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Understanding AMAZON.COM: The world's most disruptive company

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Since going public twenty years ago today, Amazon has gone from a start-up online bookseller to the 4th most valuable company on the planet revolutionising and disrupting multiple industries, including retail, publishing, logistics, devices, apparel, search, payments, content and cloud computing. Now, Amazon is on it’s way to become the first Trillion dollar valued company. In this presentation we review AMAZON's Leadership, Culture, Strategy, Performance, Marketplace, Prime, Studios, Alexa & AWS. There 16 predictions that help get AMAZON to $300B Revenue & $50B EBITDA to become the world's first Trillion Dollar Valued Company. John Batistich is the Author/Curator and can be contacted on Linked In

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Understanding AMAZON.COM: The world's most disruptive company

  1. 1. Understanding The first trillion dollar company @johnbatistich UNDERSTANDING THE WORLD’S MOST DISRUPTIVE COMPANY @johnbatistich Photo Source: Google Images
  2. 2. For a company who limits Powerpoint in favour of narrative memos, I am going to share lots of slides to understand Amazon and predict the future!
  4. 4. “Since going public twenty years ago, Amazon has gone from a start-up online bookseller to the world’s 4th most valuable company, revolutionising and disrupting multiple industries, including retail, publishing, logistics, devices, apparel, search, payments, content and cloud computing. Now, Amazon is on it’s way to become the first Trillion dollar valued company.”
  5. 5. LEADERSHIP & CULTURE 1 @johnbatistich
  6. 6. LeadershipStrategyPerformanceMarketplacePrimeAlexaStudiosAWSPredictions$1B
  7. 7. § 1964: Born in New Mexico. Moved to Miami for high school. § Raised by Mum and Engineer stepfather. Has 2 siblings. § Early interest in computers, science and invention. § 1982: Graduates as high school valedictorian. § 1986: Completes Bachelor Science in computer science and electrical engineering at Princeton. § 1990: Works at hedge fund DE Shaw in New York. § 1993: Married to novelist MacKenzie. Four children. § 1994: Quits job to launch digital business “the everything store” backed by $300K capital borrowed from parents. Chooses to focus on books delivering low prices and “infinite shelf space”. § 1995: Launches with sales reaching $20K per week within 2 months. Raises capital to fund growth. § 1997: IPO in May at $18 per share creating $290 Million of personal wealth. Vows to focus on customer and invest for the long term. § Early investor in Google. His stake is worth $280 Million when the company goes public. § 2000: Offers free shipping. Starts privately funded space venture Blue Origin to pursue his passion for space travel. § 2005: Launches Amazon Prime membership on intuition & AWS takes off. § 2007: Releases Kindle e-reader. § 201O: Launches Amazon Studios. § 2013: Promises 30 minute delivery with drones. Privately funds purchase of Washington Post for $250M. § 2015: Releases Alexa & Payment. Awarded Golden Globe. § 2017: Net worth +$80 Billion. 2nd wealthiest person.Photo Source: Google Images LeadershipStrategyPerformanceMarketplacePrimeAlexaStudiosAWSPredictions$1B
  8. 8. THE TRILLION DOLLAR START-UP “Over the last two decades, we’ve collected a large group of like-minded people. Folks who find our approach energising and meaningful….customer obsession rather than competitor obsession, eagerness to invent and pioneer, willingness to fail, the patience to think long-term and the taking of professional pride in operational excellence.” LeadershipStrategyPerformanceMarketplacePrimeAlexaStudiosAWSPredictions$1B
  9. 9. JeffreyBlackman SVP, Business Development Andrew Jassy CEO AWS Brian Olasavsky SVP & CFO JeffreyWilke CEO Worldwide Consumer David Zapolsky SVP, General Counsel & Secretary LEADERSHIP: KEY EXECUTIVE OFFICERS Shelley Reynolds VC, Worldwide Controller,& Principal Accounting Officer Diego Piacentini SVP International Jeff Bezos President, CEO & Chairman of the Board Experienced and innovative leadership team around a omnipresent CEO that drives strategy and culture. LeadershipStrategyPerformanceMarketplacePrimeAlexaStudiosAWSPredictions$1B
  10. 10. Photo Source: Google Images LeadershipStrategyPerformanceMarketplacePrimeAlexaStudiosAWSPredictions$1B
  11. 11. 14 LEADERSHIP PRINCIPLES Source: 1. Customer Obsession Leaders start with the customer and work backwards. They work vigorously to earn and keep customer trust. Although leaders pay attention to competitors, they obsess over customers. 2. Ownership Leaders are owners. They think long term and don’t sacrifice long-term value for short term results. They act on behalf of the entire company, beyond just their own team. They never say “that’s not my job." 3. Invent and Simplify Leaders expect and require innovation and invention from their teams and always find ways to simplify. They are externally aware, look for new ideas from everywhere, and are not limited by “not invented here." As we do new things, we accept that we may be misunderstood for long periods of time. 4. Are Right, A Lot. Leaders are right a lot. They have strong business judgment and good instincts. 5. Hire and Develop the Best Leaders raise the performance bar with every hire and promotion. They recognize exceptional talent, and willingly move them throughout the organization. Leaders develop leaders and take seriously their role in coaching others. 6. Insist on the Highest Standards Leaders have relentlessly high standards - many people may think these standards are unreasonably high. Leaders are continually raising the bar and driving their teams to deliver high quality products, services and processes. Leaders ensure that defects do not get sent down the line and that problems are fixed so they stay fixed. 7. Think Big Thinking small is a self-fulfilling prophecy. Leaders create and communicate a bold direction that inspires results. They think differently and look around corners for ways to serve customers. 8. Bias for Action. Speed matters in business. Many decisions and actions are reversible and do not need extensive study. We value calculated risk taking. 9. Frugality We try not to spend money on things that don’t matter to customers. Frugality breeds resourcefulness, self-sufficiency, and invention. There are no extra points for headcount, budget size, or fixed expense. 10. Vocally Self Critical Leaders do not believe their or their team’s body odor smells of perfume. Leaders come forward with problems or information, even when doing so is awkward or embarrassing. Leaders benchmark themselves and their teams against the best. 11. Earn Trust of Others Leaders are sincerely open-minded, genuinely listen, and are willing to examine their strongest convictions with humility. 12. Dive Deep Leaders operate at all levels, stay connected to the details, and audit frequently. No task is beneath them. Have Backbone; 13. Disagree and Commit Leaders are obligated to respectfully challenge decisions when they disagree, even when doing so is uncomfortable or exhausting. Leaders have conviction and are tenacious. They do not compromise for the sake of social cohesion. Once a decision is determined, they commit wholly. 14. Deliver Results Leaders focus on the key inputs for their business and deliver them with the right quality and in a timely fashion. Despite setbacks, they rise to the occasion and never settle LeadershipStrategyPerformanceMarketplacePrimeAlexaStudiosAWSPredictions$1B
