Executive summary
Founded on May 28, 1996, Amazon Inc. is a company that operates in the sphere of e-commerce. Through a range of customer-oriented websites, Amazon offers its clients a wide variety of products, including content. The company often rebuys the offered products from other sellers or third parties offer their products for the company to sell. Sales operate both through retail websites and the specially designed tablet and smartphone application. Furthermore, Amazon is known for its own electronic products such as electronic readers Kindle, tablets, phones, and TVs (Reuters, n.d., para. 1).
Financial overview
The financial overview of Amazon Inc. comprises five years of financial information and is presented in the chart below. All necessary information was collected from web-resources like Market Watch, Google Finance, and Wikinvest.
Current market situation
Market description
The Market of e-commerce continues to be dominated by Amazon.com. With the emergence of the Amazon Prime service that offers quick delivery as well as music and video-streaming services, the company has acquired a new status in the sphere of e-commerce. Furthermore, with the testing of innovative technologies like delivery drones, Amazon is able to broaden the spectrum of its services and satisfy the needs of customers worldwide.
However, the expansion of the smartphone market with the Amazon Fire phone was unsuccessful; thus, there is reasonable doubt that the company will be able to combine the roles of an Internet marketplace and a smartphone manufacturer. In addition, Amazon is under threat from Walmart Corporate, which is conducting tests for a much affordable version of the Amazon Prime service.
Lastly, Google and Microsoft both compete with Amazon for a spot in the sphere of public cloud computing business and are trying to make the prices of their services fitting to battle with the prices offered by Amazon (Fortune, 2015, para. 6). Amazon has a five-tier strategy for satisfying the needs and requirements of its customers. The strategy includes the “customer first” culture, convenience, personalization, proactivity, and trust. By offering personalized products and services taking into account the convenience of their delivery, Amazon’s customer experience is one of the most satisfying.
Product review – Amazon Fire Tablet
The latest version of the Amazon Fire Tablet is a low-cost version intended to become an alternative to the iPad produced by Apple. By design, it is sturdy despite being covered in plastic and not metal (two times more durable than the Apple iPad 2).
However, the technical characteristics of the table are not up to par with products offered by competitors. The screen resolution is not enough for watching videos in High-Definition, although the tablet is quite useful for reading e-books for its adjustable light sensors. The features of Fire’s processor and RAM are again, not comparative with the features provided by Apple or Lenovo; however, for the price of $50, it was neither quick in its operation, nor it is filled with lags or glitches.
Overall, Amazon set low expectations for the $50 tablet; however, its capabilities have disproven them expectations. While, on the one hand, the Amazon Fire is not the best tablet on the market its durability is a contributor for making sure that it will last a long time. Furthermore, if it does not last, the price is low enough to buy a new tablet. To conclude, these are the main features of the Amazon Fire tablet:
Competitive review
The main competitors of the Amazon Fire tablet are iPad Air 2, Microsoft Surface 3, Samsung Galaxy Tab, and Lenovo Tab. All of the tablets exceed the majority of the characteristics offered by Amazon; however, none of them can compete with the Amazon Fire prices. Furthermore, the 2015 Black Friday sales and the Thanksgiving night sales were indicative of Amazon Fire tablet is the leader among all other tablets, including iPad Air 2.
However, Apple products still remain the leaders on both tablet and smartphone markets. Despite being more expensive than the Amazon Fire tablet, iPad Air 2 is much suitable for watching videos in high resolution and downloading games and applications. In addition, the iPad is much faster in its performance as well as offering much higher battery and storage capabilities, not to mention the high-definition camera.
Channels and logistics
In the majority of cases, customers who order from Amazon get their parcels delivered by the U.S. Postal Service or other options of the possible services; however, now Amazon is branching out to become its own delivery carrier, offering clients speedy services with its special Amazon Prime option. According to customer reviews found on various websites, Amazon-owned delivery services are much personal than that of the U.S. Postal Services. While UPS leaves packages at the front doors of entrances, call the customer to say that the package is delivered, Amazon makes sure that every package is delivered into customers’ hands (Frank, 2015, para. 5).
