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HYPER COMPETITIONIN E-COMMERCEAMAZON INDIA
THE INDIAN CONTEXT – UNUSUALLY ENERGETIC!
• Nearly 43% Source: Ministry of Statistics & Programme Implementation)
Young Population
• Rising Disposable Income and Improving Standard of Living
• World’s 2nd Largest Mobile Phones User Base• Impressive Gross Domestic Product record
Fastest Growing
Asian Economy
• Increasing Government Expenditure for Rural Development
• Internet Penetration through Economical Smartphones (Increased Teledensity from 1.2 in 2012 to 3.8.5 in Feb 2012) (Source: www.trai.gov.in)
• Free Basic Internet Service Eg. Internet.org
Untapped Rural Market
Source: https://data.gov.in/catalog/below-poverty-line-india
Mobile Phone Internet User Penetration to rise from 30.1% to 47.4% in 2017 Source: www.statista.com
The Net National Income has been showing a continuous growth trend
Base Year: 2004-05Source: https://data.gov.in
Decreasing Poverty Line
2004-05
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11
2011-12
2012-13
2013-14
020406080
100120140160180200
NNI
NNI
ON THE FLIPSIDEDemographic Transition
Decline in child population of age groups 0-6 years and 7-14 yrs
E-COMMERCE SYSTEM• Online Travel, ticketing, etc
– Ticketing for air, rail, bus, movies, events• Online Retail*
– Retail products sold through online route• Online Marketplace
– Platform where sellers and buyers transact online• Online deals
– Deals purchased online, redemption may or may not happen online
• Online Portals classified– Include car, job, property and matrimonial portals
NMIMS - PTMBA | STRATEGIC MANAGEMENT | TRIMESTER III
*Goldman Sachs has projected that India's online retailing market, which is already one of the largest in the world, will expand to $69 billion in 2020 from $23 billion in 2016 - The Economic Times, March 16, 2016
Founder : Jeff Bezos
Amazon.com, Inc. founded in 5th July 1994. Is an American international electronic commerce company, headquartered in Seattle, Washington, United States
Amazon.com started as an online bookstore, but soon diversified, selling DVDs, VHSs, CDs, video and software, video games, electronics, apparel, furniture, food, toys, and jewellery
Amazon Kindle e-book reader and the Kindle Fire tablet computer.
The 4th most successful start-up company of all time by market capitalization, revenue, growth and cultural impact
“O U R VIS ION I S TO BE
EARTH 'S MOST CUSTOMER
CENTRIC COMPANY ;
T O B U I L D A P L A C E W H E R E P E O P L E C A N C O M E T O F I N D A N D
D I S C O V E R A N Y T H I N G T H E Y M I G H T WA N T T O
B U Y O N L I N E ”
“ O U R M I SS I O N I S T O L E V E RA G E
T E C H N O LO GY A N D T H E E X P E RT I S E O F I N VA LU A B L E
E M P LOY E E S A N D T O P R O V I D E C U S T O M E R W I T H T H E
B E S T S H O P P I N G E X P E R I E N C E O N T H E
I N T E R N E T ”
I t i s a r e p r e s e n t a t i o n o f t h e w i d e r a n g e o f i t e m s a v a i l a b l e f o r r e t a i l b y A m a z o n
Literal ly everything from A to Z
Yo u m i g h t h a v e n o t i c e s t h e A m a z o n l o g o l o o k s l i ke a s m i l e y f a c e b u t a s e c o n d l o o k s h o w s t h a t t h e a r r o w g o e s
f r o m A t o Z
#100 % Original Products
NMIMS - PTMBA | STRATEGIC MANAGEMENT | TRIMESTER III
#On-Time Delivery
#Friendly Customer Service
#Virtually Anything
5PS OF STRATEGYPLAN
NMIMS - PTMBA | STRATEGIC MANAGEMENT | TRIMESTER III
PLAN – CONT’DINTERNATIONAL PRESENCE• Australia• Brazil• Canada• China• France• Germany• Japan• Mexico• Netherlands
• Spain• United
Kingdom• United States• Italy
PLOY• International Brand• International Market Expertise• Fulfillment by Amazon• Junglee.com• Kindle – a niche market segment• Acces to nearly 19000 pincodes
NMIMS - PTMBA | STRATEGIC MANAGEMENT | TRIMESTER III
