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Strategic Financial Management Report: Amazon战略财务管理报告：亚马逊
Part 2: External Analysis第2部分：外部分析
PESTEL佩斯特尔
Political政治的
•信息时代发展10多年后，各国政府意识到电子商务对经济发展的重要性，出台了一系列促进电子商务发展的政策，为电子商务的发展创造了良好的外部条件，甚至在以下方面提供了支持：人才、资金、科技、税收，希望通过电子商务刺激消费，促进出口。• After the development of the information age for more than 10 years, governments are aware of the importance of e-commerce for their economic development, they have launched a series of policies to promote the development of e-commerce, creating good external conditions for development of e-commerce; and even they provide supports in terms of talent, funds, science, technology, tax, hoping to stimulate consumption through e-commerce, promoting exports as well.
•为了减少电子商务对国内线下零售业的影响，以及通过电子商务惩罚偷税行为，各国政府还制定了一系列电子商务税法，例如，美国参议院于2013年通过了《市场公平法》，征收网络销售税。2016年，英国采取措施惩罚逃过英国增值税（VAT）销售的海外贸易商。• In order to reduce the impact of e-commerce on the domestic retail offline, as well as punish tax evasion behavior through e-commerce, governments have also developed a series of e-commerce tax law, for example, the United States Senate passed the Marketplace Fairness Act in 2013, levying network sales tax. In 2016, the United Kingdom took measures to penalize overseas traders who had escaped the sale of value-added tax (VAT) in the UK.
Economic经济
2015年美国国内生产总值约17亿美元，经济增长率1.9%；2015年英国国内生产总值17亿美元，经济增长率1.9%；2015年中国国内生产总值17亿美元，经济增长率1.9%；2015年德国国内生产总值17亿美元，经济增长率1.9%；2015年德国国内生产总值17亿美元，经济增长率1.9%。增长率为1.9%。总的来说，尽管全球经济还不是很好，但没有进一步下滑，而中国、美国、德国、英国等主要经济体都保持了较高的增长率，总体而言，未来世界经济的发展极有可能具有良好的前景。GDP of the United States in 2015 was 1.7 billion US dollars or so, the economic growth rate was 1.9%; GDP of the United Kingdom in 2015 was 1.7 billion US dollars, the economic growth rate was 1.9%; in 2015, GDP of China was 1.7 billion US dollars, the economic growth rate was 1.9% ; GDP of Germany in 2015 was 1.7 billion US dollars, the economic growth rate was 1.9%. In general, despite the global economy is still not very good, but there is no further decline, while China, the United States, Germany, Britain and other major economies have maintained a high rate of increase, on the whole, the world's economic development in the future is very likely to have a good prospect.
随着运费和人工成本的增加，对于像亚马逊这样拥有数百万销售人员的电子商务公司来说，做生意的成本也在增加。
With the increase in freight and labor costs, for e-commerce companies such as Amazon which has millions of distribution staff, the cost of doing business is increasing.
Sociocultural社会文化的
• At present, there are more than 7 billion people in the world, of which the Internet population is about 3.6 billion, population of purchasing online is about 1.2 billion, consumer spending habits have gradually shifted from an online to an offline way, users’ shopping habits promote the rapid development of e-commerce.
Sociocultural
• Online shopping is involved in fake products, poor after-sales service, payment security and other issues, which makes some consumers have doubts about online shopping, while online shoppers are required to provide credit cards, addresses, phone numbers and other information, which has also increased the risk of personal privacy disclosure.
Technological
• With the rapid development of large data age, the function of cloud computing services has been significantly improved, which can significantly reduce the corporate costs and personal in preservation, management and use of information and data to facilitate marketing, promotion, cross-border payments and other business operations of e-commerce companies, which has played a catalytic role in the development of e-commerce.
• Mobile technology continues to update, the use of 3G, 4G technology, optimization of WiFi environment, the popularity of smart terminals makes mobile-side penetration increased in the scale of shopping transactions year by year, mobile shopping has continued to increase.
