OVERVIEW OF AMAZON Harvard Case Solution & Analysis


Amazon is an American electronic commerce and cloud computing company with headquarters in Seattle, Washington. It is the largest Internet-based retailer in the world by total sales and market capitalization.Later on after diversifying, the company started selling DVDs, Blu-rays, CDs, video downloads/streaming, MP3 downloads/streaming, audio book downloads/streaming, software, video games, electronics, apparel, furniture, food, toys and jewelry. The company also produces consumer electronics, mostly Amazon Kindle e-readers, Fire tablets, and Fire TV; and it is the world's largest provider of cloud infrastructure services. Amazon also sells certain low-end products such asUSB cables under its in-house brand, Amazon Basics.

Jeff Bezos, the Chairman and CEO of the company, initially started the company with 20 products.Amazon has retail websites in the United States, the United Kingdom, Ireland, France, Canada, Germany, Italy, Spain, Netherlands, Australia, Brazil, Japan, China, India and Mexico. The company was founded in 1994,however initially it was a loss making company and had its first profit in the 4th quarter of 2001.Over the 2000-2010 decade, Amazon developed a customer base of around 30 million people. Amazon.com is primarily a retail site with a sales revenue model. Amazon generates income by taking a small percentage of the sale price of each item, which is sold through its website. Amazon also allows companies to advertise their products by paying to be listed as featured products.Currently, Amazon is selling thousands of products online such as Appliances, App store for Android Arts, Crafts & Sewing Automotive, Baby Beauty Books Camera & Photo Cell, Phones, Accessories and etc.


Amazon has been up 10% after the results of Q1 2016 due to earnings higer than expected driven by cloud services business.However, the earnings were a mere $1.07 per share in Q1 2016 and operating margin wasin the range of 2%-4%.

The sales revenue increased to $107 billion from $48 billion in last 5 years whereas, the cost of goods also increased to $78 billion from $37 billion. Moreover, the net income decreased to $596bn from $631bn  with losses in 2012 and 2013, and this was mostly due to high cost and expenses.


  • Founded in 1994
  • 224m active users
  • 54m prime users
  • 30m Average monthly users
  • 89 total warehouses
  • Number of products purchased each year estimated to 2 billion
  • 44% of web shoppers
  • Average amount of 15004 spent by prime users annually
  • 70% people shop amazon from mobile devices
  • Amazon’s gross sale of 2015 is 107 billion $
  • 150 brands available
  • 30 million clothing items available
  • Amazon’s sellers are present in 100 countries
  • Total number of units ordered are 16 million
  • Male employees are 61% while female are 39%
  • Phone sold in first 25 days of availability are 35000
  • Number of applications and games are 240000 online
  • More than 1 billion items are supplied

Amazon’s stock has run up by over 45% over the past six months, driven by various benefits such as improvement in profitability and higher than expected top-line and bottom-line results in the cloud services business. The company supports highest valuation among its peers in the online retail sector. Amazon’s revenue is not directly comparable to that of Alibaba and eBay; as the latter two companies operate as market, in which they do not own any inventory and only act as a medium between third-party sellers and buyers......................

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