  12. 12. WORK HARD, HAVE FUN AND MAKE HISTORY CULTURE Source: Glassdoor. eMarketer. “We're a company of pioneers. It's our job to make bold bets, and we get our energy from inventing on behalf of customers. Success is measured against the possible, not the probable. For today’s pioneers, that’s exactly why there’s no place on Earth they’d rather build than Amazon.” “We are made up of small teams with single threaded owners, enabling rapid innovation.” “Our Leadership Principles aren’t just a pretty inspirational wall hanging. These Principles work hard, just like we do. Amazonians use them, every day, whether they’re discussing ideas for new projects, deciding on the best solution for a customer’s problem, or interviewing candidates. It’s just one of the things that makes Amazon peculiar.” For 341K employees, Amazon is demanding, intense and innovative. Changing the world is not for everyone! Amazon, at its worse, can be overwhelming, intense and stressful forcing people to leave to create balance. + - 88 117 154 231 341 Employees 2012-16 (000s) 2012 2013 2014 2015 2016 LeadershipStrategyPerformanceMarketplacePrimeAlexaStudiosAWSPredictions$1B
  13. 13. JeffreyBlackman SVP Business Development & Entertainment Andrew Jassy CEO AWS JeffreyWilke CEO Worldwide Consumer SUCCESSION PLAN Amazon has a secret succession plan. Future options to try & fill Jeff’s enormous shoes include 2X Jeff, Andrew & David. The Analyst Started 1999. Princeton & MIT MBA. Considered irreplaceable. Leads the entire consumer business globally. Previously led the core e- commerce business in North America and has also led operations and customer service. The Driver Started 1997. Harvard MBA. High-profile role leading the successful & profitable AWS. AWS is among Bezos’s top interests & proudest achievements. The Developer Started 1998. Stanford MBA. Part of Bezos’s inner circle of trusted advisers. Leads business development, which encompasses a lot of things, including acquisitions. He has led product development and operations. The Creator Started 2010. Leads the hardware business at Amazon, overseeing the development of everything from the Kindle to the Fire phone to the Amazon Echo device. Bezos loves Amazon’s device business. Source: Recode David Limp SVP Products & Services LeadershipStrategyPerformanceMarketplacePrimeAlexaStudiosAWSPredictions$1B
  14. 14. STRATEGY 2 @johnbatistich
  15. 15. Source: Amazon Annual Reports “Our mission is to be the Earth’s most customer-centric company, where customers can find and discover anything they might want to buy online, and endeavors to offer its customers the lowest possible prices.” This goal continues today, but Amazon’s customers are worldwide now, and have grown to include millions of Consumers, Sellers, Content Creators, and Developers & Enterprises. Each of these groups has different needs, and we always work to meet those needs, innovating new solutions to make things easier, faster, better, and more cost-effective.” LeadershipStrategyPerformanceMarketplacePrimeAlexaStudiosAWSPredictions$1B
  16. 16. GUIDING DIRECTION Source: Amazon Annual Report The first letter to Shareholders twenty years ago serves as a guiding reminder of Amazon’s purpose to innovate, obsess about customers and deliver long term value. LeadershipStrategyPerformanceMarketplacePrimeAlexaStudiosAWSPredictions$1B
  17. 17. AMAZON’S BUSINESS MODEL Key Partners Key Activities Value Proposition Customer Relationships Customer Segments § Suppliers and manufacturers § Network of sellers § Publishers § Logistic partners § Affiliates § Writers & Video Production § Hardware producers § Engineering § User design § Production § Merchandising § Business development § Content creation § Cloud computing § Lowest price §Widest range §Convenience §Seamless payment §Fast fulfilment §Compelling relevant content (video, music & books) § Direct digital relationships § Self service § Automated service § Personalised § Prime membership § Marketplace, Prime and AWS § Mass Market § Members § North America & International § Enterprise & Government for AWS Key Resources Distribution Channels § Human web application & development § Technology infrastructure that supports channels § Physical warehouses § Distribution assets § Intellectual property § § Mobile apps § Affiliates § Kindle § Streaming services § Alexa/echo/dash Cost Structure Revenue Streams § IT infrastructure § Technology and content § Fulfilment § Marketing § Cost of Goods and Headcount § Capital (machinery/equipment) & leases § Commission on retailer Sales § Marketplace advertising § Prime monthly subscription fees § Streaming or download fees for Studios & e-Books § Fees for cloud computing services § Acquisition and investments An evolving, adaptive, innovativebusiness model that reinvests all profits into innovation for long term value. LeadershipStrategyPerformanceMarketplacePrimeAlexaStudiosAWSPredictions$1B
  18. 18. STRATEGIC PRIORITIES 1. Expand Marketplace Expand our primary source of revenue (Marketplace for a wide range of products and services to customers) focusing on North America, UK and Germany whilst expanding into attractive new global markets prioritising India. Turn inventory quickly to enable a strong cash-generating operating cycle. 2. Develop Key Platforms Develop the Marketplace, Prime and Amazon Web Services platforms, focusing on long term, sustainable growth in free cash flow. Develop a fourth new platform driving Alexa, nurturing Studios, experimenting with Fresh and Go and extending Payments. 3. Improve Customer Experience Invest in technology and content, including AWS, and the expansion of new and existing product categories and services offerings,as well as in technology infrastructureto enhance the customer experience and improve process efficiencies. 4. Reinvest Efficiencies Leverage our scale to reduce our variable cost per unit & leverage fixed costs to reinvest in innovation. 5. Develop Innovation Culture Continueto develop an innovative, customer obsessed, frugal and learning culture strengthening our data, business development, engineering, user design and merchandising capabilities to support expansion. STRATEGIC PRIORITIES Amazon has 5 key strategic choices supporting 3 existing platforms and the developing new platforms, products & markets. LeadershipStrategyPerformanceMarketplacePrimeAlexaStudiosAWSPredictions$1B
  19. 19. CORE INNOVATIONS Amazon leverages core capabilities to deliver wider ranges, cheaper prices, more convenience and faster delivery. Core Capabilities Product Management User Design Software Engineering Logistics Execution Data Science, Machine Learning & AI Strategic Partnerships Innovation Platforms Better Cheaper Cloud Computing Personalised Content Fast Fulfilment Life Admin Extreme Convenience LeadershipStrategyPerformanceMarketplacePrimeAlexaStudiosAWSPredictions$1B
