Feasibility Study Amazon Go Example Work for Students PDF

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Feasibility Study:AMAZON GOBuentiempo, Jazzel Anne J.Cabanero, HazelCalixtro, Christine Joy B.Camu, Kyle P.Cantara, Jana Mae A.Castromayor, ErickaFelicite, DequinaDuran, Carsel C.Fajardo, Vincent S.TABLE OF CONTENTS I. Executive Summary...................................................................

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Feasibility Study:

AMAZON GO Buentiempo, Jazzel Anne J. Cabanero, Hazel Calixtro, Christine Joy B. Camu, Kyle P. Cantara, Jana Mae A. Castromayor, Ericka Felicite, Dequina Duran, Carsel C. Fajardo, Vincent S.

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TABLE OF CONTENTS I. Executive Summary……………………………………………………………………….… 3 II. Market Feasibility…………………………………………………………………………... 5 III. Technical Feasibility………………………………………………………………………. 13 IV. Financial Feasibility………………………………………………………...….…………. 17 V. Organizational Feasibility………………………………………………………………….. 24 VI. Conclusion………………………………………………………………………………… 27

Appendix………………………………………………………………………………………. 29 References……………………………………………………………………………………... 30

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I. EXECUTIVE FEASIBILTY

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Amazon is an American electronic commerce and cloud computing considered to be the largest online retail store in terms of revenue and market capitalization. It was founded and owned by Jeff Bezos, the CEO, on the 5th of July, 1994. The company is mainly focusing in new disruptive technology such as: Amazon Web Service, Alexia, and Amazon Go.

Vision of Amazon: “To be Earth’s most customer-centric company, where customers can find and discover anything they might want to buy online.” The Amazon is determined to be company of the future by concentrating their efforts on three objectives:   

Global Reach Customer Prioritizing Widest Selection of Products.

Mission of Amazon: “We strive to offer our customers the lowest possible prices, the best available selection, and the outmost convenience.”

How to Use Amazon Go To start using Amazon Go, you need to have a membership account on Amazon, a version of either an Android or iOS phone, and download the Amazon Go App. There is cost to download the app, and it is intuitive to use. Amazon is a company that focus on innovation. Each year the company works on dozens of projects that aim to change our daily lives. According to Deborah Weinswig, a Chartered Professional Accountant and Manager Director at Fung Global Retail & Technology, Amazon Go is an opportunity for the company because it contributes to the success of Amazon in many ways.

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II. MARKET FEASIBILTY

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Industry Overview Amazon is known for using technology innovation and large size to disrupt well-established businesses. According to sales and market capitalization, it is the largest e - commerce marketplace, AI assistant provider, live-streaming platform, and cloud computing platform. Amazon is the world's most profitable Internet corporation. It is the United States' second largest private employer and one of the world's most valuable corporations. Amazon has the largest global brand valuation as of 2020. Cloud computing, e-commerce, artificial intelligence, consumer electronics, entertainment digital distribution, and self-driving cars are all businesses that Amazon is involved in. Amazon's Amazon Prime Video, Amazon Music, Twitch, and Audible businesses offer video, music, and audiobook downloads and streaming. Amazon includes a publishing division called Amazon Publishing, a film and television studio called Amazon Studios, and a cloud services division called Amazon Web Services. It makes Kindle ereaders, Fire tablets, Fire TV, and Echo gadgets, among other things. Ring, Twitch, Whole Foods Market, and IMDb are among the companies it has acquired throughout the years. MetroGoldwyn-Mayer, a film and television studio, is currently being purchased by Amazon. We researched the 5 industries Amazon will disrupt in the next 5 years. Pharmacies, small business lending, logistics, groceries, and payments as well as 4 industries where Amazon’s efforts are more nascent could go after. The disruptive possibilities in these industries home & garden, insurance, smart home, and luxury fashion remain speculative for now, but with Amazon’s scale and advantages, they could soon be a reality. Market Strategy Amazon's business strategy is based on a single goal: to seamlessly connect the digital and physical shopping experiences in order to be a part of every single purchase made. Strategic customer-centric initiatives, data tactics, and technology support are all part of our retail marketing services and solutions. Amazon markets its products using the high runner strategy. This strategy makes use of data to determine which products are in high demand in each category. Amazon's pricing algorithm then competitively prices those products and bids heavily on advertisements to draw people to these products. Amazon marketing strategy relies on the following four pillars: 1. Providing the most diverse range of products. The world's largest internet retailer by revenue offers hundreds of millions of products. The majority of products available on the Amazon platform, 58 % are from third-party sellers. 2. Making use of a user-friendly interface. The tech giant has an intelligent interaction that includes actionable insights and recent browsing history, among other features. 3. Scaling from small to large is simple. The e-commerce and cloud computing firm has extensive experience and expertise in scaling from small to large. This factor is critical in discovering new business segments. 4. Taking advantage of affiliate materials and facilities. To date, the tech behemoth has fully utilized affiliate labor and facilities to contribute to the company's reputation. Target Market Amazon segmentation, targeting, and positioning refers to a series of efforts aimed at identifying and developing products and services that appeal to distinct categories of consumers.

