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Amazon 2018: Business Strategy and Financial Strategy
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Reference: F-945-E
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Year: 2017
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Number of pages: 14
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Geographic Setting: Asia, Estados Unidos, Europa
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Publication Date: Oct 2, 2019
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Source: IESE (España)
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Type of Document: Case
Description
Description of Amazon's business and financial situation based on Amazon's 2017 annual report. Comparatives with competitors. Analysis of Amazon's business and financial strategy.
Learning Objective
1. Analysis of Amazon's strategy and how it is reflected in its financial statements. Realize that the P&L and a balance sheet are always the consequence of the strategy.
a) Business or product strategy, reflected mainly in the P&L.
b) Financial strategy, reflected mainly in the balance sheet, but also in the P&L.
2. Identify the risks of that strategy (or what could go wrong).
3. The case is also used to present a situation of a negative NFO (suppliers finance receivables and inventory and partially the fixed assets).
4. Other (possible) objectives of this case:
a) Show how to reduce a long balance sheet to a short one that is concise and easy to understand.
b) Show the futility of financial ratios if they are used in isolation without looking at the P&L and balance sheet.
c) Show how to analyze a conglomerate: a company that operates in many businesses.
d) Discuss if a big conglomerate like Amazon may become a threat to the economy and whether it should be regulated.