POSITION
NMIMS - PTMBA | STRATEGIC MANAGEMENT | TRIMESTER III
Books
DVDs/Video Downloading
Software, Games, Electronics
Apparel, Furniture, Food
PossiblyAnything
NMIMS - PTMBA | STRATEGIC MANAGEMENT | TRIMESTER III
www.amazon.in
• Innovation since Inception– Kindle– Amazon Exclusive– Gift a Smile– Self Return– One click pay (yet to be introduced in India)
PATTERN
NMIMS - PTMBA | STRATEGIC MANAGEMENT | TRIMESTER III
PERSPECTIVE
NMIMS - PTMBA | STRATEGIC MANAGEMENT | TRIMESTER III
• Mergers and Acquisitions– Emvantage - To ensure the best in class online payment experience– Digital Wallet - Limited access to the customer’s data
• Corporate Social Responsibility– Gift A Smile
• Customer Engagement and Customer Service– One click pay– Digital wallet -To target refunds
PESTEL• Political • Economic • Social • Technological • Environmental • Legal
NMIMS - PTMBA | STRATEGIC MANAGEMENT | TRIMESTER III
POLITICAL
NMIMS - PTMBA | STRATEGIC MANAGEMENT | TRIMESTER III
• International policies and polices related to online purchase
• Government’s policies, politician’s interests, and the ideologies of several political parties
• Regulations are also interfering with online purchases.
• Internet providers are advancing which is bringing faster and more affordable internet
• Government policies promote competition through telecom liberalization, e-commerce promotion and legislation
ECONOMIC
NMIMS - PTMBA | STRATEGIC MANAGEMENT | TRIMESTER III
• India Economy is stable since introduction of the industrial reform policies in 1991.
• Currency fluctuations• Reductions in industrial licensing, liberalization of
foreign capital • Internet retailing Growth between 2006 and 2011,
sales rising by 100%• 143 million of these will be in Asia-Pacific
SOCIAL
NMIMS - PTMBA | STRATEGIC MANAGEMENT | TRIMESTER III
• Any changes in trends impact a business environment
• In the world the internet is restricted due to religious and ethical factors
• Internet growth rate is outstanding, With internet users increasing every year
• Social networks are booming, like Facebook, Twitter• Product category risk and financial risk decrease
online shopping
TECHNOLOGICAL
NMIMS - PTMBA | STRATEGIC MANAGEMENT | TRIMESTER III
• With Amazon being an online retailer, they are forced to find innovated methods to surpass their competitors
• Internet access available through mobile device or tablet• India possesses one of the strongest IT sectors in the world, • Price comparing available for consumer is anywhere in the
world shopping. • Amazon can offer very competitive prices
ENVIRONMENTAL
NMIMS - PTMBA | STRATEGIC MANAGEMENT | TRIMESTER III
• Quality of air in India affected by industrialization and urbanization
• Amazon is offering cloud storage and cloud computing• Potentially see millions of electronics like hard drives and
computer components no longer needed in mass production
• Online shopping have less pollution from vehicles• Shipping the products add unnecessary packaging for
shipment
LEGAL
NMIMS - PTMBA | STRATEGIC MANAGEMENT | TRIMESTER III
• Number of legal changes have been implemented in India• selling overseas need to be aware of international laws • Separate laws depending on the state• selling multimedia over the internet require certain rights
to the media. • For e.g. Hollywood fighting sale of digital copies • 100% FDI on E-commerce business
IN A NUT SHELL• Political, economic, social, technological progress indicates an
increasing and attractive market to be exploited by Amazon.com • The Indian markets have shown exceptional growth. The use of
internet as a social networking channel has created new opportunities to be exploited, additionally , as environment awareness increased globally ,
• it is important that Amazon.com’s attractive also suggests that strategies friendly activities.
