An end of a journal....the beginning of an E-reader

As this semester winds down, I reflect on what I have learned through this class and about Amazon.com. Here is what I know: 1) Amazon wants to dominate, its in their culture 2) They want to be associated with EXTREME Customer Service 3) they are pushing the e-book market to limits few have ever seen.

If Amazon.com would hire me, "fingers crossed," I would certainly work for them. Their cultural mindset of being the biggest, best, and cheapest with high value placed on convenience, customer service and technology, places them WAY up there on my list of characteristics to look for in an employer.

Since this class began Amazon.com has come out with Kindle 2, forced e-reading onto John Q Taxpayer's mind, caused newspapers and magazines to rethink how and where they publish their info, and showed me how a goofy CEO, Jeff Bezos, with an idea and a personality similar to a sit-com character can create one of the world's dominate leaders in online retail and soon e-reading.

My only question is......where will technology and e-reading be 1 year from today? Textbooks on Kindle 2's? Larger E-reading devices? Only time and R&D will tell.

Newspapers Shift to E-reading

The newspaper industry is dwindling, Detroit is crumbling, but there are some bright spots surfacing. As Detroit newspapers are challenged with a declining industry and harsh economic conditions, they are mixing things up. Recently announced, Detroit News subscribers will be the first in the country to test Amazon.com's rival e-reader, produced by California-based firm Plastic Logic, the Plastic Logic Reader. This partnership with the Detroit News, Detroit Media Partnership and the Detroit Free Press will drastically change the way subscribers receive their paper. Below is a video demo of the Plastic Logic's e-reader. No price has been set for the device, but it is said to rival Amazon.com's Kindle 2 priced at $359.

AT&T May Enter E-Book Market

In class today we debated how implementation of recommendations and strategies would factor into costs and feasibility of actually completing a plan. Well no matter the cost, AT&T is attempting to get into a hot market. I read an article that AT&T may enter the consumer electronics industry with an e-book reader to compete with Amazon.com's Kindle 2. It is said that this is an attempt to monetize an e-book reader as that market heats up. I suspect with AT&T's partnership with Apple's Iphone and the phone's application that allows Kindle books to be read on an Iphone may bring stormy seas ahead for all three parties.

The e-book market is heating up and as technological innovations thrust convenience and efficiency onto consumers. It makes since for the second largest wireless provider to throw themselves into this techy mosh pit. Right now, April 1 - 3, the International CTIA Wireless 2009 Convention is being held. This is where new ideas, innovations and industry pushing technology is unveiled.

Downsizing Indiana Operations

Munster IN, many of us may have never heard of it, but Amazon.com sure has. Last year they opened a small distribution facility that employed 50 people and expected to grow that to 100. Not anymore, Amazon.com recently announced it would be closing the facility by May 25, not for the obvious economic reasons, but to increase efficiency among their distribution channels. With two other Indiana based locations and a third on the way, outside of Indianapolis opening 2011, Amazon.com most likely bit off more than it could financial chew.

This is an interesting move considering Amazon.com's position within the Midwest has been traditionally very strong. An testament to their belief in their employees, all 50 have the option to relocate to another facility, will get 3 weeks severance pay after May 25, and receive aid and assistance in job searches. Beats the old adage of "Fire them on a Friday."

Collaborating with the Competition

After an uproar of debate over the Kindle 2 and its lack of compatibility with other digital readers, Amazon.com one ups the nay sayers. Now you can read your Kindle purchases on your IPhone and bookmark where you left off reading while it automatically syncs both devices.

An interesting move considering Apple and Amazon are becoming competitors with the introduction of Amazon.com's digital reading device Kindle 1 and Kindle 2. By tapping into the IPhone user market through its application, Amazon.com has exposed itself to an increased number of users who can easily download the app for free and enjoy their reading experience without a Kindle. In order for Amazon.com to continue to innovate their e-book experience, I feel this was a must do. As more users gravitate towards digital devices, this was a collaboration that benefited Amazon.com and Apple collectively.

