Blog: You, us, everyone

Introduction 
AMAZON.com Inc is an American multinational headquartered in Seattle. It is the world’s largest online retailer for electronic consumer goods such as books, software, CDs and DVDs. The company is selling the Kindle product range under its own name, this comprises e-book readers and tablet computers.  
Through its e-commerce platforms “Marketplace” and “zShops”, third parties can buy and sell their own products. 

Amazon’s business strategy is to offer high quality products from many different sources; hence its range contains a wide selection of products which respond to multiple client demands. Because Amazon has no peer affiliations with any major product, gross margins are lower up-front than its major competitors. The company compensates for its lower gross margins with higher sales volumes. Amazon has an excellent reputation for its independent products views. 

Strengths and weaknesses analysis / Fundamental analysis 
Strengths:

• The company from Seattle is a “Pure-Growth-Story”. Ever since its creation, a major part of the company profits are reinvested. Hence, in terms of share price growth, the company can compete with the major IT companies,
• he company has developed a meaningful cloud strategy,
• It is expected that the company will launch its own smart-box, in 2014. It will therefore be able to sell digital products to end consumers,
• As a product retailer to consumers, the company’s share price shows an extraordinary development to date.

Weaknesses:

• A fundamental analysis of its results shows that the net results have been stable for years although sales volumes have increased,
• 65% of its sales occur across the section “Electronics and related”,
• It is not strategically reinforcing its position with some of its acquisitions e.g. the company has spent too much on the purchase of the website company, Goodreads,
• In order to increase the sales volume, Amazon is selling its premium products such as Kindle Fire at low margins.

Investment opportunity /  Portfolio management 
Operational risks: Small to Medium 
Expected growth: Average
Investment orientation: Group “Global Strategies”, International Best-in-Class companies