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Project 3 - Risk management strategy.docx - RUNNING HEAD:...

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RUNNING HEAD: RISK MANAGEMENT STRATEGY FOR AMAZONRISK MANAGEMENT STRATEGY FOR AMAZONNameFebruary 10, 2019
2RISK MANAGEMENT STRATEGY FOR AMAZONExecutive SummaryAmazon began as an online book store in 1994. It was the brain child of Jeff Bezos. Hismotto was to “get big fast”. Jeff Bezos realized the untapped potential of the internet when herealized that the growth rate of the internet was 2300% [Gre18] and determined that books wouldsell really well online. Amazon’s headquarters are located in Seattle, Washington, USA [Jay13].Amazon also recently announced the location of their new headquarters when they chose NewYork City and Crystal City in Northern Virginia. Amazon will invest $5 Billion in these new sitesand will create 50,000 new jobs [You18].The company’s earliest days were spent in a garage. Investors were skeptical aboutAmazon and thought it was just a dot com fad which would eventually go bust. They were wrongand now Amazon is a giant and that too in not just one industry. Rather they sell any productimaginable and provide a variety of services [DeP18].Amazon went public in 1997 where they raised $54 million giving the company a marketvalue of $438 million [Wil17]. In 1998, Amazon went beyond just selling books to selling musicCDs and then later also added toys, electronics and tools. Amazon released the Kindle e-reader in2007 and the Kindle Fire in 2011. Amazon launched a cloud computing service in 2006, a studioin 2010, and in 2013 launched an online marketplace for art. Amazon has also acquired variouscompanies over the years such as Zappos, Twitch.tv, IMDB.com, Alexa.com, Audible.com,Annapurna labs, AbeBooks, Goodreads, Kiva Systems (now called Amazon Robotics), WholeFoods Market, Ring and many more [Tar18].Jeff Bezos has divided the business into three sectors, marketplace, prime and Amazonweb services (AWS). He calls them the three pillars of the business [Eug17]. It is true that
3RISK MANAGEMENT STRATEGY FOR AMAZONAmazon started off as a book selling website but soon it had spread out into other areas such aslogistics, consumer technology, cloud computing, media, entertainment and more and soon it wasworth a trillion dollars [Gre18].Amazon has one obsession and that is customers. The company is obsessed withcustomers and satisfying their needs and wants. Therefore, Amazon has experimented with newproducts, services, or anything that they feel might be of utility to customers. For Amazon, theironline store is the core of their business. This stable core lays out a great foundation for otherbusinesses and gives Amazon the freedom to experiment such as Amazon advertising services,Amazon prime, and Amazon web services (AWS) which are much more profitable than theonline store [Gen]. Amazon’s advertising business is a powerhouse and only one of the fewwhich even comes close to competing against Google and Facebook. As of the first months in2018, their advertising business earned $6 Billion. With a solid infrastructure and such adiversity of offers by Amazon, more companies are willing to pay for their advertising services

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