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Segmentation is the process of dividing a population into groups based on certain traits, whereas targeting is the process of selling products to specific groups found as a result of segmentation. The term "positioning" refers to the process of selecting the marketing mix that is most matched to the target client segment. Amazon mainly uses the following two types of positioning: Multi-segment positioning. Amazon has a diverse selection of products and services, allowing it to profit from multiple market segments at the same time. Especially, the online retail behemoth sells about 120 million products, catering to a diverse spectrum of customer demographics. Adaptive positioning. The online retail giant keeps an eye on changes in the external marketplace and responds to rising customer expectations by repositioning products and services on a regular basis in response to market developments. Anticipatory positioning. This refers to targeting a market sector with limited competition with the expectation of increased turnover in the future. A good example of anticipatory positioning is Amazon Web Services (AWS). “No one asked for AWS,” says Jeff Bezos, the company's founder and CEO. Nobody. It turns out that the world was ready and hungry for something like AWS but didn't realize it.” Amazon Sage Maker, Amazon Comprehend, and Amazon Recognition are some of the company's other anticipatory positioning applications. The following table illustrates Amazon segmentation, targeting and positioning:

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Type of Segmentation Amazon target customer segment segmentation criteria

Geographic

Demographic

Region

More than 100 countries

Density

Urban and rural

Age

14 and older

Gender

Males & Females

Life-cycle stage

Bachelor Stage young, single people not living at home Newly Married Couples young, no children Full Nest I youngest child under six Full Nest II youngest child six or over Full Nest III older married couples with dependent children Empty Nest I older married couples, no children living with them Empty Nest II older married couples, retired, no children living at home Solitary Survivor I in labour force

Occupation Behavioural

Degree of loyalty

Solitary Survivor II retired Students, employees and professionals ‘Hard core loyals’ ‘Soft core loyals’

‘Switchers’ Benefits sought Widest range of products Convenience of online purchasing Personality

Competitive prices Easy going, determined and ambitious

User status

non-users, potential users, first-time users, regular users, or exusers of a product

Psychographic Social class

All social classes: lower class, working class, middle class and upper class

Lifestyle

Resigned, Struggler, Mainstreamer, Aspirer, Succeeder, Explorer Reformer 8

Competition Online Stores This category comprises Amazon's e-commerce website's goods and digital media sales. Customers can choose from a large range of durable and consumer items, as well as digitalformat products like e-books, films, software, music, and games. Amazon's competition in this segment includes Light in the Box Holding Co. (LITB), Overstock.com (OSTK), VIP shop Holdings Ltd. (VIPS), JD.com (JD), Wayfair Inc. (W), and Etsy (ETSY).