  20. 20. Source: Venture Scanner ACQUISITIONS Data Software Books Technology Education Technology Retail Technology Display Technology Finance Technology Video Technology GamingArtificial Intelligence IoT Cloud Venture Scanner has identified Amazon’s key acquisitions across key capabilities to support Strategy. LeadershipStrategyPerformanceMarketplacePrimeAlexaStudiosAWSPredictions$1B
  21. 21. Acquiring ($800M) to enter Middle East (6 Gulf Arab states & Egypt) mid 2017s Expand organically into Australia with local fulfilment late 2017 Investing $5B in India to challenge Flipcart for marketplace leadership 14 local sites in key markets. Offer 10M products delivered to 75 countries LeadershipStrategyPerformanceMarketplacePrimeAlexaStudiosAWSPredictions$1B
  22. 22. BEING EVERYONE’S ENEMY IS EXHAUSTING Amazon is disrupting the world’s largest incumbents. LeadershipStrategyPerformanceMarketplacePrimeAlexaStudiosAWSPredictions$1B
  23. 23. PERFORMANCE 3 @johnbatistich
  24. 24. “Marketplace, Prime and Amazon Web Services are three big ideas. We’re lucky to have them, and we’re determined to improve and nurture them – make them better for customers. You can count on us to work hard to find a fourth. We’ve already got a number of candidates in work, and as we promised some twenty years ago, we’ll continue to make bold bets. With the opportunities unfolding in front of us to serve customers better through innovation, we assure you we won’t stop trying.” Photo Source: Google Images LeadershipStrategyPerformanceMarketplacePrimeAlexaStudiosAWSPredictions$1B
  25. 25. “Never before has a company been worth so much for so long while making so little money: 92% of its value is due to profits expected after 2020. Amazon has an unusual approach to time (resolute focus on distant horizon) and the sheer breadth of its activities.” LeadershipStrategyPerformanceMarketplacePrimeAlexaStudiosAWSPredictions$1B
  26. 26. 14.8 19.2 24.5 34.2 48.1 61.1 74.5 89 107 136 165 199 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017F 2018F Net Sales $Billions 2007 - 2018F REVENUE GROWTH Source: Amazon Company Reports △27% △20% △19% △21% △21% Consistent sustained revenue growth of ~20% generating $136Bin 2016 across 300 customers. LeadershipStrategyPerformanceMarketplacePrimeAlexaStudiosAWSPredictions$1B
  27. 27. 54.2 62.8 71.6 88.3 8.6 10.8 13.4 17.6 3.1 4.3 5.3 7.2 6.6 9.3 12.5 16.1 2013 2014 2015 2016 Cost of Sales Fulfilment Marketing Technology/Content General/Admin Other Operating Expenses $ Billions 2013 - 2016 OPERATING EXPENSES Source: Amazon Company Reports Mix △11.8% △5.3% △13% ▽64.9% Strong focus on reducing Cost of Sales to offset Fulfilment and Technology investments that are growing faster than revenue. LeadershipStrategyPerformanceMarketplacePrimeAlexaStudiosAWSPredictions$1B
  28. 28. PROFITABILITY Source: Amazon Company Reports 0.48 0.65 0.9 1.2 0.6 0 0.3 -0.02 0.6 2.4 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Net Income $Billions 2007 - 2016 0.7 0.97 1.2 1.5 1 0.64 0.65 0.1 2 4.4 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 EBITDA $Billions 2007 - 2016 Despite growing revenue and scale, Amazon’s Net Income and EBITDA remain low and below peers as they reinvest in growth. LeadershipStrategyPerformanceMarketplacePrimeAlexaStudiosAWSPredictions$1B
  29. 29. 50.8 63.7 79.8 33.5 35.4 44 4.6 7.9 12.2 2014 2015 2016 Net Sales by Segment ($B) Net Income by Segment ($M) North America 59% FINANCIAL PERFORMANCE Source: Amazon Company Reports International 32% AWS 9% 360 1425 2361 -640 -699 -1283 458 1507 3108 2014 2015 2016 North America International AWS International is expected to grow faster than North America requiring significant investment levels whilst AWS is the most profitable platform generating +25% Net Income Margins. LeadershipStrategyPerformanceMarketplacePrimeAlexaStudiosAWSPredictions$1B
  30. 30. BALANCE SHEET Source: Amazon Company Reports Liabilities are growing faster than Assets. $26BCash on the Balance Sheet but high levels of Payables. Current ratio is 1.04. 18.8 25.3 32.6 40.2 54.5 64.8 83.4 11.9 17.5 24.4 30.4 43.8 51.4 64.1 6.9 7.8 8.2 9.7 10.7 13.4 19.3 2010 2011 2012 2013 2014 2015 2016 Assets Liabilities Shareholders Equity Assets, Liabilities & Equity $ Billions 2010 - 2016 Cash/ST Investments 26 Receivables 8.3 Inventories 11.5 Land 14 Machinery 26 Payables 25.3 Accrued Expenses 13.7 Deferred Revenue 4.8 Lease Obligations 7.5 LeadershipStrategyPerformanceMarketplacePrimeAlexaStudiosAWSPredictions$1B
  31. 31. MARKETPLACE WORKING CAPITAL Source: Data from Amazon Company Reports Amazon’s working capital is strong, driven by long payment terms, with the position improving over the last 3 years. Inventory Turnover 48.3 Receivable Turnover 24.3 Payable Turnover 95.7 2014 Inventory Turnover 52.2 Receivable Turnover 20.8 Payable Turnover 103.9 2015 Inventory Turnover 47.4 Receivable Turnover 24.6 Payable Turnover 104.6 2016 23.1 days 30.9 days 32.9 days In 2016 Amazon turned inventory every 47 days, received payment in 25 days and paid for inventory in 105 days creating a positive funding gap so no cash or financing facilities were required to fund sales/collection and payment. Average Inventory, Receivable and Payables Turnover Average Days 2014 - 2016 LeadershipStrategyPerformanceMarketplacePrimeAlexaStudiosAWSPredictions$1B
  32. 32. Market Capitalisation ($B) 31 December 1997 – 15 May 2017 COMPANY VALUE Source: NASDAQ $182 $144 $323 $459 Amazon’s share price has significantly outperformed all retailers on the S&P over the last decade. Share Price ($) May 1997 – 15 May 2017 LeadershipStrategyPerformanceMarketplacePrimeAlexaStudiosAWSPredictions$1B
  33. 33. “Amazon has access to the cheapest capital in the history of modern business and built a fulfilment network where they can get almost everything you need. They have replaced profits with vision and growth” Scott Gallaway Professor NYU & Founder L2 Inc Photo Source: Google Images. LeadershipStrategyPerformanceMarketplacePrimeAlexaStudiosAWSPredictions$1B
  34. 34. S&P 500 Companies with Above Average Revenue Growth Past 5 Years 56% 50% 37% 32% 30% 26% 25% 25% 22% 21% 19% 18% 18% Source: L2 Inc. S&P Global Market Intelligence, USA Today Research. Technology B2B Technology Algorithm Outsourcing Health FASTEST GROWING COMPANIES Amazon has been one of the top performing stocks over the last 5 years. LeadershipStrategyPerformanceMarketplacePrimeAlexaStudiosAWSPredictions$1B
  35. 35. Source: L2 Inc. SEC Filings and Company Announcements 2016 Revenue vs Net Income ($Millions) 136000 90300 27600 5500 532 4042400 19500 10200 -3000 14 -515 VISION & GROWTH OVER PROFITABILITY Whilst Google & Facebook have generated Revenue Growth and strong Profitability,Amazon is leading a new wave of high growth companies who reinvest everything to establish leadership at all cost. LeadershipStrategyPerformanceMarketplacePrimeAlexaStudiosAWSPredictions$1B The market will buy Amazon’s vision as along as they maintain their incredible growth performance. If growth slows, the market will expect profitability and a return on their capital…and then the game changes.
