Amazon.

com in 2019
Amazon.com Inc. one of the biggest and most valuable with an operating profit of $12.4 billion (financials
of 2018). Established in 1994 by Jeffrey P Bezos in Seattle, US. It started as book selling service only, then
launched its own website in July 1995, and by September 1995 it was generating weekly sales of $20,000.
Being an internet the company’s marketing expenses are about 10% of its sale while the competitors were
spending 119% of sales. In May 1997 Amazon got listed and raised $54 Million through equity issue and
till now debt and equity has been the major source of raising fund for Amazon and majority of its expansion
is funded from operating cash flows. The company also have to deal with the legal authorities, as the
company has third-party association in its business in US in order to protect itself from volatile judgments
against the organization from the senate however, it should continue to expand its indigenous inventory
operation in growing markets aboard like India, Bangladesh, etc. Going Ahead Amazon should retain the
some of its businesses and also try to improve some internal and external factors such as
• As clearly observed from the data with a hefty market share of 45.2% in US and 15.2% in world in the
apparel and footwear internet retailing, Amazon should continue to build on its strength in the US market
as well as should utilize the growth potential in world market.
• The working capital has increased to 19.59% from 2012 to 2018, however the working capital (% of
revenue) has declined to -4.4% which implies that Amazon has accumulated large no of trade
receivables which clearly indicates that it has to change its policies regarding trade receivables.
• Amazon has maintained constant inventory turnover ratio despite substantial increase in sales and
revenue which indicates that it relies heavily on third party sale which hinders the profitability margins
of the company.
• Amazon hold approx. 40% of market share in the world of cloud services, so it should continue to grow
its operation in this domain and bring new technologies to be in the top market leader position
• Internet retailing: Amazon holds 52.5% market share and 25% world share; from this we can easily
conclude that it should continue to expand its business in this segment.
• Despite Amazon has approx. three times the market cap. from its closest competitor Walmart still it lags
much behind in Market Cap. per GMV index which is 4.09, whereas Walmart has 16.96. So, Amazon
should try to decrease its GMV in order to increase its Market Cap. per GMV index which ultimately
boosts the financial as well as the market position of the company.

A company with a bunch of experts like Jeff Bezos and others as board members can go ahead and start
some new business as follows: -
• Amazon faces a serious competition from domestic player like Walmart, because of the physical
presence. Amazon should invest in opening supermarkets.
• Amazon holds 7.7% market share in US and 3.1% market share in the world, as Amazon is expert in
online retailing and service providing business and a market leader in many of its sector it could afford
to exit this business.