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Amazon Prime Case Study

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Thanks to Amazon Prime its revenue will grow more than expected. RBC Capital Markets expanded its value focus on Amazon to $705 from $650 taking into account force in its Amazon’s Prime business. It was exchanging at more than $524 a share on Friday. The amount of people using Amazon Prime has raised from 25 percent in 2013 to 40 percent today. Between U.S. and global Prime subscribers Amazon has roughly 110 million subscribers. According to RBC survey, 49 percent of first-year Prime members and 68 percent of year-four subscribers spend the minimum of $800 on Amazon every year. Prime is so attractive to customers because most of the products offer two day shipping. Although the company was founded in 1994, Amazon Prime was only founded in …show more content…

The Canadian investment bank, RBC has raised the price target on Amazon from $650 to $705 based on energy in its Amazon Prime business. Last week it was trading at more than $524 a share. The firm has an annual consumer survey and for its third review U.S. Prime has gone from 25 percent of customers in 2013 to 40 percent today. The firm strongly believes they have 50 million U.S. Prime subscribers as well as 60 to 80 million global subscribers. Having a significant amount of subscribers is important because the longer they are customers the more they will spend. Mahaney said, “RBC’s survey indicates that 49 percent of first-year Prime members and 68 percent of year-four subscribers spend at least $800 on Amazon each year.” In addition he told CNBC’s “Squawk on the Street” that the revenue most likely would be sustainable for longer than everyone might realize. A factor behind an increase in domestic and international revenue growth was Amazon Prime, according to a second quarter conference call. Second quarter 2015 sales surpassed prospects by increasing 20 percent from the previous year. As Amazon offers more products for two day shipping they are attracting more …show more content…

Amazon is categorized into three general sections: media, electronics and other merchandise. Since Amazon is the largest Internet Company they take a lot of profit away from other Internet companies as well as stores. Businesses such as eBay, Google’s Play Store, Best Buy, Staples, Target, etc. are suffering because they simply cannot compete with Amazon Prime. These other companies need to find their own strategy in order to compete with Prime’s two-day shipping. If these companies are aware of Amazon’s drastic increase in profit then they should already be thinking of ways to improve their own business. For example they could give out more promotional sales and

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