Legal
• Governments have attached importance to the development of e-commerce and developed a series of laws and regulations to promote the healthy development of e-commerce, for instance, the United States promulgated the Mail, Telephone Orders Act and Fair Credit Checkout Act to protect online shoppers’ rights.
• In 2013, the US Federal Aviation Administration revoked the ban on the commercial use of unmanned aerial vehicle systems, it is considering the rational use of unmanned aerial vehicle within a low-altitude range, which makes transport of books and food and other commodities through unmanned aircraft become possible, facilitating the development of e-commerce.
• In 2014, the State Administration for Industry and Commerce (SAIC) in China promulgated the Administrative Measures on Internet Transactions to regulate online commodity trading and related services to protect the legitimate rights and interests of consumers and operators and to promote the sustained and healthy development of the network economy.
• In 2015, EU Committee adopted two pieces of e-commerce legal advice on the provision of digital content and the sale of goods online. The two proposals aimed at eliminating major barriers to cross-border e-commerce within the Union, such as inconsistency in contract law among member states, and addressing high operating costs and lack of trust in cross-border consumers’ spending.
Porters Five Forces-SBU: LCC-Europe
Threat of Entry
• E-commerce industry relies on the Internet, logistics systems, supply chain establishment and maintenance of the database need a strong IT support, so there is a higher threshold in the industry. However, now there are many communities and portals have begun to get involved in e-commerce, with a strong user base to carry out e-commerce. Amazon should also pay an appropriate attention to this aspect.
Threat of Substitutes
• E-commerce alternatives are traditional sales industry. Traditional stores bring people the fun of shopping, so Amazon makes efforts to enhance user experience, enhance the interaction with users to bring different consumers a different experience, such as what "My Amazon" provides.
Supplier Power
• With the rapid development of e-commerce, suppliers will more and more cooperate with online shopping mall to expand sales. Consumers have higher requirements for the quality of goods and after-sales service, making Amazon also have a high requirement for source of supply quality. Amazon is an international company, its suppliers are relatively stable, and it can buy goods around the world. Apple and other world-renowned companies select Amazon as the designated online retailer, which further shows that the bargaining power of Amazon's suppliers will not be too strong.
Buyer Power
• With the development of e-commerce, consumers have more alternative purchase ways and shopping sites, because of this, the price war in e-commerce market is so intense. At present, many people still choose to go shopping in traditional stores. It is necessary to increase market share with lower prices and improved service quality to attract more consumers.
Competition with competitors
Amazon has many competitors, such as Wal-Mart e-mall, Taobao, eBay, Tmall and Barnesandnoble, etc., the competition is very intense.
Market Analysis
Industry Market Prediction
1. The global total sales volume of B2C in 2015 was US $ 1.7 trillion, up by 17.7%. E-commerce showed a rapid development trend and the development potential of e-commerce was huge. It is estimated that in 2020, the revenue of global B2C will reach 3.4 trillion US dollars.
•Because of the deepening of global economic trends, trade barriers decline.
2. A report from global consulting firm Accenture and AliResearch, Alibaba Group’s research arm forecasts that in 2020, the global B2C cross-border e-commerce market will increase to $1 trillion from $230 billion in 2014.
• With the further development of economic globalization, cross-border b2c transactions will become the main form of future world trade.
SBU Market Prediction Europe
1. A new study by Ecommerce Europe shows that in recent years, E-commerce in Europe has risen sharply, and revenue in 2016 has increased by 12% to € 510 billion. By 2020, although the increase will slow down, the compound growth rate can still be maintained at around 10%.
2. Comparison results of Europe's top 10 major E-commerce markets show that the British, French and German e-commerce ranked the top three in the European market. In addition to the top three, revenue of other European e-commerce market is much lower. #p#分页标题#e#
Critical success factor
CSF
Whether trade barriers can be effectively eliminated
Whether measures developed by governments for promoting the development of e-commerce can be effectively implemented
Development of supporting industries related to B2C, for example, logistics industry
Brand image
Service level
Consumers’ habits of shopping online
Opportunities and Threats
Opportunity Threat
The development of the global economy and the deepening of the integration trend have increased the demand for B2C. business Governments began to levy taxes on e-commerce enterprises.
