1. amazon.com Work Hard Have Fun Make History

2. The Challenge facing Jeff Bezos “Far better to dare things, to win glorious triumphs, even though checkered by failure, than to live in the twilight that knows no victory, or defeat” “Far better to dare things, to win glorious triumphs, even though checkered by failure, than to live in the twilight that knows no victory, or defeat” Theodore Roosevelt Theodore Roosevelt

3. Big Hairy Audacious Goals “It takes vision and courage to create – “It takes vision and courage to create – It takes faith and courage to prove” It takes faith and courage to prove” Jeff Bezos created, but can he prove?? Jeff Bezos created, but can he prove?? Jeff Bezos Jeff Bezos

4. A Growing Industry. Time: 1994 Time: 1994 Internet Growth: 2300% per year Internet Growth: 2300% per year Jeff Bezos wanted to be part of it Jeff Bezos wanted to be part of it BHAG – Online Retailing of Books BHAG – Online Retailing of Books Amazon.com was born Amazon.com was born

5. DEMOGRAPHIC DATA The next five (5) slides visualize the Amazon story The next five (5) slides visualize the Amazon story These slides are followed by discussion questions for the groups to investigate and report on These slides are followed by discussion questions for the groups to investigate and report on

6. A Growing Phenomena Total Customers Total Customers Amazon.com went public in 1996 Amazon.com went public in 1996 2002 stats will be out in May 2002 stats will be out in May YEARNUMBER 1996180,000 19971,500,000 19986,200,000 199916,900,000 200024,700,000 200132,000,000

7. A Growing Presence Total Sales Total Sales Expansion of Expansion of Products Products Partners Partners Distribution center Distribution center Created huge sales increases Created huge sales increases YEARSALES 1996 15,746,000 15,746,000 1997 147,787,000 147,787,000 1998 609,819,000 609,819,000 1999 1,639,839,000 1,639,839,000 2000 2,761,983,000 2,761,983,000 2001 3,122,433,000 3,122,433,000

8. A Growing Concern Operating Losses Operating Losses Will the bleeding ever end? Will the bleeding ever end? Year 2000 the dot bomb Year 2000 the dot bomb YEARLOSS 1996 6,246,000 6,246,000 1997 31,020,000 31,020,000 1998 124,543,000 124,543,000 1999 719,968,000 719,968,000 20001,411,273,000 2001 567,277,000 567,277,000

9. A Growing Distribution Channel ± 3,000,000 Sq Ft of inventory storage ± 3,000,000 Sq Ft of inventory storage Plans made in 1998 Plans made in 1998 Have already vacated a portion of the properties Have already vacated a portion of the properties LOCATION SQ FT Seattle, WA 93,000 Campbellsville, KY 770,000 Coffeyville, KS 750,000 Fernley, NV 332,650 Grand Forks, ND 130,000 New Castle, DE 202,000 McDonough, GA 800,000

10. Stock Price Comparisons Stock Prices HighLow 1 st qtr – 1999 99.5642.13 2 nd qtr – 1999 110.6344.88 3 rd qtr – 1999 85.0041.00 4 th qtr – 1999 113.0061.00 1 st qtr – 2000 91.5058.44 2 nd qtr – 2000 68.6332.47 3 rd qtr – 2000 49.6327.88 4 th qtr – 2000 40.8814.88

11. Discussion Question #1 Based on your research, please list five (5) partners that are presently working with Amazon. What is the nature of each relationship. Make sure the business is still ongoing, as some of the partners listed are now defunct. Based on your research, please list five (5) partners that are presently working with Amazon. What is the nature of each relationship. Make sure the business is still ongoing, as some of the partners listed are now defunct.

12. Discussion Question #2 Compare and contrast the value chain of Dell with the value chain of Amazon. With special attention being directed to the differences in sales, distribution, and profitability. Compare and contrast the value chain of Dell with the value chain of Amazon. With special attention being directed to the differences in sales, distribution, and profitability.

13. Discussion Question #3 What are the pros and the cons of the distribution Centers that Amazon built in 1999? Why did they build? What is the present use of these? What are the pros and the cons of the distribution Centers that Amazon built in 1999? Why did they build? What is the present use of these?

14. Discussion Question #4 In your expert opinion, please answer this: Will they become profitable? If so, when? If not, why not? What are the reasons for over $2 billion dollars in operating losses? In your expert opinion, please answer this: Will they become profitable? If so, when? If not, why not? What are the reasons for over $2 billion dollars in operating losses?

15. Discussion Question #5 Please describe and enumerate the Amazon Value chain. Where could they save money in this supply chain as per the Dell Computer example that we discussed last week? Please describe and enumerate the Amazon Value chain. Where could they save money in this supply chain as per the Dell Computer example that we discussed last week?

16. Discussion Question #6 If you were Amazon management, what steps would you make in order to turn the business around? Also, what is your take on the stock price changes during 1999 and 2000. How over valued was the stock in 1999, and is it undervalued now? If you were Amazon management, what steps would you make in order to turn the business around? Also, what is your take on the stock price changes during 1999 and 2000. How over valued was the stock in 1999, and is it undervalued now?