Physical Stores Despite the fact that online sales account for the majority of Amazon's revenue, its 2017 acquisition of grocery retailer Whole Foods Market significantly increased the company's physical retail footprint. 1 Amazon also operates Amazon Books, Amazon 4-Star, Amazon Go, and Amazon Pop Up, which are all physical businesses. In the physical stores category, Amazon competes with Best Buy (BBY), Costco (COST), Target (TGT), Walmart Inc. (WMT), and Big Lots (BIG). Subscription Services Amazon offers a number of subscription services. Amazon Prime, its most popular paid subscription service, has 150 million members worldwide as of January 2020. Subscriptions for e-books, audiobooks, digital video, and digital music are also available from the company. Amazon's main competitors in the subscription services sector are media game-changer Netflix (NFLX); Apple (AAPL) with iTunes; and Google (GOOG) with its Play Store. Amazon Web Services (AWS) The company's cloud platform, Amazon Web Services (AWS), includes 175 services such as machine learning, artificial intelligence, storage, and analytics. Startups, corporations, and government agencies are among the AWS customers. Amazon's main competitors in the web services sector are Alibaba Group (BABA), Oracle (ORCL), Microsoft (MSFT), International Business Machines Corporation (IBM), and Google (GOOG). Amazon uses cost leadership as its generic strategy for competitive advantage. Minimization of operational costs is the objective in this generic competitive strategy. For example, Amazon.com uses advanced computing and networking technologies for maximum operational efficiency, which translates to minimized costs.

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Amazon was successful in creating a consumer paradise. They charge much less and promise much more than other stores and platforms: the best selection by combining a retail and a marketplace business, the best price by using the "buy box," and the quickest delivery by offering FBA to their sellers. Amazon is a well-diversified firm with a number of lucrative income sources. The corporation specializes in disruptive innovation and has the financial resources to fund ventures into new industries in order to steal market share from competitors. Amazon's sales increased by 21% to $87.4 billion in the fourth quarter of 2019. The company reached a market capitalization of $1 trillion for the first time ever in September 2018. Large-Scale Infrastructure Ensures Quick Delivery While Raising Entry Barriers for Other ECommerce Players: Amazon's extensive network of delivery, sortation, and fulfillment centers brings the company even closer to the customer and makes same-day delivery much more feasible.

Amazon Forecast Pricing You only pay for what you use with Amazon Forecast; there are no minimum fees or upfront commitments. There are three different types of costs in Amazon Forecast: Generated forecasts: A forecast is a projection of future values for a single time series over a given period of time. For example, whether you estimate the next 10 days or the next 10 years, daily client demand for a blue shirt at a single store location is one forecast (i.e., one-time series). Projections are priced in 1,000-unit increments (rounded up to the nearest thousand), but you'll clearly have multiple models producing different forecasts. Furthermore, projections are generated by default at three quantiles (10%, 50%, and 90%), increasing your total forecasts by a factor of three. You can always use the Create Forecast API to alter the default quantiles (between 1 and 5) and only pay for particular forecasts. For example, demand for each product sold by a retailer may be forecasted at the store level. A retailer with 500 products and 20 locations will need to generate 10,000 forecasts (500 products x 20 locations = 10,000 total forecasts). Because Amazon Forecast generates forecasts at three quantiles by default, the preceding example will generate 30,000 unique forecasts. Amazon Forecast bills in 1000-unit increments, so in this case you will be charged for 30 forecasts at $0.60 each, for a total of $18. If you use the Create Forecast API to select 5 unique quantiles (say, 15, 30, mean, 75, and 99, overriding the defaults), you will be billed for 50 forecasts for a total of $30. Data storage: Amazon Forecast charges a fee for each GB of data stored and used to train your models. Training hours: Cost per hour of training for a custom model based on data supplied by customers. Training time does not equal run time, in some cases. Amazon Forecast will run multiple jobs in parallel, each requires different set of compute resources, like Auto ML, HPO jobs. Training time includes time spent developing predictors and forecasts.

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Free Tier As part of the AWS Free Tier, you can get started with Amazon Forecast for free today. For the first two months after first using Amazon Forecast, the Free Tier includes: Generated forecasts: Up to 10K time series forecasts per month Data storage: Up to 10GB per month Training hours: Up to 10 hours per month Pricing tables Cost Type

Pricing

Generated forecasts

$0.60 per 1,000 forecasts

Data storage

$0.088 per GB

Training hours

$0.24 per hour

Pricing examples Cost Type

Pricing

Usage Cost

100k time series forecasts

$0.60 per 1,000 forecasts

$180 (100 forecast unit’s x 3 quantiles x $0.60 per forecast unit)

5 GB of data stored

$0.088 per GB

$0.44 (5 GB x $0.088 per GB)

20 training hours

$0.24 per hour

$4.80 (20 hrs. x $0.24 per hr.) Total Cost = $185.24

Pricing example 1 - Product Demand Forecasting Assume you own a clothing company with 2,000 items sold in 50 stores around the world. Each item and store location combination equals one-time series, so you'll have 100k (2000 items x 50 stores) time series to forecast. Assume you need to upload 5 GB of data for this task, and that a model with this dataset will take about 20 hours to train with the default number of quantiles.