  36. 36. “It’s hard competing with someone that does not want to make money.” Mickey Drexler CEO J Crew Photo Source: Google Images LeadershipStrategyPerformanceMarketplacePrimeAlexaStudiosAWSPredictions$1B
  37. 37. GROWTH OVER PROFITABILITY Source: Amazon & WalMart Company Reports 1.2 0.6 0 0.3 0.6 2.4 14.9 17 16.4 17.8 16.7 17.1 15.1 2010 2011 2012 2013 2014 2015 2016 Net Income $Billions 2010 - 2016 Amazon plays by different rules vs incumbents like Walmart with investors valuing growth over profitability. LeadershipStrategyPerformanceMarketplacePrimeAlexaStudiosAWSPredictions$1B
  38. 38. MARKET CAPITALISATION COMPARISONS 228 75 27 29.5 17.2 14.6 15.7 $459 Leading US & European Retailers Source: Yahoo Finance Market Capitalisation 15 May 2017 US$ Billions Amazon’s market capitalisation exceeds the world’s largest Discounters, Supermarkets and Department Stores combined. LeadershipStrategyPerformanceMarketplacePrimeAlexaStudiosAWSPredictions$1B
  39. 39. RISK FACTORS Intense competition. Expansion places significant strain on Management, Operational, Financial and Other Resources. Expansion into new products, services, technologies and geographic regions subjects us to additional business, legal financial and competitive risks. Significant fluctuations in our operating results, growth rate and stock price. Not successfully optimise and operate our fulfilment network and data centres. Unsuccessful making, integrating, and maintaining commercial agreements, strategic alliances and other business relationships. Unsuccessful making, integrating, and maintaining acquisitions and investments. Foreign exchange. Loss of key senior management personnel. Data loss or other security breaches. System interruption and lack of redundancy. Significant inventory risk. Not adequately protect our intellectual property rights or infringe other’s rights. Unfavourable changes to Government regulations. Additional tax liabilities. Payment risks, product liability claims and unlawful activities by sellers. Source: Amazon Annual Report The larger and more disruptive you get, the more critical attention you attract! LeadershipStrategyPerformanceMarketplacePrimeAlexaStudiosAWSPredictions$1B
  40. 40. MARKETPLACE 4 @johnbatistich
  41. 41. “Anything, anytime anywhere. Marketplace creates opportunities to reach buyers around the world in 189 countries across 44 currencies.” Photo Source: Google Images LeadershipStrategyPerformanceMarketplacePrimeAlexaStudiosAWSPredictions$1B
  42. 42. Sam Walton (Wealthiest man of the 20th century) Mastered the art of minimum wage employees selling you stuff in warehouse stores. Jeff Bezos (Wealthiest man of the 21st century) Mastering the science and algorithms of robots to get stuff you want fast before you need it. RETAIL’S TECTONIC SHIFT Photo Source: Google Images. Quote Source: Adapted from Scott Galloway L2 Inc. 2016. Scott Galloway (L2 Inc.) has defined the shift in Retail by contrasting Sam Walton & Jeff Bezos. LeadershipStrategyPerformanceMarketplacePrimeAlexaStudiosAWSPredictions$1B
  43. 43. $894 $1,088 $1,233 $1,471 $1,548 $1,915 $48 $61 $74 $89 $107 $136 2011 2012 2013 2014 2015 2016 Source: eMarketer. USA TODAY. Global E-commerce & Amazon Sales($B) 7% Share Amazon sees massive opportunity to grow global share of a rapidly growing e-commerce market “Many companies describe themselves as customer focused, but few walk the talk. Most big companies are competitor focused. They see what others are doing, and then work to fast follow.” AMAZON’S ONLINE OPPORTUNITY LeadershipStrategyPerformanceMarketplacePrimeAlexaStudiosAWSPredictions$1B
  44. 44. AMAZON MARKETPLACE’S FLYWHEEL Lower Cost Structure Lower Prices Selection & Convenience Customer Experience Traffic Sellers Growth The marketplace platform has been fuelled by widest range, lowest prices and best convenience and is increasingly supported by Prime membership which provides free fast Fulfilment,streamed Content (Video/Music) & Alexa services. Prime Membership Free Fast Fulfilment Video/Music Alexa Services LeadershipStrategyPerformanceMarketplacePrimeAlexaStudiosAWSPredictions$1B
  45. 45. AMAZON MARKETPLACE BREAKTHROUGH INNOVATIONS Biggest Range Cheapest Pricing One-Click Purchase Innovation Personalised Recommendations Prime Membership Product Reviews Free Delivery. Free Returns Amazon pioneered key e-commerce innovations that are the aspiration of their competitors. LeadershipStrategyPerformanceMarketplacePrimeAlexaStudiosAWSPredictions$1B
  46. 46. Source: L2 Inc. Scott Galloway DLD 2017. AMAZON LEADS PERSONALISATION L2 Inc. have shared different onlineexperiences based upon your previous search or purchases informed by Amazon’s behavioural targeting algorithms delivering higher conversion and order value. LeadershipStrategyPerformanceMarketplacePrimeAlexaStudiosAWSPredictions$1B
  47. 47. 5% 6% 7% 18% 27% 38% 45% 2010 2011 2012 2013 2014 2015 2016 Source: L2 from Piper Jaffray, MWPL. Facebook. Twitter. US Census Bureau. US Population living within 20 Miles of Fulfilment Centre Amazon’s US Fulfilment Network FULFILMENT INFRASTRUCTURE ENABLES FASTER DELIVERY. Without a store network, Amazon has invested in Fulfilment centres to serve attractive markets faster & cheaper. LeadershipStrategyPerformanceMarketplacePrimeAlexaStudiosAWSPredictions$1B
  48. 48. “They has mastered the chaos of storing tens of millions of products and figuring out how to get them to people, on time, without fail, and no one has come even close. And everywhere it kills jobs.” Brad Stone Author The Everything Store Image Source: Geek Wire LeadershipStrategyPerformanceMarketplacePrimeAlexaStudiosAWSPredictions$1B
  49. 49. Photo Source: Google Images Invested $17.6 Billion in faster cheaper fulfilment in 2016 (13% of Sales) LeadershipStrategyPerformanceMarketplacePrimeAlexaStudiosAWSPredictions$1B
  50. 50. Amazon fulfilment innovation gets what you need fast. Photo Source: Google Images LeadershipStrategyPerformanceMarketplacePrimeAlexaStudiosAWSPredictions$1B
  51. 51. Amazon marketplace’s magical moment of truth Photo Source: Google Images LeadershipStrategyPerformanceMarketplacePrimeAlexaStudiosAWSPredictions$1B
  52. 52. Amazon is experimenting with limited Stores to showcase products Photo Source: Google Images LeadershipStrategyPerformanceMarketplacePrimeAlexaStudiosAWSPredictions$1B
  53. 53. Photo Source: Google Images Amazon Go reimagines Convenience LeadershipStrategyPerformanceMarketplacePrimeAlexaStudiosAWSPredictions$1B
  54. 54. Amazon Fresh Pick up reimagines Groceries Photo Source: Google Images LeadershipStrategyPerformanceMarketplacePrimeAlexaStudiosAWSPredictions$1B