Governments attach importance to the development of e-commerce and have promulgated a series of measures to promote the development of e-commerce. E-commerce in the service, information security and other aspects also need to be further improved.
The number of Internet users is increasing. The increase in labor costs increases the cost of logistics.
The progress of network technology has promoted the development of e-commerce. Whether potential trade barriers can be eliminated
Consumers’ online shopping habits are being strengthened. B2C competition is very intense.
Strategic Position
Bowman’s Strategic Clock: hybrid
According to the characteristics of the B2C industry and the advantages of Amazon, it is recommended that Amazon can adopt a hybrid strategy, that is, to provide customers with perceived added value while maintaining low prices. Amazon has a stable supply channel in the world, it is able to provide customers with rich, high quality and low prices of products, and Amazon has a strong network technology team and logistics team to give consumers a good online shopping experience.
Ansoff Matrix:
Strategy Implementation
1 Market penetration: improving services, lowering product prices and encouraging more consumers to shop through Amazon Organic Development
2 Market development: in addition to the B2C market in Britain and France and Germany, it should pay attention to open up other potential B2C markets. Strategic alliance
3 Product extension: provide a better online shopping experience Organic Development
4 Product extension: provide global quality and cheap products Strategic alliance
5 Market development: pay attention to B2C business in some valuable market segments Merger horizontal
Corporate Roles:
Synergy manager
•Amazon is through the merger to enhance their own competitiveness.
•Quickly enhance the market share
•Integrated technology, data and market resources
•Reduce the procurement, logistics costs
•Perfect the industrial chain
Parental developer
• Amazon allows SBUS to operate and manage based on market segments
• Amazon's parent company gives a greater flexibility to the management of the subsidiaries to maximize the autonomy of SBU’s.
International Strategy: Multi-domestic and Global
Internationalization strategy
• Through the acquisition of local e-business enterprises to quickly enter the local e-business market
• Through the acquisition or cooperation to improve the industrial chain
• Through the integration of the resources of the subsidiaries to enhance the quality of service and efficiency
Conclusion
With the deepening of global economic integration, the future B2C market size will be further increased, Amazon as one of the most competitive B2C companies, has taken a series of effective measures to meet future challenges and development. Amazon is through the acquisition of local e-business enterprises to quickly enter the world's B2C markets with growth potential to improve their layout in the world market. Amazon is through the acquisition of e-commerce enterprises to improve the industry chain to achieve the comprehensive management including product order, sales, logistics, finance, which effectively improves efficiency and reduces costs. Amazon has adopted a flexible management approach to its subsidiaries, allowing them to operate and manage based on what their market segments needs, ensuring that Amazon has a strong competitive edge in every market segment. In addition, Amazon is through the integration of resources to promote the development of technology, and continuously improving the quality of service and efficiency, as well as improving consumer experience to enhance consumer loyalty. All in all, Amazon is ready for strategic opportunities and challenges in the future.
Proposed Future Strategies
Corporate Europe
Market penetration: lower product prices, improve service efficiency and cost to attract consumers to use Amazon
Via: Organic Development Market Penetration: collaborate with suppliers from all over the world to provide quality and cheap products around the world
Via: Strategic alliance
Market development: pay attention to open up potential markets, cultivate online shopping habits
Via: Joint venture Market development: in addition to markets in Britain and France and Germany, pay attention to open up markets outside the European market, stimulate consumers’ desire of online shopping
Via: Strategic alliance
Product extension: improve the industrial chain, provide a better online shopping experience
Via: Organic Development Product extension: the use of information technology to provide quality services include: return, logistics, browsing, finance and so on.
Via: Organic Development
Market development: pay attention to B2C business of some valuable market segments
Via: Merger horizontal Market development: pay attention to mobile phones, clothing, digital books and other potential market segments that European consumers prefer
Via: Merger horizontal
Selection of Winning Strategy
Suitability Test
Options passing Suitability test: 1, 3, 4, 5 and 6
Rejected option: 2
Acceptability Test:
Options passing Acceptability Test: 1,3and 5
Rejected options: 2, 4, and 6
Feasibility Test:
Option 1 Option 3 Option 4
Financial: Acquisition of the European online shopping service website: BuyVIP.com. BuyVIP is headquartered in Spain and currently it has more than 6 million subscribers. Buying BuyVIP helps Amazon to quickly build its own presence in the area of online shopping service and help Amazon to improve its industry chain and provide better consumer experience.
