Amazon.com
My assessment is that Amazon has long-term viable business model but needs to fine tune model. Amazon.com has multiple core assets that enable it to merchandise goods such as books, music etc. Amazon's strategy is based upon selling consumer products at competitive prices. Amazon as well acts as a direct seller of products the company also allows third parties such as individuals and businesses to retail their products on the site through its auctioning, Z-shop. The company also operates other businesses website by utilizing the organizations services, features, and technologies. Amazon business is continually evolving from the leading online book retailer to a variety of product categories. Through the addition of new businesses, Amazon.com operations beco
SWOT AnalysisSTRENGHTS WEAKNESSES OPPORTUNITIES THREATSStrong Internet Brand Weak strategy Implementation Multi-merchant strategy Competition IntensifyingAmazon Business Model New businesses add complexity to the company Underdeveloped International markets Aggressive pricing and marketing from competition Clouded performance Third Party Sellers Inventory Risk Problem #2Yes I do agree with Ravi Suria's analysis of the credit risks associated with Amazon's bonds. Amazon had a debt to equity ratio of 82 in year 2000; 5. As business streams continue to develop, distribution methods become a concern adding further costs and reducing margins further. Without fresh injections of capital from shareholders or lenders, Amazon can quickly find that it is insolvent. At worst, the sales growth is not be sustained, and large quantities of stock (and staff) end up idly sitting in warehouses, causing a devastating impact on cash flow. Healthy firms should generate more cash from their customers than they spend on operating expenses; Suria's argument is that this will not be the case for Amazon in the near future. Based off these ratios Amazon is in serious trouble since they are leveraged too much. If this occurs over a sustained period, it's a sign that cash in the bank may become dangerously low. 51Year 1998 Debt to Equity Ratio = Total Debt/ Total Equity 348/ 138 = 2. Suria's analysis was that eventually Amazon's cash payments would exceed its cash receipts, making cash flow negative. Cash is the lifeline of the company and is a great indicator of a company's health. There could be a delay between when the company forks out cash for these business costs and when it collects cash from resulting sales.
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