  55. 55. AMAZON PRIVATE LABEL CHALLENGING BRANDS Amazon is disrupting Brands taking leadership share positions driven by search, order and price advantages. Amazon’s Expanding Owned Brands Categories Amazon’s Owned Brands Leading Category Shares Source: Mashable 2016 Batteries 31% 21% Diapers 47% 16% Speakers 45% 16% Health & Beauty Everyday Essentials Clothing Apparel LeadershipStrategyPerformanceMarketplacePrimeAlexaStudiosAWSPredictions$1B
  56. 56. Payments innovation like Cash & Pay are focused on improving the purchase experience on Amazon and beyond. Source: Amazon AMAZON & BEYOND PAYMENT INNNOVATIONS Click the Amazon Pay button on partner retailer sites to log in to your Amazon account. An easy & trusted way to pay anywhere online. Consumers without credit or in the cash economy can now upload cash at a partner retailer to create an Amazon balance. LeadershipStrategyPerformanceMarketplacePrimeAlexaStudiosAWSPredictions$1B
  57. 57. Source: Business Insider from Company Data. CONSEQUENCES OF AMAZON’S DISRUPTION Amazon is driving online and total retail growth and winning share at a time of significant store closures. 1000 552 250 240 171 170 160 138 120 110 108 88 70 70 68 60 60 42 30 Payless Radioshack The Limited Family Christian Wet Seal Bebe Crocs JCPenney BCBG Amercian Apparel Kmart HHGregg Staples CVS Macy's Abercrombie & Fitch Guess Sears Gander Mountain Store Closures US Retailers 2017 5% 43% 53% 24% Share of Total Retail Value Share of Online Retail Value Share of Online Retail Growth Share of Retail Growth Amazon Share Position US 2016 LeadershipStrategyPerformanceMarketplacePrimeAlexaStudiosAWSPredictions$1B
  58. 58. “Constitutionally oriented to securing every possible advantage for its customers, setting the lowest possible prices, taking advantage of every known tax loophole or creating new ones. They keep forcing your hand and yet they don’t have a viable business model. If they had to behave in a more conventional way (and pay tax) they would struggle.” Mark Constantine Co-Founder Lush Cosmetics LeadershipStrategyPerformanceMarketplacePrimeAlexaStudiosAWSPredictions$1B
  59. 59. Social, Video & Web Reach 31 March 2017 DIGITAL PRESENCE Source: eMarketer Amazon has grown massive social, video and web communities and reach. 7.9M Followers 34.6M Likes 207K Subscribers 411K Followers 1.72M Followers 2.2M Followers 463M Views 2.37B Website Visits LeadershipStrategyPerformanceMarketplacePrimeAlexaStudiosAWSPredictions$1B
  60. 60. Amazon is the leading place to start product discovery onlinechallenging Google’s dominance. 2016 Amazon, 55%Search Engines, 28% Brand or Retailer Site, 12% Other E- commerce Site, 4% Source: Activate Tech and Media Outlook 2017. L2 Inc. PRODUCT SEARCH STARTS ON AMAZON LeadershipStrategyPerformanceMarketplacePrimeAlexaStudiosAWSPredictions$1B
  61. 61. “The answer to the question ‘what worries me when I go to bed at night and wake up in the morning’ isn’t a three-month-old child — it’s Amazon.” Nobody in the online ad business has more data about the way we shop, how often we shop, and what items we look at and decide not to buy. Sir Martin Sorrell CEO WPP Photo Source: Google Images LeadershipStrategyPerformanceMarketplacePrimeAlexaStudiosAWSPredictions$1B
  62. 62. 34 15 2.5 1.3 0.4 Google Facebook Twitter Amazon Snap Advertising Revenues FY 2016 $B Source: Business Insider. L2. Snap Inc. Amazon Company Reports. North American Revenues FY 2016 $B Electronics & Other General Merchandise, $64.9 Media: Books, Music, Movies & Games, $13.6 Advertising Sales & Other, $1.3 AMAZON’S EMERGING AD BUSINESS An opportunity exists to grow advertising revenues through display and search. LeadershipStrategyPerformanceMarketplacePrimeAlexaStudiosAWSPredictions$1B
  63. 63. “Our scale and number of customers, number of clicks, number of eyeballs and new content – video content and other opportunities for advertising has really helped. It’s pretty early days with advertising but we’re very pleased with the team we have and the results. Our goal is to be helpful to consumers and enhance their shopping or their viewing experience with targeted recommendations.” Brian Olsavsky CFO Photo Source: Google Images LeadershipStrategyPerformanceMarketplacePrimeAlexaStudiosAWSPredictions$1B
  64. 64. 5 @johnbatistich
  65. 65. “We want Prime to be such good value, you’d be irresponsible not to be a member.” Photo Source: Google Images LeadershipStrategyPerformanceMarketplacePrimeAlexaStudiosAWSPredictions$1B
  66. 66. PRIME MEMBERSHIP OFFER Source: Prime offers free Fulfilment and Video, Music, Photos and Books services to drive conversion and retention. LeadershipStrategyPerformanceMarketplacePrimeAlexaStudiosAWSPredictions$1B
  67. 67. PRIME MEMBERSHIP OPTIONS Source: SMH. With 66M members, Prime creates value that competes against other Retailers, Netflix,Spotify, Pandora & Apple. Customers in the US who sign up at an annual cost of $US99, receive free, two-day shipping on items; unlimited access to Amazon Prime Video, similar to Netflix, with a library of movies and television shows; unlimited access to Prime Music, a music streaming service; the ability to borrow books from a Kindle lending library; and access to a restaurant meal delivery service in major cities. Amazon Prime members can also access Prime Now, offering free delivery within two hours in certain locations. For an extra $US14.99 a month you can get Amazon Fresh where you can order groceries from supermarkets in major areas and have them delivered within 2 hours. LeadershipStrategyPerformanceMarketplacePrimeAlexaStudiosAWSPredictions$1B
  68. 68. 2 5 12 25 40 53 66 2010 2011 2012 2013 2014 2015 2016 Members ($M) Revenue Per Customer $600 $1,100 $10,000 Non Member Prime Member Ambition PRIME MEMBERSHIP & VALUE Source: Business Insider. L2. Amazon Company Reports. Recode. Prime represented 66M members and ~$72B sales across 20% of consumers in 2016. It is a key growth platform towards Trillion Sales enabled by faster fulfilment and media/entertainment services. Drivers Faster fulfilment Better pricing Private Label Discounts Video/Music streaming Alexa LeadershipStrategyPerformanceMarketplacePrimeAlexaStudiosAWSPredictions$1B
  69. 69. Source: Amazon Company Reports One hour delivery on 25K items across 30 cities, launched in 111 days. Free same-day across 35 cities. Two-day delivery across over 30M items in US, UK & Germany. Sunday delivery added. LeadershipStrategyPerformanceMarketplacePrimeAlexaStudiosAWSPredictions$1B
  70. 70. Photo Sources: Google Images Access storage & books. Stream music & video Photo Source: Google Images LeadershipStrategyPerformanceMarketplacePrimeAlexaStudiosAWSPredictions$1B