Pricing example 2 - Cash Flow Forecasting

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Cost Type

Pricing

Usage Cost

2,000-time series forecasts

$0.60 per 1,000 forecasts

1 GB of data stored

$0.088 per GB

$0.088 (1 GB x $0.088 per GB)

4 training hours

$0.24 per hour

$0.96 (4 hrs. x $0.24 per hr.)

$2.40 (2 forecast unit’s x 2 quantiles x $0.60 per forec unit)

Total Cost = $3.448 Assume you run a financial consulting firm. Your investors and developers 2,000 ice cream shop and wants to forecast a cash flow of each. Each cash flow and shop location combination correlates to one-time series, so you'll have 2,000 (1 cash flow x 2,000 shops) forecasts. Assume you need to upload 1 GB of data for this task, that a model with this dataset will take about 4 hours to train, and you'd like to forecast results at two custom quantiles, 75% and 99%.

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III. TECHNICAL FEASIBILTY

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The Amazon go headquarters location is in Seattle, Washington, United States and they are also serving in Seattle, Chicago, San Francisco, New York, London. 29 is the total number of stores that they have in the U.S. and has also now launched the first store outside the U.S. with the technology, this is in the Ealing, UK and is called Amazon Fresh, the online grocery. Amazon go are using an automatic technology “Just walk Out technology” a combination of artificial intelligence, computer vision, and data pulled from multiple sensors to ensure customers are only charged for the stuff they pick up. Cameras are used to track items as they're taken from shelves. They have detected all the things that are customers doing inside especially once that they step in on the store, they have this product will be detected if it is been returned of where they take it from shelves and keep track of the in a virtual cart. And once the Customer are done shopping inside the store they can just leave, and later on the receipt and the charge will take from their Amazon Account. The amazon go have a shopping app in apple store, Google play, And Amazon Appstore, this way is easier to people to shop because only need to do is download it on your phone, and once you arrive at their store, open the app, scan the QR code and you can put your phone away and, feel free to browse and shop at their store, and once you are done you don’t need to check out and you can replace items any time. In the patent application of the Amazon in early 2015, revealed the details about the technology. It has the facial recognition and user information, which may include images of the user, details about the user like height and weight, user biometrics, a username and password, even user purchase history. For the supply chain manager, the technology promises to almost completely remove the need for inventory checks while the store can know when an item is out-of-stock. Theoretically, if there are no more bananas on the shelf, the staff/employee of the store could immediately be informed and restock the item, reducing losses from potential lack of sales. Amazon fresh products is coming from local amazon warehouses, then shipped by air/ or truck to your delivery location.

The main technical considerations made with regards to this study were:     

The technology was created in house and patented to protect it, which lowers costs and allows for licensing of the technology with a potential return of $850 million. Microsoft, Walmart, Costco, and Alibaba among others are developing similar technology and are expected to reach Amazon’s level of technological proficiency within a few years. The technology required to access an Amazon Go store creates an “exclusive” environment accessible only to the technologically understanding. Amazon could use the customer information gained from Amazon Go shoppers to further enhance the customer experience at Amazon and Amazon Web Services. Testing of the software and machine learning are continuing as real time tests by customers have shown it is possible to “purchase” items without paying for them.

Presentation of Amazon Go Technology:

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Hardware

Software

Person Smart device like smart phone.

Shelf Cameras, pressure sensors, infrared sensors, scales, volume displacement sensor, light curtains, etc.

Amazon Go app Warehouse Management System (WMS)

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Entrance/Exit

2D barcode Customized system

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IV. FINANCIAL FEASIBILTY

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Financial Strategy Financial Ability of Amazon to develop technology and making them ready to use. This is the major reason why Amazon can deve...