At the beginning of 2016, Amazon has also revealed new details about its innovative Drone Delivery Program (Amazon Prime Air). The delivery conducted by a drone should supposedly take thirty minutes; however, the parcel should not weight more than 5 pounds and be small enough in order to fit into the box carried by the drone. Luckily, approximately eighty-six percent of products sold by Amazon fit these requirements.
Amazon’s operation comprises four domains: business-to-business, business to consumer, consumer to business, and consumers to consumers. The primary distribution channel for videos, cloud drive computing, games, and software is the online channel while tangible products are distributed physically via centralized centers of distribution. For the operation with the distribution channel being effective, Amazon implements the following approaches:
- Bar-coding;
- Outsourcing;
- Quick response;
- Inventory Managed by the Vendor;
- Cost based on activity;
- The collaborative method of managing transportation.
Financial overview
Our target is to expand the business by at least 5% every month. In order to achieve this, we have strongly emphasized on robust sales for the first year and we intend to improve on that in the second and third years respectively. Our sales projections for the first year are $85,348. For us to achieve this, we have a plan to aggressively increase our sales month by month. By the end of the third year, we expect that the sales will have tripled. The business intends to draw down a minimum amount for it to have enough working capital to sustain it during its first year of operation. The figures below indicate the projected cash flows and profit and loss.
Mission statement
Our intention is to give our customers good quality and a good price. This will be attained by providing first-class products and competitive pricing of the products.
SWOT Analysis
Strengths
We expect our business to be the best in the region and rise above the competitors. We are determined to be exclusive in the market due to the following reasons:
- We intend to provide high-quality products at affordable prices.
- Our technology will be locally sourced, hence, reducing the high costs of production.
- We intend to utilize a part of our profits for social responsibility in society in order to promote good livelihoods.
- Our special technology for the products will be very hard to be replicated by our competitors, making our products have a distinct identity.
- We have adequate capital to start and operate the business until it breaks even.
Weaknesses
In as much as we would like to be an exclusive e-commerce company and distributor, there are some shortfalls that still hamper our business plans and operations. Moving on, we will position the business in a way that we can mitigate these weaknesses. The weaknesses include:
- The business requires hiring much personnel to help with the operations.
- The business also needs to work hard to traverse the wide market segment.
- The business needs to obtain a patent right for our brands to protect the identity and avert duplication of our brand by the local competitors.
Opportunities
The main reason why we are setting up the company is to be exclusive in regards to the quality of our distribution, for instance:
- Our customers will be highly entertained by our high profile products.
- We have the potential to reach a wide range of customers at the same time.
- We will offer exclusive services to our customers.
- There is a growing population of internet users, which translates to additional customers.
Threats
Even though we expect our business to be successful, there are threats that it is likely to face, for instance:
- Stiff competition from other distributors that operate within the same line.
- We will be constantly on our toes to maintain our unique identity in order to stay ahead of our competitors. Our focus will entirely be on quality as we make use of the locally available technology.
- Maintaining a competitive price for a new business is tricky; pricing still will remain to be our main focus.
Business objectives
First-year objectives
Our short term objective is to expand the business by at least 5% every month in order to realize a total sales target of $85,348. This means that we intend to sell at least 110 products daily for 365 days of the year.
Second-year objectives
Our main aim is to continue growing the business by bringing on board additional customers month by month; this translates to the fact that the business will grow exponentially. In addition, we intend to excel in our services until we become recognized as the best distribution outlet of the year. Consequently, we plan to expand by bringing in more customers through creating awareness.
Long-range objectives
Expansion is our key strategy. We need to expand within and without and continue spreading to other parts of the province. The expansion does not just end there; we intend to expand beyond our borders to reach the other new markets.
Corporate targets
- To be the fastest growing e-commerce firm through the acquisition of new clients;
- To re-assemble brand personality to dispense with the current brand picture related disarray among customers.
Business targets
- To expand total turnover by 25% in the one-year period;
- To develop the present dynamic client base by 20% in the one-year period;
- To build a piece of the overall industry by 1% in the one year period.
Advertising and communications targets
- To improve the brand’s premium, by moving concentration far from its value coordinating action;
- To plainly characterize brand character and make a convincing message to bolster it;
- To make a passionate bond with potential clients by emphasizing the advantages of the brand for the clients.