  71. 71. Source: Seattle Times “The idea of making deliveries faster is in the DNA of the company. When I started writing the concept document for Prime Now, I wrote that I wanted it to feel like magic for a customer to get something right to their door in superfast speeds and we built from there—I assembled a great team and we worked hard to launch fast... The future is now. Customers are ready for it. ” Stephanie Landry VP Amazon Prime Now LeadershipStrategyPerformanceMarketplacePrimeAlexaStudiosAWSPredictions$1B
  72. 72. Photo Source: Google Images LeadershipStrategyPerformanceMarketplacePrimeAlexaStudiosAWSPredictions$1B
  73. 73. "When Amazon grows we grow” David Potts CEO Morrisons UK PRIME NOW: MORRISONS AT AMAZON Prime Now customers can order one-hour deliveries. Orders picked at local Morrisons store and delivered the same day by Amazon within one hour for £6.99 or in a two-hour slot for free. Photo Source: Google Images LeadershipStrategyPerformanceMarketplacePrimeAlexaStudiosAWSPredictions$1B
  74. 74. Photo Source: Google Images Warehouse in the skies supply delivery Drones New fulfilment technologies LeadershipStrategyPerformanceMarketplacePrimeAlexaStudiosAWSPredictions$1B
  75. 75. 6 @johnbatistich THE FOURTH PLATFORM
  76. 76. A new big bet (experiment), Amazon has 2 thousand people working over the last 4 years to create the Alexa platform & echo product. Photo Source: Google Images LeadershipStrategyPerformanceMarketplacePrimeAlexaStudiosAWSPredictions$1B
  77. 77. “Alexa is primarily about identifying tasks in the household that would be improved by voice. (For shopping) Alexa is good for reordering consumables, where you don’t have to make a lot of choices.” Photo Source: Google Images LeadershipStrategyPerformanceMarketplacePrimeAlexaStudiosAWSPredictions$1B
  78. 78. “Alexa, the voice service that powers Echo, provides capabilities, or skills, that enable customers to interact with devices in a more intuitive way using voice. Examples of these skills include the ability to play music, answer general questions, set an alarm or timer or order needs. Alexa is built in the cloud, so it is always getting smarter. The more customers use Alexa, the more she adapts to speech patterns, vocabulary, and personal preferences.” Photo Source: Google Images LeadershipStrategyPerformanceMarketplacePrimeAlexaStudiosAWSPredictions$1B
  79. 79. 2.4 5.2 10 2015 2016 2017E Echo Installed Households (M) INCREASING ECHO ADOPTION & SKILLS Skills Available 130 6068 10000 2015 2016 Feb-17 Source: Company Reports. Business Insider. The Alexa platform was in 5M households through Echo in 2016 and is about to explode through Amazon’s iphone mobile app with Android to follow. Skills are improving through usage and developer partnerships. LeadershipStrategyPerformanceMarketplacePrimeAlexaStudiosAWSPredictions$1B
  80. 80. Echo is used for music and home automation and results in increases in spending by +10%. 84.9% 82.4% 66% 45.9% 40.9% 25% 34% 17% 31% 10% Tell Time Play Music Read News Control Lights Shop/Order Source: Experian, Creative Strategies (Based up on a survey of 180 Amazon Echo users conducted May 2016) Echo Usage (%) ECHO USE CASES Tried once Used frequently LeadershipStrategyPerformanceMarketplacePrimeAlexaStudiosAWSPredictions$1B
  81. 81. ALEXA ACCELERATOR TO DEVELOP SKILLS & APPLICATIONS Source: Amazon Alexa website Amazon is supporting Skill development with Developers to win against Apple & Google. LeadershipStrategyPerformanceMarketplacePrimeAlexaStudiosAWSPredictions$1B
  82. 82. ALEXA PLATFORM PARTNERS Amazon is partnering to supply voice interface assistant services on key everyday products. LeadershipStrategyPerformanceMarketplacePrimeAlexaStudiosAWSPredictions$1B
  83. 83. 7 @johnbatistich
  84. 84. “Prime Video offers exclusives from some of the world’s most passionate storytellers. These shows are great for customers, and they feed the Prime flywheel – members who watch Prime Video are more likely to convert from a free trial to a paid membership, and more likely to renew their annual subscriptions.” Photo Source: Google Images LeadershipStrategyPerformanceMarketplacePrimeAlexaStudiosAWSPredictions$1B
  85. 85. Photo Sources: Google ImagesPhoto Source: Google Images LeadershipStrategyPerformanceMarketplacePrimeAlexaStudiosAWSPredictions$1B
  86. 86. DISRUPTING CONTENT TO DRIVE PRIME FLYWHEEL Source: L2 Inc. via The Economist $2.5 $4.0 $4.3 $4.5 $6.0 2017 Content Budgets ($B) Amazon is investing at or above the level of incumbents in original content to drive acquisition and retention of Prime membership. LeadershipStrategyPerformanceMarketplacePrimeAlexaStudiosAWSPredictions$1B
  87. 87. “I feel like we’re competing with an unusual person. Because Jeff’s there, it’s kind of scary.” Reed Hastings CEO Netflix LeadershipStrategyPerformanceMarketplacePrimeAlexaStudiosAWSPredictions$1B
  88. 88. Photo Sources: Google Images “Our focus is on bringing customers the best premium video programming, when and how they want to watch it. Streaming Thursday Night Football on Prime Video is a great step for us toward that vision, and offers tremendous new value for Prime members around the world.” Jeff Blackburn Senior Vice President, Business Development & Entertainment LeadershipStrategyPerformanceMarketplacePrimeAlexaStudiosAWSPredictions$1B
  89. 89. 8 @johnbatistich
  90. 90. Photo Source: Google Images “AWS has become the world’s most comprehensive, widely adopted cloud service with more than a Million customers. AWS offers more than 70 services: compute, storage, databases, analytics, mobile, internet of things and enterprise applications” LeadershipStrategyPerformanceMarketplacePrimeAlexaStudiosAWSPredictions$1B
  91. 91. AWS PRODUCTS AND SERVICES Compute Storage NetworkingDatabase Developed Tools Analytics Content Delivery Game Development Internet of Things Mobile Services Management Tools Security & Identity Enterprise Applications Application Services Amazon EC2, AWS Elastic Beanstalk. Amazon S3, Amazon EBS, Amazon Galcier. Amazon RDS, Amazon DynamoDB. Amazon Aurora AWS Direct Connect, Amazon Route 53. AWS CodeCommit AWS CodeDeploy. Amazon CloudWatch, AWS Cloud Formation. AWS Identity & Access Management (IAM). Amazon Kinesis, Amazon QuickSight. Amazon CloudFront. AWS IoT. Amazon Lumbaryard. AWS Mobile Hub, AWS Device Farm. Amazon WorkDocs, Amazon Workmail. Amazon API Gateway, Amazon AppStream. AWS Marketplace – Infrastructure Software, Business Software & Developer Tools Source: Jitender Miglani. From supporting Amazon Marketplace to the largest and most profitable cloud computing enterprise. LeadershipStrategyPerformanceMarketplacePrimeAlexaStudiosAWSPredictions$1B
