EMERGING MARKETS

INVESTMENT

Introduction
Introduction
- From book store to online-retail market
- Best company in US, Most valued brand
Mission : Customer-centered company
- Every strategy starts and ends with customer satisfaction
- Always trying to improve customer satisfaction and experience
The main issue
- Learning from failure in China, and strategy for emerging market

External Analysis
Opportunities
-

Development of technology

Strengthen the provided services (payment solutions)

Improve logistic solution

Set up in new market (Emerging countries)

Threats
-

Tougher legislation (carbon emissions, price, shipping)

High rivalry intensity on the market (weak entry barrier, attractive market,
many competitors)

Internal Analysis
Strengths

Strong
competitive
advantage as a pioneer and
leader in online sales
Wide variety of products
offered
Attractive competitive prices
Customer service
Efficient supply chain
Reputation, brand image
Economy of scale
Large amount of expertises
in technology
Customers loyalty

Weaknesses

Internet is not accessible to

everyone
Very low profits margin
No
physical
presence
(presence only online)
Some criticisms such as poor
warehouse conditions for
workers
Free shipping affects profits

Corporate Strategy
1. Customer-oriented policy
-.

Emphasing the interests of interests of consumers

1. Growth Strategy
-.

3.

relentlessly investment: R&D and expansion

Financial Strategy
-. sustainable Free Cash Flow per share

Financial Key Ratios

12
/1/
20
05
Effeciency
Cash
Conver 31
sion
.1
Cycle
9
Profitability
Revenu 10
e
0

12
/1/
20
06

12
/1/
20
07

12
/1/
20
08

12
/1/
20
09

12
/1/
20
10

12
/1/
20
11

12
/1/
20
12

12
/1/
20
13

12
/1/
20 TT
14 M

- - - - - 26 - 31 40 43 38 35 30 - .9 26 .8 .6 .1 .0 .6 .6 24 6.
8 .7 5 2 7 6 3 2 .9 98
10 10 10 10 10 10 10 10 10 10
0 0 0 0 0 0 0 0 0 0

68
75. 77. 77. 77. 77. 77. 77. 75. 72. 70. .7
COGS 98 07 4 72 43 65 56 25 77 52 4
31
Gross 24. 22. 22. 22. 22. 22. 22. 24. 27. 29. .2
Margin 02 93 6 28 57 35 44 75 23 48 6

SG&A

18
13. 13. 12. 12. 17. 12. 14. 15. 17. 18. .9
62 02 61 62 54 86 28 92 26 71 9

Failure in Chinese market

- lack of knowledge about
Chinese market and consumers
(failed in selling model of Kindle)
- standard technology
- overlooking the competition
- inability to communicate with
Chinese authority
- lack of ambition in Chinese
market (not put much effort on
marketing campaign)

Indian market performance

- high growth rate of e-commerce
- regulation obstacle for FDI in online
retail
- fierce competitors in the market

Customers trust factors

- Website Trust (payment related issue,
security, content etc.)
- Organizational Trust (brand recognition,
order fulfilment, competence, perceived
size of organization etc.)
- Customer Trust (past site experience,
propensity to trust, knowledge and
experience in Internet usage etc.)

Summary
- understand customers
- growth balance with profit
- aiming new market (ASEAN for example)

Thank You!