

29.
 STATEMENTS OF OPERATIONS
(In millions, except per share data)
Year Ended December 31,
2019 2020 2021
Net product sales $ 160,408 $ 215,915 $ 241,787
Net service sales 120,114 170,149 228,035
Total net sales 280,522 386,064 469,822
Operating expenses:
Cost of sales 165,536 233,307 272,344
Fulfillment 40,232 58,517 75,111
Technology and content 35,931 42,740 56,052
Marketing 18,878 22,008 32,551
General and administrative 5,203 6,668 8,823
Other operating expense (income), net 201 (75) 62
Total operating expenses 265,981 363,165 444,943
Operating income 14,541 22,899 24,879
Interest income 832 555 448
Interest expense (1,600) (1,647) (1,809)
Other income (expense), net 203 2,371 14,633
Total non-operating income (expense) (565) 1,279 13,272
Income before income taxes 13,976 24,178 38,151
Provision for income taxes (2,374) (2,863) (4,791)
Equity-method investment activity, net of tax (14) 16 4
Net income $ 11,588 $ 21,331 $ 33,364
Basic earnings per share $ 23.46 $ 42.64 $ 65.96
Diluted earnings per share $ 23.01 $ 41.83 $ 64.81
Weighted-average shares used in computation of earnings per share:
Basic 494 500 506
Diluted 504 510 515

30.
 BALANCE SHEETS

(In millions, expect per share data)

December 31,

2020 2021
Current assets:
Cash and cash equivalents $ 42,122 $ 36,220
Marketable securities 42,274 59,829
Inventories 23,795 32,640
Accounts receivable, net and other 24,542 32,891
Total current assets 132,733 161,580
Property and equipment, net 113,114 160,281
Operating leases 37,553 56,082
Goodwill 15,017 15,371
Other assets 22,778 27,235
Total assets $ 321,195 $ 420,549
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable $ 72,539 $ 78,664
Accrued expenses and other 44,138 51,775
Unearned revenue 9,708 11,827
Total current liabilities 126,385 142,266
Long-term lease liabilities 52,573 67,651
Long-term debt 31,816 48,744
Other long-term liabilities 17,017 23,643
Commitments and contingencies (Note 7)
Stockholders’ equity:

31.
Common stock, $0.01 par value:
Authorized shares — 5,000
Issued shares — 527 and 532
Outstanding shares — 503 and 509 5 5
Treasury stock, at cost (1,837) (1,837)
Additional paid-in capital 42,865 55,538
Accumulated other comprehensive income (loss) (180) (1,376)
Retained earnings 52,551 85,915
Total stockholders’ equity 93,404 138,245
Total liabilities and stockholders’ equity $ 321,195 $ 420,549
Authorized shares — 500

32.
Supplemental Cash Flow information
The following table shows supplemental cash flow information (in millions):

Other Income (Expense), Net

Other income (expense), net, is as follows (in millions):

FINANCIAL INSTRUMENTS

Cash, Cash Equivalents, Restricted Cash, and Marketable Securities

33.
ACQUISITIONS, GOODWILL, AND ACQUIRED INTANGIBLE ASSETS

Intangible Assets

Acquired identifiable intangible assets are valued primarily by using discounted cash flows. These assets are included within
“Other assets” on our consolidated balance sheets and consist of the following (in millions):

DEBT

34.
COMMITMENTS AND CONTINGENCIES

Tax Contingencies

Information on reportable segments and reconciliation to consolidated net income (loss) is as follows (in millions):

35.
 Net sales are attributed to countries primarily based on country-focused online and
physical stores or, for AWS purposes, the selling entity. Net sales attributed to countries
that represent a significant portion of consolidated net sales are as follows (in millions):

Discussion
After doing the sort of analysis, I tend to find that Amazon is totally uses the Business to
Customer Model. Amazon totally rely on the customer and customer satisfaction is its primary
goal. Amazon handle its better relationship with customer by using CRM such as collecting
information of the customer like as all personal information of customers their credit card
record, transaction record, order record, profile, their past purchase history is collected in the
database.
Using of CRM, Amazon provides sort of advantages to the customer like as Personalization,
User rating and reviews, 1 click purchase, secure way for payment, minimum shipping charge,
etc.
Not only this Amazon.com carries out some of Associate programs to boost the customer traffic
and rate of sale Amazon with customers and small businessman. Developing and offering new
products to gain higher revenues is the goal of this intensive growth strategy. Amazon grows
partly by developing new products over time.

36.
 Conclusion
By making entry so easy, fast, and affordable, Amazon ensures that many people can sample
its products and become part of the Amazon experience, they also leverage on the possibilities
of the networking economy to reach out to more producers and consumers of products sold by
Amazon. Meanwhile, the Amazon ecosystem facilitates sharing of views and experiences by
consumers in multiple ways. At different times, some products contribute to more revenue than
others, but having them in one ecosystem allows Amazon to tweak offers and handle
administration tasks to succeed in capturing attention, promoting sharing, and facilitating a
networking economy.
From its humble beginnings as an online bookstore run from founder Jeff Bezos garage to the
wide-reaching web marketplace it has become, Amazon has continued to adapt to changing
consumer habits and desires. Through the implementation of Affiliate programs, the company
was able to exploit the willingness of other web sites to share (and therefore advertise) Amazon
content, while evolving the Amazon site itself to create an engaging platform for an ever-
growing community of sellers and buyers.
By addressing the need to create an attention-grabbing e-store, Amazon harnessed the power
of the user driven content which forms the backbone of Web 2.0, transforming itself from a
simple online book retailer to a true online marketplace made up of interconnected businesses
and individuals. Now, with the need for stable and secure data storage, the company has moved
from physical products such as books and CDs, to the fluid world of data hosting and
interpretation.
Despite challenges along the way, such as Patent Infringement lawsuits, Amazon has
maintained its reputation and image as one of the world’s most successful, powerful, and
expansive online retailers. One of the main challenges the business will encounter in the near
future is that of competition from real-world stores, who are beginning to match online prices
with more frequency and offering free delivery. The challenge is that ‘brick-and-mortar stores
have begun matching prices and providing instant pickup… indeed, a major flaw at Amazon is
shipping costs. If Amazon is able to supplement the income used for shipping costs, or start a
sustainable freight system internally, its future as an online retailer offering physical goods will
be assured. And if not, there’s always the data hosting and interpretation, a growth area in
which Amazon is already far ahead of its competitors.

37.
 References
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38.