  92. 92. 4.6 7.9 12.2 2014 2015 2016 AWS Net Sales ($B) Significant Product Features Released Source: Amazon Company Reports. 61 82 159 280 516 722 1000 2010 2011 2012 2013 2014 2015 2016 In only 11 years, AWS has grown to generate $12.2Bin Revenue and $3.1B in Net Income in 2016. AWS REVENUE & INNOVATION LeadershipStrategyPerformanceMarketplacePrimeAlexaStudiosAWSPredictions$1B
  93. 93. COMPETITIVE POSITION FOR CLOUD SERVICES 40% 25% 35% Source: Gartner. L2 Inc from Synergy Research Group 2016 Other AWS leads the global market for cloud computing in front of IBM, Google & Microsoft & Amazon’s most profitable division. Gartner Cloud Infrastructure Comparisons Market Share ($) LeadershipStrategyPerformanceMarketplacePrimeAlexaStudiosAWSPredictions$1B
  94. 94. POWERED BY AWS AWS provides the cloud computing for some of the world’s most recognised organisations. Source: AWS LeadershipStrategyPerformanceMarketplacePrimeAlexaStudiosAWSPredictions$1B
  95. 95. 16 PREDICTIONS 9 @johnbatistich
  96. 96. New offices in Seattle ORGANISE BY PLATFORM & MARKET IN A MATRIX. CENTRALISATION EVOLVES TO HUB WITH SPOKES. Evolve the organisation design devolving decision making from Seattle closet to the Customer. Focus on culture to guide behaviour as the the company moves beyond 341K Employees. Develop an Indian Spoke (Bangalore) for Developing Markets. Evolve from a powerful HQ to a Hub & Spoke organisational design to enable innovation as the organisation rapidly expands. LeadershipStrategyPerformanceMarketplacePrimeAlexaStudiosAWSPredictions$1B High Probability
  97. 97. AMAZON CREATES A GLOBAL SUPPLY NETWORK THAT RIVALS INCUMBENTS TO IMPROVE FULFILMENT. Continueto partner with existing players like FedEx & UPS for long haul delivery. Invest to own the local delivery exploring on-demand delivery services. Invest in logistics assets for key markets to own last mile delivery. Explore on-demand delivery services like Uber or Deliv to support fast low cost delivery. LeadershipStrategyPerformanceMarketplacePrimeAlexaStudiosAWSPredictions$1B Medium Probability
  98. 98. AMAZON COULD ACQUIRE RETAILERS WITH WIDE STORE NETWORKS TO SUPPORT FAST LOCAL FULFILMENT. Macy’s Department Stores North America +700 Locations Fashion & Beauty Carrefour Stores Europe, Middle East, China & Indonesia +1600 Hypermarket Groceries & Convenience 7Eleven Stores 18 Countries 56,000 Stores Convenience Replaces the requirement for as many Fulfilment centres. Enables innovation like Fresh & Go with Supermarket ownership. Source: Adapted from L2 Inc. LeadershipStrategyPerformanceMarketplacePrimeAlexaStudiosAWSPredictions$1B Low Probability
  99. 99. AMAZON LEADS SAME DAY DELIVERY AS THE NEW NORMAL. Expand Fulfilment centres, logistics network &/or establish store network close to valuable customers. Expand same hour fulfilment of Millions of products across the top 50 cities through crowdsource Amazon Flex delivery. Focus on optimising existing assets/partners and drive new technologies to deliver same day and same hour across key cities. Pioneer new fulfilment technologies to enable same hour delivery. LeadershipStrategyPerformanceMarketplacePrimeAlexaStudiosAWSPredictions$1B High Probability
  100. 100. INDIA WILL BECOME AMAZON’S SECOND LARGEST MARKET. Investing $5Bto establish Marketplace leadership with an ambition of $15B Sales. Focused on India given that Alibaba owns China & Rakuten owns Japan. Local model to enable Millions of Sellers to engage in eCommerce. Amazon develops India for long term growth and leadership and uses the model to launch into developing markets. LeadershipStrategyPerformanceMarketplacePrimeAlexaStudiosAWSPredictions$1B High Probability
  101. 101. DRIVE OWNED & EXCLUSIVE BRANDS TO IMPROVE GP MARGIN Amazon develops a wide range of private label products focused on Basics (CPG), Fashion, and Elements (Health & Beauty). Health & Beauty Clothing and Shoes CPG LeadershipStrategyPerformanceMarketplacePrimeAlexaStudiosAWSPredictions$1B High Probability
  102. 102. AMAZON WILL DRISUPT PAYMENTS AND MAKE THE EXPERIENCE OBSOLETE WITH ZERO-CLICK. Grow the 33 Million customers have used Amazon Payments. Challenge PayPal & offer POS credit products. Move from one click to eliminating payment. Expanded payments service through Europe. Use payments already stored by Amazon’s 300 Million customers. Amazon has an opportunity to provide payment and POS credit options to Prime members. LeadershipStrategyPerformanceMarketplacePrimeAlexaStudiosAWSPredictions$1B Medium Probability
  103. 103. AMAZON CREATES A GLOBAL CUSTOMER INTELLIGENCE BUSINESS FOR MARKETPLACE PARTNERS. Shares aggregated and annomalised cross category data insights to deliver growth opportunities. Develops a intelligence business for partners and Marketplace sellers. Disrupts Research companies with richer cheaper intelligence. Amazon will generate more intent and purchase data than any other company in history. LeadershipStrategyPerformanceMarketplacePrimeAlexaStudiosAWSPredictions$1B Medium Probability
  104. 104. Managed data warehouse service. DISRUPTS FINANCIAL SERVICES BY OFFERING PRIME MEMBERS SIMPLER/CHEAPER LIFE ADMIN SERVICES. Home and Content Insurance.Health and LifeInsurance. Provide financial & banking services to Retailers and Prime Members. Provide simple, fair and better important but low involvement financial services to both Retailers and Prime Members. LeadershipStrategyPerformanceMarketplacePrimeAlexaStudiosAWSPredictions$1B High Probability
  105. 105. Develop a fourth platform EXPAND AMAZON FRESH IN STRONG MARKETPLACE MARKETS IN PARTNERSHIP WITH LOCAL SUPERMARKETS. Deliver Groceries in an hour or pick up in Store for free within 3 hours. Penetrate UK. Expand Fresh across US & Germany. Develop partnerships with local Supermarket chains to scale fulfilment using UK learnings. Expand into Fresh where there is a strong Marketplace to drive frequency and customer value. LeadershipStrategyPerformanceMarketplacePrimeAlexaStudiosAWSPredictions$1B Medium Probability
  106. 106. Develop a fourth platform AMAZON GO IS OPTIMISED AND REIMAGINES SUPERMARKETS AND CONVENIENCE STORES. Completely reorganises the store design and economics. Successful Seattle trial is optimised and scaled. Removes the entire payment experience eliminating friction delivering greater convenience. Go gets rolled out in stages. Self service Supermarkets follow. Full service retail strengthens in reaction. LeadershipStrategyPerformanceMarketplacePrimeAlexaStudiosAWSPredictions$1B Medium Probability