Issues
Just as it has been stated in our business objectives, our main motive is to make the outlet successful and consequently expand to a level where we capture the attention of billions of people across the world. Therefore, if everything works out as planned, we will appoint a professional manager and establish a professional team to run the business. If we fall short of our first year’s targets, it will mean that our business model is not viable; therefore, we will have to track and monitor the business activity and operations on a daily basis.
We intend to do a monthly examination of our sales and revenue so that we know our exact position. Also, the progress of the business will be checked at half a year’s time. If we still fall short of the targets we should re-assess our marketing and publicity. When our efforts do not pay off, then we will adopt the next option, which is to liquidate the business and pay off the debts which will have accrued by then. Actually, these debts will be negligible.
Marketing strategy
Product
The product is the good that is produced by the company, which is the products, in this case. The products will be sold in van products trucks a marketing strategy. The brand name is also unique in its own way as it differentiates the products from the competitors’ products. The quality of the products will be in line with the standard requirements for product production. The price of our products is set in line with the local forces of demand and supply, considering the fact that the market is readily available.
It is critical for the company to have a reasonable picture of what the client anticipates from them. The consumers’ decision on the nature of a brand is altogether different from their decisions concerning buying the merchandise or items.
This is on account of the brands are considerably more not quite the same as products. Products are unmistakable and can be touched while brands are not substantial; products are perishable, the brand is not, and so. In this way, these difficulties are faced by the clients when looking at brands and items. Brands cannot be felt, or touched, or tasted, or seen, unlike products or items. Clients are known to settle on decisions, taking into account both unmistakable and impalpable components.
Measurements like the quality of the product or service and the cost of the product in connection with the service are a few cases of elusive variables that impact the decision-making process of the consumers. The company ordinarily selects to focus on substantial components that impact the clients’ decision-making. The substantial measurements that they embrace are the quality of service, enhanced products, and so forth.
A brand differs from one supplier to another, furthermore from a client to another. Because of this variability, consumers have a tough undertaking to settle on a decision to pick one service provider over another. We, likewise, have a tough errand of keeping up an unfaltering level of operation regarding the quality of the products or the service. We will gauge the efficiency of the brand only after we have sold the service. On the other hand, a customer will gauge the efficiency of the brand only after he/she has bought it. Our level of professionalism will give the customers an insight in regards to the brand quality. In the same context, the feedback or responses received from customers will give us a perception of the customers’ satisfaction regarding the company’s brand.
Price
Price refers to the amount of money that the consumers will be willing to pay for the products in the market. Before deciding on the price to impose on the product, the company will compare the prices of the competitors so as to make sure that their prices are at par. After the company breaks even, it will be upon it to review the price of the products with the changing environment.
Place
Place refers to the locality where the products can be purchased. It describes how the product will follow the distribution channel before reaching the final customer. The company will initiate direct marketing and personal selling as a form of distribution technique for the products. The distributors and wholesalers will buy the products direct from the company before selling to the retailers, who in turn sell the beer to the final customers.
Promotion
The promotional campaign of the company revolves around the marketing mix. The marketing mix is a combination of various aspects of marketing that are geared to drive the company into achieving its objective of popularizing the products to the consumers. Marketing mix, therefore, lays a benchmark for the implementation of the company’s marketing strategies. Marketing is any paid non-individual interchanges through different media by a recognized organization, non-benefit association or person.
The primary advantage of this way to deal with interchanges is that it furnishes the publicist with complete control of what message and feeling to bestow into the promotion. Any brand can advance its advantages in a powerful manner to purchasers and endeavor at drawing in them with a message of useful and/or enthusiastic qualities, to expand brand/item thought and deals.
As a consequence of good purchaser and contender knowledge, brands can make promoting which displays them in the best conceivable light, to engage potential clients. Media stations, techniques and innovative yield are all measured and are chosen by the brand/organization, making the outcome useful much of the time. On the other hand, it has been contended that regardless of the brands’ best goals to put in the most convincing and positive message into their publicizing, shoppers may translate the message diversely to what it is proposed to be interpreted as.
The translation of boosts and signs in the environment is reliant on numerous individual qualities of the message beneficiary which is the reason the same boost may be understood diversely by diverse individuals.
Position
Before the launch of our products outlet, we intend to carry out a marketing campaign whereby we will officially announce the launch of the products outlet and we will emphasize how different it is from other outlets in the locality. We will also inform the potential customers on our unique identity that makes us differ from the other products outlets. We will work aggressively in the first three months in order to maintain our profile.