Resource development: increase the publicity funds, and further improve the influence of BuyVIP.com in Europe; Provide personnel training to ensure that BuyVIP.com can provide consumers with a better service experience in Europe to help them form a online consumption experience. Financial: Fund and cooperate with the Austrian computer vision team, cooperating ith the team to get computer vision technology will contribute to the future implementation of the Amazon UAV delivery plan. In the long run, the partnership will make Amazon achieve UAV delivery earlier than the competitors to improve its brand influence, enhancing delivery efficiency and reducing costs.
Resource development: provide financial support to ensure that the team can continue to improve the level of computer vision technology;
strengthen the cooperation between the R & D team and the Amazon logistics team to ensure that the technology can be used as soon as possible to the UAV delivery plan. Financial: acquisition of the British online bookstore :The Book Depository. The deal allows Amazon to successfully enter the segment of online book selling.
Resource development: personnel training, resources and business integration ensure that the Book Depository can bring growth to Amazon's business in Europe. According to the consumer habits of European consumers for product purchase and service processes to optimize.#p#分页标题#e#
Winning Strategy: Option 1
Description of Winning Strategy
In the long run, the above three strategy options are able to contribute to the improvement of Amazon's competitiveness, but the winning strategy is Option 1. Because the online shopping quota and frequency of European consumers are still relatively low when they are compared with that of consumers of countries of the rest of the world, their online shopping habits have not been strengthened. And in the Option1, acquisition of BuyVIP.com will help Amazon to provide a better consumer experience to other consumers, making the consumption habits of European consumers be strengthened, which is important for the development of Amazon. And considering Option 3, in cooperation with the computer vision technology team does help to promote the UAV delivery plan, but the current European governments’ ban on the UAV delivery may not be relaxed within a short period of time. In terms of Option 5, Amazon’s entering the online book sales segment has limited effect on improving the overall income of Amazon in Europe.
BuyVIP was founded in 2005 and it was a Spanish website that sells branded products of the fashion and lifestyle industry, it evolves into a membership website that offers up to 70% discount for members and covers all aspects of life. It has more than 600 million members, Amazon is through the acquisition of BuyVIP. com to quickly enter the European e-commerce industry and be recognized by consumers.
BuyVIP. com deals with online shopping service, it provides services related to all aspects of online shopping, such as: discounts, product design, recommendation, etc., on the one hand its business can give consumers a better consumption experience, on the other hand, its business will help eliminate consumers’ doubts for fake and shoddy online shopping goods, poor after-sales service. BuyVIP. Com is very helpful to help European consumers to form online shopping habits.
After Amazon's acquisition of BuyVIP.com, it should invest money to increase the influence of BuyVIP.com in Europe, especially promoting it to the European markets outside Britain, France and German, in which there is a still small size of the electricity market, but there is a large population and great development potential, there is the need of BuyVIP.com to help consumers there to form online shopping habits. In addition, Amazon should pay attention to the training for BuyVIP.com personnel, according to the habits of European consumers to optimize the content and mode of service to ensure that BuyVIP.com can provide a better service experience for European consumers to help them form an online purchasing experience.
Risk Assessment (ERM) & Management
Risk assessment carried out using Enterprise Risk Management Framework
Type of risk Risk Address Risk / Action Manage Risk
Strategic Competitive risk:
competitors have gained more consumer recognition Mitigation Increase advertising efforts and organize promotional activities
Financial Industry/economy risk: European economic recovery is slow Retention European e-commerce market in 2020 will still maintain about 10% growth
Compliance Brand risk: Customers’ complaints on product quality, the speed of return Mitigation Strengthen the regulation of suppliers
Financial Exchange rate change risk: increase the exchange rate of the enterprise Mitigation and transfer Hire a professional person to carry out treasure hedging operations
Operational Employees risk: can not provide consumers services required in a timely manner Mitigation Strengthen the training of customer service personnel
Managing change
Senior managers evaluate the risks before and after M & A and respond to risks
The overall strategy of all merged and acquired companies and the subsidiaries should be consistent with that of and the parent company.
