Business Development and Planning of Amazon

Explore the business development and planning of Amazon with Desklib. Learn about the entrepreneurial ecosystem, strategic enterprise management, new venture creation, IPR and ways of exploitation, pricing structures, crowd funding and VC investment, networking and customer relations, calculation of tax and VAT, cashflow, bookkeeping and personal survival planning.

Business Development and
Planning of Amazon
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The Entrepreneurial Ecosystem
• Amazon is a multinational company that emphasizes on the use of e-commerce, cloud
computing and Artificial Intelligence (AI)
• The Business Model Canvas of Amazon is based on Three Customer Value Propositions
• The business model helps in sharing profits among the shareholders (Ritala, Golnam and
Wegmann 2014)
• A major proportion of profits is share by Amazon to the Fulfilment Centers and delivery
network

Strategic Enterprise Management
• Customer segmentation plays a major role in dividing the customer base into
certain groups of individuals
• The needs of customers are identified based on segmenting them into three
categories – Interest-based, Demographic and Engagement-based
• Amazon makes use of Pinpoint software to understand customer needs
• Amazon also adapts best practices for overcoming customer problems

Strategic Enterprise Management
(Fig 1: Long-term Growth of Amazon)
(Source: Ritala, Golnam and Wegmann 2014)

New Venture Creation
• Different services at Amazon include – Amazon Prime, Amazon Web Services and
Marketplace
• The organisational structure consists of two CEOs, one Worldwide Controller and
Senior Vice Presidents
• Amazon is also bound by various legal structures that follow the Federal Trade
Commission

Entrepreneurial Finance and Management of Risks
• The products listed in Amazon follow the rights of intellectual property
• Use of IP within Amazon business helps in protection of rights based on
infringement (Shuen 2018)
• Legal requirements based on claiming of insurance is applied securing their
position in global market
• They follow certain business permits and licenses based on certain documents

IPR and Ways of Exploitation
• Amazon primarily invests within their marketing strategies to innovate services and
enhancing customer experience
• Digital marketing is majorly used for generating data reports
• The Amazon Virtual Private Cloud enables the launch of various resources of AWS
within a virtual network
• The selling of products within the marketplace would need investment from the business

IPR and Ways of Exploitation
(Fig 2: Graph of Amazon Gross Shipping Costs)
(Source: Cao 2014)

Pricing Structures, Crowd Funding and VC Investment
• Amazon strictly adheres to Terms and Conditions within marketing for acceptance
of goods and products
• Contracts play a major role as they provide legal document stating the expectations
of indulged parties
• Different kinds of contracts include non-compete agreements, expert insight,
limitation of obligations and fixed resource cost

Networking and Customer Relations
• Amazon employs a complex algorithm based on cutting of price margins
• Amazon also follows a highly competitive structure based on pricing. This helps in
enhancing the decision of the customer
• Amazon understands the current market value and thus takes proper steps for
developing of strategies (Taran, Boer and Lindgren 2015)
• Funding streams helps in the extension of credit with the present suppliers

Calculation of Tax and VAT
• Amazon supports different charged taxes such as income, sales and capital gains
• Importance of VAT within Amazon business helps in gaining of product
information, review and approving of filings
• Business insurance helps in protecting the assets against accidental damage, theft
and breakdown of services

Cashflow, Bookkeeping and Personal Survival Planning
• Amazon supports Cashflow forecasting based on operations, investment and financial
activities
• The practice of bookkeeping helps in deciding of strength within the business.
• Activity of bookkeeping helps in classification, reporting and analysing of data collected
(Cao 2014)
• Personal Survival Planning assists in deciding of strategies for Amazon based on
financial stability

References
Cao, L., 2014. Business model transformation in moving to a cross-
channel retail strategy: A case study. International Journal of
Electronic Commerce, 18(4), pp.69-96.
Ritala, P., Golnam, A. and Wegmann, A., 2014. Coopetition-based
business models: The case of Amazon. com. Industrial Marketing
Management, 43(2), pp.236-249.
Shuen, A., 2018. Web 2.0: A Strategy Guide: Business thinking and
strategies behind successful Web 2.0 implementations. O'Reilly Media.
Taran, Y., Boer, H. and Lindgren, P., 2015. A business model innovation
typology. Decision Sciences, 46(2), pp.301-331.

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