• The global nature of Amazon.com’s activities also suggest that strategies developed should comply with the different legal obligation internationally.
NMIMS - PTMBA | STRATEGIC MANAGEMENT | TRIMESTER III
SWOT ANALYSIS• Well Known brand with large customer
base – Top of the mind RECALL• Diverse product offerings at Low
costs• Working with minimum profit & gaining
from Economies of scale• Experience of over a decade in online
shopping industry internationally• Superior logistics & distribution
systems
• Operating at Low Profit Margins• Diversification strategy leading to
shift of focus from core competences
• Criticism for working conditions• Dependence on vendors• Missing touch and feel of products
for purchase
• Online Security threats• Strong Indian competitors FLIPKART, MYNTRA, SNAPDEAL• Regional Low cost retailers• Flexible FDI policies enabling possible
entries of other players like Walmart, Alibaba, etc
• Customer Loyalty.
• Indian retails industry worth is huge with still growing potential
• Acquiring local small business enterprises, enabling expansion
• Opening physicals stores• Tie-ups with major players of untapped
Markets• Expand into more product segments –
Online Movies, streaming etc.
NMIMS - PTMBA | STRATEGIC MANAGEMENT | TRIMESTER III
KEY STRATEGIC CHALLENGES
Find new areas of Growth
How to maintain the long term profitability
NMIMS - PTMBA | STRATEGIC MANAGEMENT | TRIMESTER III
CORPORATE LEVEL STRATEGYOTHER BUSINESS’S BY AMAZON:• Amazon Web Services• Kindle• Amazon Now• Amazon Businesses• MYHABIT
ACQUISITIONS:• Junglee.com• Look.com• Audible• Diapers.com• Shopbop• DPReview• Yoyo.com• IMDb
Amazon
Consumer
Sellers Enterprises
Content Creators
NMIMS - PTMBA | STRATEGIC MANAGEMENT | TRIMESTER III
BUSINESS LEVEL STRATEGY
OVERALL COST LEADERSHIP
COST FOCUS DIFFERENTIATION FOCUS
DIFFERENTIATION
HIGH COSTLOW COST
BROAD
NARROW
COM
PETI
TIVE
SCO
PECOMPETITIVE ADVANTAGE
PROFITABILITY STRATEGY
Short Term
Profitability is low due to
Large Capital investments
Long Term
Profitability is High due to high growth
market
NMIMS - PTMBA | STRATEGIC MANAGEMENT | TRIMESTER III
INDUSTRY APPRAISAL
HOW DOES AMAZON EXPLOIT THE INDUSTRY STRUCTURE ?• By managing logistics efficiently• 100% original products• Customer Satisfaction• Speedy Delivery
COMPETITIVE ADVANTAGE
NMIMS - PTMBA | STRATEGIC MANAGEMENT | TRIMESTER III
PORTERS 5 FORCES
Competitive Rivalry
Potential Entrants
Buyers
Substitutes
Suppliers
Threat of Entry
Bargaining Power
Threat of Substitutes
Bargaining Power
Threat of New Entrants : LOW• Virtually impossible to reach the magnitude of inventory
and status that Amazon maintains.• Difficult for a start-up to raise enough capital to compete
with Amazon.• Economies of Scale
Threat of Substitutes : HIGH• Lot of Physical Stores Available• Most companies/brand have a online store as well• The physical stores and websites may not offer the same
quality of customer service and convenience to its customers.