We will also use posters to advertise the official opening date and also carry out a tasting session on the due date. Our marketing and sales campaigns will be aimed at capturing the attention of the competitors’ customers so that we can bring them on board.
Consumers can buy physical items at any given time because of the way that they can be put away and sold whenever a consumer gets some information about their accessibility. Then again, it is impractical to store a brand. At the point when a brand is not sold, it means that the brand does not exist in any case. One way of illustrating this is to take, for instance, a customer who has made a reservation and fails to show up (Codrington, 2002, p. 40).
Market research
Amazon.com, Inc. is a company that operates in the sphere of e-commerce. Through a range of customer-oriented websites, Amazon.com offers its clients a wide variety of products, including content. The company often rebuys the offered products from other sellers or third parties offer their products for the company to sell. Sales operate both through retail websites and the specially designed tablet and smartphone application. Furthermore, Amazon is known for its own electronic products such as electronic readers Kindle, tablets, phones, and TVs.
Action programs
Just as it has been stated in our business objectives, our main motive is to make the outlet successful and consequently expand to a level where we capture the attention of billions of people across the world. Therefore, if everything works out as planned, we will appoint a professional manager and establish a professional team to run the business. If we fall short of our first year’s targets, it will mean that our business model is not viable; therefore, we will have to track and monitor the business activity and operations on a daily basis.
We intend to do a monthly examination of our sales and revenue so that we know our exact position. Also, the progress of the business will be checked at half a year’s time. If we still fall short of the targets we should re-assess our marketing and publicity. When our efforts do not pay off, then we will adopt the next option, which is to liquidate the business and pay off the debts which will have accrued by then. Actually, these debts will be negligible.
Right now, The company focuses on a fairly wide client section, and can be regarded as lacking concentration because of the premium cost of its various offers, whilst advancing itself as less expensive than the others competitors’. The brand is right now focusing on clients who might ordinarily shop at the company. This inexorably prompts a certain level of perplexity as to what the company remains for, and an integrated marketing communication crusade would need to focus on this. It could hence be presumed that the centered retailer now targets high profile clients; what’s more, needs to narrow this down to all the other clients in light of a legitimate concern for better characterizing its market suggestion, hence, expanding its deals in the long haul.
Their principle leeway is that they work physical stores, which clients are acquainted with and are thusly more prone to trust these brands’ administration. On the other hand, this test can be overwhelmed by essentially dodging direct rivalry with these retailers. The company, having been connected with many clients, because of their long run association, is more inclined to draw in the competitors’ clients, instead of simply looking for ones who rely on discounts.
The test that the company is confronted with is persuading potential clients that it remains for high caliber at a premium value, and is pretty much as solid as any physical store, however, with a more proficient online business model. This can be accomplished by utilizing a painstakingly organized IMC campaigns directed to probable clients. Cautious knowledge into the objective client profile would help in distinguishing key customer conduct and inclinations, which need to be tended to by the company.
Altogether, for the company newly incorporated campaign to be effective in accomplishing the set destinations, it needs to be completely adjusted regarding the methods and the execution. The industry can possibly make a perfect association between the brand and the purchaser, however that would just be conceivable if the center procedure supporting the campaign is completely actualized all through the entire organization, with a specific end goal to accomplish a full coordination of exercises and operations working towards the same objective aimed at the business achievement.
The company’s two primary marking communications objectives are to convey a premium picture and to stress the psychosocial advantages of its dedication plan, and the retailer by and large. These two objectives, in spite of being independently recognized, can be accomplished all the while, through a painstakingly executed incorporated campaign, which is high quality, while connecting with the customers on an enthusiastic level.
Presently, the company’s business is composed around the thought of providing valuable services to the clients. This is reliable with the marketing campaigns which have not been exceptionally effective previously, as they have produced perplexity and suspicion among customers. That is the reason why another focal thought needs to be produced, which will bolster the vital change of brand picture and will assume a focal part in the newly incorporated marketing campaign.
