AMAZON FINANCIALS 1
Case Study Part 3: NPV – Amazon Financials
Vicki L. Thompson
Department of Business, Liberty University
BUSI 690: Policy and Strategy in Global Competition
Respectfully submitted to: Dr. Robert Waldo
August 12, 2022
Author Note
Vicki Thompson
I have no known conflict of interest to disclose.
Correspondence concerning this article should be addressed to Vicki Thompson
Email:
,AMAZON FINANCIALS 2
Case Study Part 3: NPV – Amazon Financials
Executive Summary
Amazon is a global market leader in e-Commerce. To date, they have over 220 million
subscribers worldwide. They also employ over 1.5 million employees. Amazon maintains a 40%
market share in e-Commerce sales. Their main revenues through Prime, Amazon Web Services,
and marketplace are part of their core business. Amazon’s mission statement is “to be Earth’s
most customer-centric company.” To keep true to their mission statement, they must continue to
gain ground in the highly competitive retail industry. There are two strategic options that will
improve Amazon’s competitive advantage. First being identified as Market Development.
Amazon has been given the option of expanding its operations in burgeoning foreign economies.
One of the most promising and fastest growing opportunities to expand in is the country of India.
India is not a new opportunity for Amazon, and as with any new opportunity, there lies
disadvantages of some sort. Unfortunately, these disadvantages have hindered the progress of
expansion. India still lies in the forefront for Amazon because of the extreme growth potential.
The second strategic option that will be discussed is how Amazon will double down on one of its
core capabilities to vertically integrate into the logistics and transportation industry. Both
strategies give way for Amazon to reach the potential to improve their brand position and market
strength against their competitors, and increase their customer value. Advantages and
disadvantages of each project will be discussed and reviewed for accuracy. Recommendation for
strategy will be visited based on the financial analysis and impact of future cash flows on current
operations.
, AMAZON FINANCIALS 3
Alternative Strategies
Market Development in India
Amazon’s operations in India first began in 2013. Nine years and $7.5 billion dollars
later, Amazon has yet to develop a strong foothold in India due to long-standing laws restricting
e-Commerce firms from holding inventory or selling items directly to consumers. To evade these
laws, e-Commerce firms like Amazon have worked through other local firms to hold their
inventory (Sharma, 2021). In 2018, India lawmakers added even more restrictions on foreign e-
Commerce firms by banning exclusive sales and restricting discounts (Mahipal & Shankaraiah,
2019). Then to add insult to injury, Amazon filed a petition in the Singapore International
Arbitration Court against Future Group, one of the largest retail firms in India for breach of
contract.
Even with these hurdles, there is still a lot of potential in India. They have the second
highest number of internet users in the world at roughly 580 million users. They are behind
China, who has 890 million users (Shao et al., 2018). Online sales in India account for only 1.6%
of total retail sales. However, China sits at 16% and 13% globally. The retail market in India is
projected at $1.265 trillion with an e-Commerce industry projection of $220 billion by 2026, and
a category growth rate of 40% (Mishra & Koul, 2021). A few of the factors responsible for the
growth in India is increased smartphone usage, the rise of a younger more tech savvy population
and a rapidly growing middle-class. Unfortunately, Amazon’s growth in India is being blocked
by India’s officials that aim to protect the local economy of small businesses trying to survive
and where 93% of retail sales are from brick & mortar transactions. One strategy Amazon is
using to improve its presence, position and power in India is to help small and medium-sized
businesses in cities, towns and villages take advantage of the global economy by digitizing their
Case Study Part 3: NPV – Amazon Financials
Vicki L. Thompson
Department of Business, Liberty University
BUSI 690: Policy and Strategy in Global Competition
Respectfully submitted to: Dr. Robert Waldo
August 12, 2022
Author Note
Vicki Thompson
I have no known conflict of interest to disclose.
Correspondence concerning this article should be addressed to Vicki Thompson
Email:
,AMAZON FINANCIALS 2
Case Study Part 3: NPV – Amazon Financials
Executive Summary
Amazon is a global market leader in e-Commerce. To date, they have over 220 million
subscribers worldwide. They also employ over 1.5 million employees. Amazon maintains a 40%
market share in e-Commerce sales. Their main revenues through Prime, Amazon Web Services,
and marketplace are part of their core business. Amazon’s mission statement is “to be Earth’s
most customer-centric company.” To keep true to their mission statement, they must continue to
gain ground in the highly competitive retail industry. There are two strategic options that will
improve Amazon’s competitive advantage. First being identified as Market Development.
Amazon has been given the option of expanding its operations in burgeoning foreign economies.
One of the most promising and fastest growing opportunities to expand in is the country of India.
India is not a new opportunity for Amazon, and as with any new opportunity, there lies
disadvantages of some sort. Unfortunately, these disadvantages have hindered the progress of
expansion. India still lies in the forefront for Amazon because of the extreme growth potential.
The second strategic option that will be discussed is how Amazon will double down on one of its
core capabilities to vertically integrate into the logistics and transportation industry. Both
strategies give way for Amazon to reach the potential to improve their brand position and market
strength against their competitors, and increase their customer value. Advantages and
disadvantages of each project will be discussed and reviewed for accuracy. Recommendation for
strategy will be visited based on the financial analysis and impact of future cash flows on current
operations.
, AMAZON FINANCIALS 3
Alternative Strategies
Market Development in India
Amazon’s operations in India first began in 2013. Nine years and $7.5 billion dollars
later, Amazon has yet to develop a strong foothold in India due to long-standing laws restricting
e-Commerce firms from holding inventory or selling items directly to consumers. To evade these
laws, e-Commerce firms like Amazon have worked through other local firms to hold their
inventory (Sharma, 2021). In 2018, India lawmakers added even more restrictions on foreign e-
Commerce firms by banning exclusive sales and restricting discounts (Mahipal & Shankaraiah,
2019). Then to add insult to injury, Amazon filed a petition in the Singapore International
Arbitration Court against Future Group, one of the largest retail firms in India for breach of
contract.
Even with these hurdles, there is still a lot of potential in India. They have the second
highest number of internet users in the world at roughly 580 million users. They are behind
China, who has 890 million users (Shao et al., 2018). Online sales in India account for only 1.6%
of total retail sales. However, China sits at 16% and 13% globally. The retail market in India is
projected at $1.265 trillion with an e-Commerce industry projection of $220 billion by 2026, and
a category growth rate of 40% (Mishra & Koul, 2021). A few of the factors responsible for the
growth in India is increased smartphone usage, the rise of a younger more tech savvy population
and a rapidly growing middle-class. Unfortunately, Amazon’s growth in India is being blocked
by India’s officials that aim to protect the local economy of small businesses trying to survive
and where 93% of retail sales are from brick & mortar transactions. One strategy Amazon is
using to improve its presence, position and power in India is to help small and medium-sized
businesses in cities, towns and villages take advantage of the global economy by digitizing their