The company maintains a good communication and ensures the best products and services available to consumers.
Management should pay attention to staff training.
Marketers do market research to understand the needs of consumers in different places and to meet the needs.
Managers do marketing work to improve the corporate brand image and visibility.
Suitability Test: Europe
Option strengths Weakness Opportunities Threats Score
strong brand
Developed logistics system
Have more suppliers
Have a strong technical team
Too high labor costs are
Lack of profitability Governments attach importance to e-commerce providers
Large market potential for e-commerce
Technology development provides protection for the development of B2C Governments began to collect taxes on e-commerce enterprises
High competition
1 May increase and take advantage of 1,2, 3,4 = (+4) may decrease or overcome 1and 2=(+2) May increase and take advantage of 1,2, 3 = (+3) may decrease or overcome 2=(+1） 10
2 May increase and take advantage of 1,2, 4 = (+3) may decrease or overcome 2=(+1） May increase and take advantage of 1,2, 3 = (+3) Increase 2=(-1) 6
3 May increase and take advantage of 1,2, 3,4 = (+4) may decrease or overcome 1and 2=(+2) May increase and take advantage of 1,2,3 = (+3) may decrease or overcome 2=(+1) 10
4 May increase and take advantage of 1,2, 3,= (+3) may decrease or overcome 2=(+1) May increase and take advantage of 1,2,3 = (+3) Increase 2=(-1) 6
5 May increase and take advantage of 1,2, 3,4 = (+4) may decrease or overcome 1and 2=(+2) May increase and take advantage of 1,2,3 = (+3) may decrease or overcome 2=(+1) 10
Acceptability Test: Europe
Option Risk Vs return Stakeholder reaction Accept/reject
1 Acquisition of the European online shopping service website BuyVIP.com. BuyVIP is headquartered in Spain and currently it has more than 6 million subscribers. The acquisition of BuyVIP will increase the financial burden of Amazon in the short term, but it will help Amazon to build its influence quickly in the online shopping service in the long run. It will also help Amazon to improve their own industrial chain to provide customers with a better consumer experience Shareholders: the long-term benefits of acquisitions may increase the confidence of stakeholders
Government: For security reasons, the government may impose restrictions and control on UAV delivery. #p#分页标题#e#
Accept
2 The world's mobile phone market has reached trillions of dollars, Amazon can also launch their own mobile phone: fire in Europe, the advantage is that it can bring great benefits to Amazon, the disadvantage is that the mobile phone market has been saturated. Shareholders: it may give Amazon the opportunity to participate in the competition in the mobile phone market.
Consumers: as the competition in the mobile phone market is very intense, consumers can choose from a lot of brands, they may not be very interested in “fire”. Reject
3 It funds and cooperates with the Austrian computer vision team, working with the team to get computer vision technology, the risk of this cooperation lies in whether the technology is advanced enough exceed the competitors, whether it can be used for delivery. The advantage of this cooperation is that it may help the future implementation of the Amazon UAV delivery plan. In the long run, the partnership will make Amazon be earlier than the competitors to achieve UAV delivery, improving its brand influence, delivery efficiency and reducing costs. Competitors: competitors may be worried about that Amazon's delivery efficiency will be greatly improved
Consumers: consumers will improve their satisfaction due to improved delivery efficiency. Accept
4 In order to better attract European consumers to implement price competition, to ensure that Amazon's products prices are lower than all competitors’. The risk is that it is likely to cause local government and rival protests and programs, the advantage is that it can attract consumers in a short time.
Competitors: protest of various channels may trigger investigation by local legal departments.
Reject
5 Acquisition of the British online Bookstore: The Book Depository. The deal allows Amazon to successfully enter online book selling. The risk is that consumers' demand for online book purchases is reduced. Shareholders: they may be doubts about the benefits of the acquisition.
Consumers: European consumers easily have an access to Amazon platform. Accept
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