Riding High

Amazon.com closed out Monday's trading at it's highest value in 6 months. The graphs below show Amazon.com's performance against the DJIA and their two leading competitors, Barnes & Noble and Ebay. While out performing them all, Amazon.com still has a way to go to reach its pinnacle stock price over a year ago of roughly $96.00 a share.

Jeff Bezos visits Kentucky

Jeff Bezos, CEO of Amazon.com, spent a week in the Lexington KY distribution center this past week. While many of us were on spring break getting tan or recharging, Jeff, one of the world's richest and very successful CEO's, decided to put in a week of hard work. He listened to employs while working on the warehouse floor and did jobs that no top-level CEO is expected to do. Jeff seems to be a quirky and innovative CEO that respects the people who work with him, as opposed to for him. I am interested to see how Jeff and the rest of the Amazon.com management steers the company as the economic crisis continues and their plans for the eventual up swing that could effect Amazon.com. Jeff did not take interviews or do publicity meetings with anyone, he simply did what any average worker at Amazon.com's distribution warehouse in KY does, he clocked in and went to work. Would you want to work for a company where the CEO takes a week and works along side of you to find out your thoughts on the company and its direction?

Other CEO's and top level management could take some lessons from Jeff. He has been named to the Barron's Top Chief's list along with JP Morgan Chase & Co.'s Jamie Dimon, beating the likes of Steve Jobs and other successful #1's. This is a list of the 30 most respected CEOs worldwide.

B&N Going to Battle

Barnes and Noble recently went to bat against Amazon.com and their e-book shift buy purchasing Fictionwise, a leading retailer of electronic books. The move puts B&N in a stronger position as it begins a strategy for competing against Amazon.com

B&N will also be launching a new e-bookstore in 2009 with efforts to capture some of the rising demand for the e-book market. According to B&N they are developing their e-book retail strategy with no commitment date in sight. This could begin a "new-age" of e-bookstores and technology devoted to improving the e-book market, both of which Amazon and B&N are heavily investing.

Amazon.com's Stock Price $64.77

Amazon.com Enters New Market

After discussing the Boston Consulting Group (BCG) matrix I researched Amazon.com's efforts in increasing areas within their "question mark" region. One such area they have put financial backing towards is their entrance into the used game market.

Now Amazon accepts console game trades in exchange for credit which can be used on their site. This effort to differentiate themselves is forcing competition closer between Amazon.com and GameStop, who offers the same convenience.

Until now, GameStop and Amazon were in strategic groups that were distant in nature. Now GameStop will be going head to head with a company that appears to be a "best cost" company according to Michael Porter's theory of Low Cost and Differentiated business strategies. They are combining low cost products, high customer service, and a differentiated product and market base which is putting Amazon.com in a strong market position.

Amazon.com's SIC Code

Amazon.com does business in a vast number of areas and is a very diverse company. I looked up their standard industrial classification or (SIC) code, which placed them in the (Retail-Catalog and Mail-Order Houses) group under SIC number 5961. Since Amazon.com's main area of business is online sales and orders, this would place them in this category as opposed to another.

Amazon.com Stock Price $64.79

Daily Show Publicity

Jeff Bezos - Founder and CEO of Amazon.com goes on John Stewart's the Daily Show to discuss the release of Kindle 2. Not your typical corporate guru, Jeff comes across as just another laid back tech guy who likes gadgets and inspires creativity. I don't think I have seen a mastermind behind a billion dollar company laugh this hard after being on the Daily Show's hot seat. Just goes to show you that he is not your typical Founder/CEO leading a not so typical company towards success.



Jeff's interview is 14:21 into the show.

Strength, Weaknesses, Opportunities and a HUGE Threat to Amazon.com!

Here it is, Amazon.com's newest threat, the Plastic Logic Reader. Amazon's recent release of the Kindle 2 reading device has e-book readers in amazement, but here is a THREAT that could cut into their market share. It is called the Plastic Logic Reader and is 8.5 X 11 in., essentially a piece of paper. It could challenge Amazon.com further to break new technological limits and create an increase in the type of technology available for digital readers.