NMIMS - PTMBA | STRATEGIC MANAGEMENT | TRIMESTER III
Bargaining Power of Buyers : HIGH
• Indian Customers are price sensitive, less brand loyalty• They will easily switch to a competitor if he offers a
lower price
Bargaining power of Suppliers : Medium
• Inventory can be sourced from multiple suppliers• Amazon buys in bulk and hence can use their influence
over smaller suppliers.• Suppliers offer similar sales on their websites as well
NMIMS - PTMBA | STRATEGIC MANAGEMENT | TRIMESTER III
Competitive Rivalry : HIGH
• With similar offerings there are 2 major competitors Flipkart and Snapdeal
• Several competitors in terms of products offered
Industry Attractiveness is Medium : HIGH
NMIMS - PTMBA | STRATEGIC MANAGEMENT | TRIMESTER III
COMPETITOR ANALYSISC o m p e t i t o r i d e n t i fi c a t i o n
KEY COMPETITORS
• Flipkart • Snapdeal• eBay• Jabong• All Brick and mortar stores
COMPETITOR ANALYSIS
Source: http://economictimes.indiatimes.com
LOSS IN MARKET SHARE IN 2015
COMPETITOR ANALYSIS
Source: http://economictimes.indiatimes.com
AMAZON PIPS SNAPDEAL TO BECOME INDIA'S 2ND LARGEST ONLINE MARKETPLACE AFTER FLIPKART
FlipkartAmazon
SnapdealOthers
0
5
10
15
20
25
30
35
40
45
Amazon Vs Flipkart Vs Others
Share of Shipment Market Share Order Perday
COMPETITOR ANALYSIS
Source: http://economictimes.indiatimes.com
Amazon32%
Flipkart24%
HomeShop1824%
Infibeam12%
Crossword8%
Discount Offered uptoAmazon Flipkart HomeShop18 BookAdda Infibeam Crossword
COMPETITOR ANALYSIS
Source: http://trak.in
COMPETITOR ANALYSIS
Source: http://trak.in
COMPETITOR ANALYSIS
Source: http://trak.in
COMPETITOR ANALYSIS
• The Largest Competitor as of now in India is Flipkart with Highest score
• Flipkart has 80% share of the online book market in India
• Flipkart now has a wide reach in the Indian market and the delivery time is just 2 days and sometime next day
• Flipkart 75 million registered users• Other Competitors includes – Ebay.in, Snapdeal,
Jabong, Homeshop18NMIMS - PTMBA | STRATEGIC MANAGEMENT | TRIMESTER III
Mobile Tablets Laptops Camera0
10
20
30
40
50
60
70
80
90
Brands : Catalogue Size for Consumer Electronics
Amazon
COMPETITOR ANALYSIS
Source: http://www.nextbigwhat.com
Mobile Tablets Laptops Camera0
100
200
300
400
500
600
700
800
900
1000
No. of Products: Catalogue Size for Consumer Electronics
Amazon
COMPETITOR ANALYSIS
Source: http://www.nextbigwhat.com
0
50
100
150
200
250Who Has Better Lifestyle Products
Amazon Flipkart
COMPETITOR ANALYSIS
Source: http://www.nextbigwhat.com
Mobiles Laptops Tablets Cameras Total0
200
400
600
800
1000
1200
1400
1600
1800
Amazon SKUs Vs Flipkart SKUsAmazon Flipkart
COMPETITOR ANALYSIS
Source: http://www.nextbigwhat.com
Warehouse Location
[Fulfillment Centers]
Ahmedabad, Hyderabad, Chennai, Bangalore, Mumbai, Delhi, Kolkata, Nagpur, Pune
Human Resource
Management
Diverse Culture, Various Employee Benefit - Health, Employee Assistance, Stock
Technology Developme
ntAnalytics
(e.g. Junglee.com)
VALUE CHAIN ANALYSISAmazon India
Support Activities
Inbound Logistics
• Suppliers can arrange drop-in their products • Or Schedule a Pick-up
Inventory Managemen
t
• Single unit to entire inventory• ‘Pay as you go’
Packaging• Buys packaging material from Dynaflex, a Vadodara based
company
Outbound Logistics
• Delivery of products to customer• Refunds of products• Amazon Transportation Services Private Limited
Post Sales Services
• customer service department• Returns
Primary Activities
HIGHLIGHTS OFAMAZONIN INDIA
India’s largest online market place
Brought about a change in Shopping
Experience
Bliss for all the Readers !
R U S H A B H S H R O F F 4 5J AT I N S I N G H 4 7K R U N A L T H A K K A R 4 9A M Y T H A K K E R 5 0
D E V E N D R A S I N G H4 6D H AVA L VA S A N I5 2V I R E S H V E N N A
5 3
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