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Examples Of Value Based Management In Amazon

9972 Words40 Pages

ACADEMY OF ECONOMIC STUDIES
FACULTY OF BUSINESS ADMINISTRATION IN FOREIGN LANGUAGES

COMPANY ANALYSIS BY CREATING VALUE INDICATORS
- BACHELOR THESIS -

Scientific Coordinator: Author:
Univ. prof. PhD. ION ANGHEL IOANA OPRIȘAN

Bucharest
2015
Contents
Introduction
Acknowledgements
1. Value-based management and value indicators 3
1.1. The necessity for value-based management 3
1.2. Value indicators 6
2. Consumer value at Amazon.com 10
2.1. Amazon.com history 10
2.2. Business Operations 15
2.3. SWOT Analysis 18
2.4. Porter Analysis 22
3. Shareholder value at Amazon.com 25
3.1. Financial ratios 25
3.2. Value Indicators 28
4. Conclusions 37
Resources

Introduction

Amazon is a well-known corporation surrounded …show more content…

Capital structure and dividends policy are established based on how they can create value, and not on revenue or security growth.
Performance measurement, setting objectives and managers remuneration become influenced by the change in investors capital rather than the change in accounting capital. Understanding and adapting to this new managerial concept requires a company to overcome educational and motivational challenges. Changing an organization’s culture is quintessential to achieving the main goal: maximizing shareholder value. Re-educating and changing personnel reward systems are necessary for a good implementation of the value based management concept, which is oriented on obtaining value in the long-term.

Value based management, treated as a new philosophy, forces leaders to shift their way of thinking and to use new strategic and control tools, rather than abide to plans guided by accounting budgets which aim to increase certain performance indicators that can be manipulated, such as profit or …show more content…

This means that they are dependent on technology to be able to reach customers and therefore their area of activity is limited to the technological resources available. Their diversification strategy has caused some brand confusion, albeit a good strategy to minimize risk, but it has also caused the company to move away from their core competencies. While growth is desirable, some limitations have to be imposed before it becomes too costly. Nevertheless, the company’s strongest weakness, also criticized by its own investors and analysts everywhere, is their free shipping policy and their very small operating and profit margins. Free shipping is a very customer oriented incentive that most investors see as an unwanted trade-off. Furthermore, the company has been reporting increasing revenues, but decaying profit and operating

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