CEO Speaks Out

Jeff Bezos, Amazon.com's CEO goes on CNBC to speak to the attributes of their new Kindle 2 reading device and the recent success the company is seeing. Jeff is a highly visible and very hands on oriented CEO and his success at Amazon can be attributed to his curve jumping foresight.

Stock Price ( 61.71) at 3:05pm

#1 in Customer Service

Business Week recently voted Amazon.com as #1 in its annual "Customer Service Champs" rankings. Given that Amazon.com has fared well these past few months, I dug up an article, How Amazon Aims to Keep You Clicking, which described one woman's experience with getting what she paid for.

As Amazon.com continues to play off of its strengths, their customer customization and differentiation, and capitalize on opportunities like their e-book initiative and upcoming release of Kindle 2, it will be interesting to see how it pays for both customer and shareholder.

Stock Price : $63.86 (+3.08% for Friday)

Making moves....

Amazon recently just implemented two strategies that will place them in a strong position entering the last month of Q1.

1) An online Mp3 store
2) E-books offered strictly for the Kindle device will now be offered on a range of mobile phones

These two changes come after criticism that Amazon.com would box itself into its current position and mistakenly place itself at risk. With these new strategies it could see increased profits in the face of this financial crisis, only time will tell.

Board & Financial Transparency

In order for Amazon.com to increase transparency and shareholder understanding, it held a conference call that was webcast live and remains available for 3 months post airing. The call contained forward-looking statements and other material information regarding financial and operating results. Also the company is pushing shareholders to vote online and receive materials electronically in order to cut costs and become more Eco-friendly, which ultimately benefits the shareholder.

Amazon's beating the crisis

While many companies have been hard hit by the financial crisis, Amazon has seen improvements in their bottom line. According to Amazon.com's Q4 financial report, sales were up 18% while 2008 free cash flow grew 16%. On January 29 they posted their Q4 results with descriptive forecasts of these positive results (Q4 Results)

Amazon.com's Stock Price as of Friday Feb 20, 2009 ($63.86)

S&P Raises Amazon's Debt Rating

During my analysis of Maytag and Amazon's financial stability, I ran across this article on bloomberg.com. Amazon.com's investment rating was raised two levels due to the company's sales and profit last quarter. In the mix of the financial crisis, Amazon.com has been able to position itself positively and capture the "bargain shoppers" perusing the Internet for the best value they can find. Although stock performance hit a low of $35.72 per share in Nov., it has climbed to $63.23 as of Feb. 13. This increase can translate into the confidence investors see in Amazon.com's direction and current stability in a shaky economy.

Mission Statement

Surrounding a discussion on mission statements and their effectiveness, we set out to find our individually chosen company's mission. In a letter to shareholders in 1997, or better known as Amazonians, they outlined 5 focuses towards success:

1. Focus relentlessly on their customers
2. Make bold investment decisions in light of long-term leadership considerations rather than short-term profitability
3. Focus on cash
4. Work hard to spend wisely and maintain our lean culture.
5. Focus on hiring and retaining versatile and talented employees, and weight their compensation to significant stock ownership rather than cash.

Amazonians can find comfort in knowing that their diversified board consists of 9 directors and 12 officers, with Jeffrey P. Bezos being the President, CEO and Chairman of the board. Official info on Amazon's Investor Relations can be found at: Amazon

Amazon Introduces Kindle 2

Amazon launched Monday, Feb. 9, a beta version of its electronic portable reading device, the Kindle 2. A little over a year ago, Amazon introduced a portable reading device that would all readers to store up to 1,000 books in a digital format. With a high contrast screen, long battery life and online capabilities to Amazon.com's endless book inventories, the Kindle and Kindle 2 are breaking into the electronic book market. 

Kindle 2's release has already seen high responses on blogs and been received with mixed reviews. Those who have currently ordered a Kindle 1 were greeted with a message from Amazon stating that they will have the first opportunity at purchasing the Kindle 2, while those on back order have been automatically upgraded.

Specs and info on Kindle 1 & 2