chapter 7: amazon: an empire stretching
from cardboard box to kindle to cloud
false (many predicted that larger traditional retailers would beat Amazon when they
transitioned online) - answer-T/F: tech industry research firms predicted that Amazon would
be successful from the start
false (did not turn a profit the first 7 years and lost over $3 billion) - answer-T/F: Amazon was
wildly profitable in the first seven years
true - answer-T/F: Bezos plowed cash into expanding warehousing capacity, building e-
commerce operations worldwide, growing the Internet's most widely used cloud computing
platform, leading the pack in e-readers, developing the first credible threat to Apple's
dominant iPad in tablets, launching video streaming/gaming devices for television, and
defining a successful new product category with Echo, a voice-response speaker platform
despite initial struggles
Prime Air - answer-Amazon's fleet of cargo jets (along with hundreds of tractor trailers, an
expanding local delivery infrastructure, a foray into trans-oceanic shipping, and a much
publicized commitment to delivery by an unmanned drone)
true - answer-T/F: Amazon has begun operating campus bookstores
Amazon Go - answer-Amazon-branded stores that include Amazon Books concept stores that
are physical retailers with no checkout convenience
customers scan an app, tied to a credit card, when entering
image recognition, motion detection, weight sensors, and other advanced artificial
intelligence can tell what a customer picks up, and charges them when they leave the store
true - answer-T/F: The commercial viability of this technology underscores points on the
impact of machine learning fueled by cloud-based server farms (and increasingly powered
by special graphics processors, ASICs and FPGAs)
true - answer-T/F: a store without registers can have a smaller footprint, or can carry more
items, and could operate with fewer, but more highly skilled workers.
Whole Foods - answer-$13.7 billion acquisition of this firm introduced Amazon to the grocery
business
false - answer-T/F: the Fire Phone, Amazon's first attempt at creating a smartphone
competitor to iOS and Android was successful
Kmart (also the parent of Borders) - answer-Amazon's first profit was posted the week ______
went bankrupt
cloud computing - answer-the main investment that contributed to Amazon's profit and
delivers over half of the firm's operating income
operating income - answer-income you generate through your operations
,- sales through daily business operations minus related expenses
-net income is overall "profit" but can include things such as income from investments,
expenses related to financing costs or taxes, or one-time income or expenses such as a gain
from a sales or a corporate fine
long term - answer-Bezos makes _______ ______ goals and plants seeds for future success
Blue Origin - answer-one of Bezos's personal investments, a commercial rocketry and
aviation firm that intends to send humans into space and has already secured payload
delivery contracts with Nasa
true - answer-T/F: Bezos invested in Twitter and Uber and bought the Washington Posst
true - answer-T/F: Amazon is the world's most valuable retailer and the largest, most
profitable provider of cloud computing services
twice - answer-while sales are still a fraction of Walmart's, Bezos's firm is worth ________ as
much as the world's largest physical retailer, and is growing far faster
bargaining power - answer-Amazon's crushing performance in online commerce, the e-book
industry, and cloud computing have created a set of resources (data, scale, network effects,
and more) that contribute to its enormous ________ _______ with suppliers and partners, has
made it the first stop for shoppers and the first choice for selling partners, allows the firm to
gather an unprecedented amount of data, and has created a distribution footprint that's
difficult to imagine any other firm rivaling
true - answer-T/F: Amazon is under intense scrutiny from antitrust regulators, workplace
advocates, privacy groups, lawmakers, and a public wondering if it's justifiable that a firm
earning $11 billion in profits paid $0 in federal taxes (and in fact, received government
rebates) over two years
Seattle - answer-where Amazon headquarters is located
smaller, faster, bigger (than Walmart, Target, Best Buy, Macy's, Nordstrom, Kohl's,
JCPenney, and Sears combined) - answer-Amazon's revenues are _______ (smaller/larger)
than Walmart, Amazon is growing _______ (slower/faster) than Walmart, and Amazon has a
market cap _________ (bigger/smaller) than Walmart
true - answer-T/F: In Sept 2018, Amazon's market cap topped $1 trillion for the first time,
and by January 2019 the firm was the most valuable firm on the planet
large selection, customer experience (convenience), lower prices - answer-three pillars of
Amazon's business
competitive advantage - answer-the three pillars of Amazon reinforce one another and work
together to create several additional assets for ________ _______
brand - answer-exceptional customer experience fuels a strong ______ that makes Amazon
the first place most consumers shop online
scale - answer-having more customers allows the firm to provide more products, creating
______, which provides the firm with negotiating leverage to secure lower prices and longer
payment terms
, vertically integrating - answer-the larger the business, the easier it is for Amazon to justify
________ ________ to become its own shipper in some circumstances - keeping prices and
other costs down while speeding delivery
third party sellers - answer-Amazon opens its website up to ______ _____ _____ - a dynamic
where more customers attract more sellers, which attracts still more customers
network effect - answer-virtuous cycle of buyer-seller growth is a two sided ______ -_______
data asset - answer-Amazon's activity allows the firm to gather an immensely valuable _____
_____
true - answer-T/F: each digital movement is logged, and the firm is constantly analyzing
what users respond to in order to further fine-tune the customer experience, make more
accurate demand predictions, squeeze out costs, and drive cash flow
"Get the CRAP out" (a staffer once spent twenty minutes packaging up a folding chair—a
process way too inefficient for a firm with razor-thin margins. To fix the situation, Amazon
worked with the vendor to get chairs in prepackaged, ready-to-ship boxes, keeping the
product available to customers while cleaving costs) - answer-an effort to increase efficiency
and reduce costs for Amazon that focused on products that "can't realize any profits"
code - answer-to automate profit pushing hyper efficiency in warehouses, Amazon utilized
____
inventory process - answer-When suppliers ship new products to Amazon, items are placed
and prepped so inventory is ready to fulfill customer orders as soon as possible. Dozens of
workers examine the incoming shipments for defects. If a problem is spotted in the receiving
area, the staffer flips an adjacent warning light from green to red, signaling a warehouse
"problem solver" to swoop in, deal with the issue, and make sure additional items in the rest
of the product supply can keep flowing in. Shelvers stand on platforms while Kiva robots line
up for restocking, bearing shelf towers with open bins stacked nine-or-more slots high along
on all four sides. Robots position shelves to expose the correct side for inventory placement.
Shelvers scan products that are added to inventory, placing each in a specific location on a
specific shelf that is also scanned.
true - answer-T/F: To foster improvement, warehouse movements are continuously logged
and productivity is tracked and plotted, and high performing workers are praised throughout
the day
robots - answer-replaced humans to stock products and pick orders in warehouses
- they bring shelves to workers (handle shelves stacked with about 750 lbs of goods, minus
the bulkiest items)
Kiva Systems - answer-robots powering redesigned fulfillment centers came from ______
_______, a MA based firm that Amazon bought
Robo Stow - answer-a massive robot arm used to hoist pallets of products from one floor to
another
shipping process - answer-When an online order is sent to a fulfillment center, pickers wait
for shelf-carrying robots to line up with precisely those items that the customer has
requested. A monitor near the picker indicates the item that's needed and where it can be
found on the robot-conveyed shelf. Humans are still needed to grab an item off the shelf, do