The new thought and trademark will characterize the adjustments in the key course for the business, and will help in wiping out perplexity about the brand later on. The newly coordinated advertising campaign will be implemented under the thought of the time, instead of expense, sparing the point of interest of the business and will go for setting up a passionate association with the objective buyers, who are in the upper middle class. These buyers are associated with a substantial work timetable and minimal extra time to go through with their friends and family.
Push marketing involves advertising and circulation networks and is gone for persuading outsiders to advance the organization advertising. Push techniques incorporate exchange shows, displays, engaging suppliers, and making a production network to encourage circulation. Such a methodology is, for the most part, treasured to producers hoping to construct a conveyance system for their items. On account of the company, it being a mechanical company as opposed to an organization offering a solitary item, it does not fundamentally need to actualize a push procedure of marketing in the customary sense.
Due to the fact that push methodologies are principally concerned with pushing a solitary item through different circulation channels to the buyer, such methodologies are not significant to The company as the organization is in control of its own appropriation and is indeed more inclined to be an objective of push procedures, instead of a dynamic implementer of such. Push promoting ordinarily includes building associations with wholesalers to backing the vicinity of an item available in-store or on the web. In any case, as a merchant itself, the company is the last purpose of contact in the middle of the brand and the customer and is hence in charge of its own business identity.
With the goal for the company to be a favored wholesaler for premium items, it needs to have an interest in such items by shoppers. By making the company more obvious to customers, and a favored shopping destination for products, a pull marketing technique would help build interest for the company’s sourced items and would, therefore, make free suppliers more intrigued by building an association with the company.
It is, thus, of basic significance for the company to execute a pull marketing method keeping in mind the end goal to continue adding to the business, on both the supply and the demand side. The pull marketing showcasing is the demonstration of executing promoting and special methods that are intended to tempt the prospect to purchase your item or administration. Pull marketing advertising is coordinated at buyers, as opposed to promoting or conveyance channels, welcoming them to look for the item or the benefit themselves through alluring promoting and/or persuasive exercises.
The company can take advantage unequivocally from the usage of different pull marketing procedures, thus, exercises would elevate the company to the objective buyer and make it more unmistakable, which could conceivably prompt client securing and maintenance. As of now, the company is expanding its client base at a relentless level; even though it needs a correspondence push so as to plant it in the purchaser minds for the long haul.
Numerous internet shopping-favoring shoppers might not have offered thought to the company, and an in number coordinated promoting interchanges campaign in light of the drawn procedures. This would assume an indispensable part in expanding levels of thought and transformation. The previously stated examination of the importance of push marketing and pull marketing procedures to the company’s new campaign prompts the determination that a pull marketing procedure would be most fitting for the automobile company for the motivation behind re-marking and client procurement.
A pull marketing method can be executed by different components, for example, promoting in distinctive structures, public relations, direct advertising, advanced promoting, and that’s just the beginning.
Budget
Out of the $15,000 required to start up the business, I have personally raised $5,000. The total monthly expenses will be $1,500. Every month I will pull $1,800 for my upkeep so the business also moves on. I am searching for an additional investment of $10,000. I am talking to banks and other potential bodies. The projected cash flow, balance sheet and profit and loss account are attached in the appendices.
Direct costs
These are the continuing costs that we are likely to incur in our daily production of our products. The direct costs include the amount of money we will spend daily.
Overheads
These are the costs we intend to incur in the daily business operations. These costs cannot be avoided, and the business can come to a stop if we cease to pay them.
Conclusion
Amazon.com, Inc. is a leader in the market of e-commerce with a primary aim of reducing costs for vendors and sellers, providing clients with a large variety of products and services, which are delivered via the Internet and postal services. The innovative ideas like the Amazon Prime Air, if implemented successfully, will set the company apart from its rivals like eBay or Walmart.com. Despite the fact that Amazon does not lead the market when it comes to smartphones and tablets, its spot within the e-commerce sphere cannot be taken easily.
Appendices
Appendix 1: Projected cash flow
Appendix 2: Projected profit and loss
Appendix 3: Projected balance sheet
References
Codrington, G. (2002). Welcome to the Future World. Future Business. Marketing, Media and Business in S.A., 1(1), 38-40.
Fortune. (2015). Amazon. Web.
Frank, B. (2015). Delivered by Amazon: What It’s Like to Get a Package from the Online Retailer. Web.
Reuters. (n.d.). Profile: Amazon. Inc. Web.