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Amazon Case Study
Transcript of Amazon Case Study
Establishing Amazon Europe
Amazon.co.uk began with the acquisition of bookpages.co.uk
Amazon.de (Germany) began with the acquisition of telebuch.de
In 2000 Amazon launched a French subsidiary with no acquisitions
Once the locations stop operating independently, how should the European Distribution Network (EDN) be configured?
3 Possible EDN Configurations
Consolidate the existing distribution centers into one single european location
Consolidate the existing distribution centers into two, for servicing northern and southern Europe
Keep the three existing distribution centers
1999 - 27 billion Euros in book sales in Amazon Europe
2001 - over 13 billion Euros spent on European e-commerce
2002 - Amazon’s international revenue reaches $1.2 billion and is the fastest growing segment
Keep all three distribution centers
Decreases lead time
Wider product variety
More customized marketing
Invest in product innovation
In 2007, Amazon introduced the Kindle
The Kindle now accounts for 10-15% of Amazons total revenue
Key Decision Criteria
1. Shipping integrity & cost
2. Warehousing capacity
3. Cultural flexibility & presence
Adherence to company mission
Long term profitability
Action and Implementation Strategy
Middle-ground approach for implementing EDN, and maintaining three separate DCs.
Amazon "Proper" Membership
What could this provide?
Avoid dissociation of countries from Webpages
Minimize obsolescence of certain payment terms, and consolidate method of payments through online database.