  107. 107. Managed data warehouse service. AMAZON ALEXA BECOMES LEADING DIGITAL ASSISTANT VOICE PLATFORM ACROSS A WIDE RANGE OF APPLICATIONS. Wins against Apple’s Siri & Google Home. Partnership with everyday services and products. Offered on Mobile apps drives usage out of home. Reimagines the interface for repeatable information,home management and reordering consumables. LeadershipStrategyPerformanceMarketplacePrimeAlexaStudiosAWSPredictions$1B High Probability
  108. 108. AMAZON STUDIOS WILL BECOME THE LEADING CONTENT CREATOR/DISTRIBUTOR DRIVING PRIME MEMBERSHIP. Establish both Hollywood & Bollywood Production. Studios creates the compelling exclusive content that drives the Prime flywheel. LeadershipStrategyPerformanceMarketplacePrimeAlexaStudiosAWSPredictions$1B High Probability
  109. 109. PRIME WILL ACQUIRE RIGHTS TO STREAM LIVE SPORT TO BRING THE BEST CONTENT & VALUE TO PRIME VIDEO. Building on the NFL agreement, Amazon will acquire rights to the NBL & EPL & stream globally. Expand live sport offer targeting NBL & other North American Sports. Use the NFL Thursday Night streaming deal to build the model for live sport. Move to the global sport stage focussed on Football. LeadershipStrategyPerformanceMarketplacePrimeAlexaStudiosAWSPredictions$1B Medium Probability
  110. 110. AWS INTEGRATES SERVICES/ALEXA & PARTNERS WITH ENTERPRISE SAAS. POSSIBLE SPIN OFF. Deliver new Enterprise products and services faster & cheaper than competitors. Expand markets and verticals maintaining leadership position. Acquire or Partner with leading Enterprise Saas products to deliver integrated cloud Enterprise services. AWS maintains its cloud computing leadership and integrates services for Enterprises. LeadershipStrategyPerformanceMarketplacePrimeAlexaStudiosAWSPredictions$1B Medium Probability
  111. 111. LEADERSHIP SUCCESSION ALLOWS JEFF TO STEP BACK FROM CEO AS CHAIR TO MAKE MORE HISTORY. The Earth is our starting place. Space was childhood dream. Driving private space exploration with SpaceX. Washington Post influence acquired for $250Min 2013. Humans in Space by next year with an ambition to get to the Moon & then onto Mars . Jeff will support an operating leadership transition,stepping back from CEO to become Founder/Chair to fly to the Moon & back!. LeadershipStrategyPerformanceMarketplacePrimeAlexaStudiosAWSPredictions$1B High Probability
  112. 112. 1. Becomes a matrix organisation focused on platforms and markets creating a hub (Seattle) & spoke (London, Munich & Bangalore). 2. Creates a global supply network that rivals incumbents to lower costs & improve service. 3. Acquire retailers with a extensive store networks to support fast local fulfilment. 4. Lead fast flexible free fulfilment through unrivalled investment and innovation. 5. Expand into new international markets through both acquisition & organic. India becomes amazon’s second largest market. 6. Drive owned & exclusive brands (private label). 7. Disrupt payments and make the experience obsolete with zero-click. 8. Amazon creates a global customer intelligence business for partners & marketplace retailers. 9. Disrupt financial services by offering prime members with simpler cheaper integrated services. 10. Expand amazon fresh in strong marketplace markets in partnership with local supermarkets. 11. Optimise and roll-out amazon go to reimagines supermarkets & convenience stores. 12. Alexa becomes leading digital assistant voice platform across a wide range of applications beating Google/Apple. 13. Studios will become the leading content creator/distributor driving prime membership +100m. 14. Amazon acquires rights to live sport to further drive Prime membership. 15. AWS adds services, partners/acquire Enterprise Sass. Comes under pressure to spin off. 16. Amazon will start acting upon a succession plan signalling leadership depth beyond Jeff Bezos. @johnbatistich PREDICTIONS
  114. 114. DRIVERS TO ONE TRILLION VALUATION? $136B $300B $12 $60 $11 $15 $50 2023-2025 $50B EBITDA 2016 $12.5B EBITDA AWS Revenue Doubles Payments Reaches PayPal’s current Revenues Search Advertising Reaches Facebook’s current Revenue from $1B Prime Membership grows to 100M up from 66M. Annual order value grows from $1.1K to $3-5K driven by Faster Fulfilment, Media/Videos & Alexa New Markets India 15 Brazil 5 Asia 10 Europe 20 Australia/NZ 5 Other 10 Share leadership Existing Markets North America 30 Existing International 20 Online penetration Grow share $10 Efficiencies Leverage Scale Fresh & Go Expand US & UK and roll-out into new markets $400B MARKET CAP. $1 TRIILION MARKET CAP. Amazon has the platforms and levers to get to $300MRevenue which at a $50B EBITDA would see the first Trillion Dollar Valuation. LeadershipStrategyPerformanceMarketplacePrimeAlexaStudiosAWSPredictions$1B
  115. 115. AUTHOR/CURATOR @johnbatistich
  116. 116. Annual Reports 2012, 2013, 2014, 2015 & 2016 Amazon Company Reports Amazon.Alexa L2 Inc. Scott Galloway Business Insider Venture Scanner S&P Global Market Intelligence USA Today Research Citi Research sMarketer Mashable Jitender Miglani Tomando U%3D ing-at-night-2017 -analysis -2013-2015/ oncoms-mindboggling-opportunity-in-1-chart/98487326/ -business-to-take-on-alibaba-ikfhpyes ons-expands-amaz on-deal-offering-delivery-in-an-hour h-amazon-when-it-launches -in-australia/news- story/73fb0c12f1092f291d2360f168f285a9 ocer ies/ oasts-good-christmas-amazon-partnership/ news-story/d89d88e8b90c674b13020e516e50860c 4cn#ixzz4c8AVcpgK -is-now-the-second-r ichest-man-in-the-world/#IZyHqtlr12vdO1oP.99 -parcel-delivery -alt ernativ es-20160502-gokn7s.html -jeff-bezos -has -chosen-an-heir-apparent -means-for -you-as -a-s hopper-20170419-gvo7qu.html nfl-amazon-prime-announce-tnf-streaming-deal on-micr osoft/ Type=RD&countryRedirect=true -amaz on-cash-a-way-t o-shop-its-s ite-without -a-bank-card/ -night-2017-3?r=US&IR=T
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Since going public twenty years ago today, Amazon has gone from a start-up online bookseller to the 4th most valuable company on the planet revolutionising and disrupting multiple industries, including retail, publishing, logistics, devices, apparel, search, payments, content and cloud computing. Now, Amazon is on it’s way to become the first Trillion dollar valued company. In this presentation we review AMAZON's Leadership, Culture, Strategy, Performance, Marketplace, Prime, Studios, Alexa & AWS. There 16 predictions that help get AMAZON to $300B Revenue & $50B EBITDA to become the world's first Trillion Dollar Valued Company. John Batistich is the Author/Curator and can be contacted on Linked In


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