Amazon Corporate Profile - Case Study Example

BUSINESS REPORT: AMAZON Executive summary Amazon. Com operates under a wide range of products that have been developed and advanced over a long period since the company’s inception. The company operates a subset of a number of initiatives that include Prime; that was established nine years ago and has witnessed tremendous growth over years. Prime instant video which is an online video streaming platform has had an increase in the number of customers using, as well as increased number of streams being watched all over the world. Fire TV has greatly expanded to include other non-Amazon applications such as Netflix, VEVO, Hulu Plus among others. The system has been backed up by a large number of features which includes voice search and provision of instant access to a wide range of movies as well as TV episodes. Amazon Appstore has expanded to over 200 countries, and the trend is expected to continue. Spoken Word Audio emerged as the most listened audio book platform as the system incorporated the voices of many stars who people love to hear as they go about their business. Other subsets that have greatly improved in the year 2013 include Readers & Authors, Amazon Game Studios and Amazon Web Services. The report outlines the commitment as well as dedication of the company to its shareholders, customers and its employees in a number of areas that are of concern to each category of the stakeholders. The company seeks to assure its shareholders on the radical steps that it seeks to pursue in order to expand its customer and also to attract more shareholders so as to boost its end of the year profits. The customers, who form the bedrock of every organization, have something to smile about owing to the firm’s strategies that are aimed at meeting the needs of various customers. Sales to customers have witnessed 838% increase since the year 1996, and the trend is expected to increase more in the coming years. Cumulative customer accounts have improved by 738% since 1996. The firm has widened its corporate partnership with other organizations such as America Online, Yahoo, GeoCities among others. This initiative has greatly improved and advanced the firm’s service delivery to its customers enabling it to achieve a huge customer base. The employee base has increased from 158 to 614 since the year 2007 in order to meet the ever increasing demand for the firm’s service delivery. Infrastructural development has been witnessed in terms of inventories that have increased immensely thus making the firm’s products more available for its customers. The increased level of competition emerging from firms in the same industry has spurred the company into greater heights of exploration in order to compete favorable in the global scope. The risk factors faced by the company includes intense competition has called for diversification of the company’s products so as to retain its market share. Other competitors have formed alliances such as mergers and acquisitions making them more competitive due to economies of scale. As the firm seeks to enlarge, there has been a lot of strain in the available resources including the working personnel, financial position and operations. The risks have further been aggravated by the increased product range. Another risk factor is due to fluctuations in the firm’s operating results as well as growth rate. This is because most of the operational statistics are based on sales’ projections as well as past information from the financial statements. Corporate Profile The company first came into inception in the year 1994 in the State of Washington and 1995 in the State of Delaware. The head office is located in Seattle in the State of Washington. The company first made itself accessible to its customers in the year 1995 on the World Wide Web platform, and it has aspired to be customer-centered in order to meet their needs. The major areas of operation are the Northern part of America as well as the rest of the world. The consumers who are the main focus for the company reached through retail websites that enable million of products to be sold to all customers as well as attracting more customers through online advertisements. The websites can be reached directly by the customers, or they may use their mobile applications. Amazon Prime that the firm offers annually makes to easy to transport some of the products to customers who are in overseas countries at a lower cost. The prices have undergone discrimination so as to ensure that each group of customers has products that they can comfortable purchase. A range of programs has been established aimed at enabling sellers to market their products. Groups that largely enjoy our services include enterprises and developers who use the company’s already established technology. By December 2013, the company had a total of 117,300 both full-time and part-time employees. The employment terms are bound to change depending on the seasons of the business in general with a reduction in the number of new employees being witnessed in low economic times. Information about the business can be found can be obtained on the firm’s website where the information is readily available to all its users. Information includes the company’s financial reports and monthly journals. The company has nine top executive directors who are fully in charge of its operations. The highly ranked official is Jeffrey P. Bezos, who is currently serving as the Chief Executive officer, the President and the Chairman of the Board of Directors. A 50-year-old man has been at the helm of the organization since its establishment in the year 1994. In addition, the Board of Directors comprises nine people who occupy different departments. Corporate financial strategies The primary source of incomes for the company is from sales its products to its customers who buy directly on the website of those who apply for the products and wait for the company to make its deliveries to them. The products range from merchandise as well as contents that have been purchased by the company for further resale. Other services that generate revenue for the company include digital content subscriptions, advertising, publishing among others. The financial focus of the company is based on long-term and sustainable growth in free cash flow per share. In order for the business to increase its sales revenue, it has taken initiatives aimed at reduction of prices, increased availability of its products, widening the customer base, product differentiation, faster delivery, increased reliability so as to earn the trust of the customers. These factors will require a lot of funds in order to be fully operational. Increasing the number of its shareholders will offer another source of funding for the firm. The issuance of shares is meant to address the firms financing strategically, possible mergers, as well as acquisitions. The firm further aims at reducing its variable cost per unit and to focus on leveraging its fixed costs. The variable costs include transaction costs, packaging, transportation, shipment, customer service initiatives and marketing costs. Fixed costs, on the other hand, include the costs needed to run the technological appliances as well as creating and maintaining the web sites. One of the strategies that the firms seeks to adapt in order to lower its variable cost per unit is to increasing direct sourcing, increasing the amounts of discount that the firms enjoys form its suppliers and by reducing wastages that accrue to the firm. Fixed costs can be minimized by making improvement on the efficiency of operations as well as maintenance of a very lean culture that is accountable to all its activities. The firm in a position to rapidly turn its inventories into cash owing to the fact that it has a well-established business model. In the long-run, it is able to meet all its short-term financial obligations as they fall due. However, inventory turnover is expected to vary considerably based on several factors such product mix, availability of in-stock inventory and investment in new product lines. Variability is further expected in the accounts payable days due to changes in the mix of product sales, mix of supplies, seasonality, mix of the suppliers and changes in the terms of payment over time. The financial data is done under the United States dollar which means that fluctuations of the dollar will greatly affect the final outcome of the financial position of the company. Long-term solution for these fluctuations is by the company widening its market base by expanding internationally to avoid depending entirely on the dollar but on other currencies such as the sterling pound which is much stronger than the dollar. Conclusion The effectivity of any business is largely determined by its current financial position based on its ability to cater for its short-term financial commitments as well as long-term ones as they arise. From the financial statements, it is evident that the firm is capable of meeting its financial duties to its suppliers and other needs. The well-organized leadership structure in which every department is under a given leader offers a strong position for the continuity of the organization. Read More