Private Label Issues Strike

Amazon
Conflict Between Ethics, Seller Relationships and Profitability

Brian Hossain, Sofia Galvis, Frankie Chung, Zahid

Hasnain, Vraj Patel, Indij Sahota
Table of contents

01 Case Summary
02 Recommendations

03 Case Analysis 04 Conclusions

01

Case Summary
“Amazon unethically pulled competitors’ data to
gain a competitive advantage over individual
sellers”
(Basu, Singha, Pedada & Aggarwal, 2023)
What is the main issue?
⎼ Amazon is being accused of portraying anti-competitive and unethical
behaviour as the company is allegedly taking advantage of information of third-
party sellers.
⎼ The information taken is being used so that the products of Amazon’s private
labels will be more successful.
⎼ The misuse of information includes copying other products that have been
successful among buyers in Amazon and manipulating the search of buyers so
that the private label products will be benefited.
⎼ In the United States this issue has been addressed by both Jeff Bezos (CEO) and
Nate Sutton (Associate General Counsel for Competition). Both have stated that
this is not happening among the company.

(Basu, Singha, Pedada & Aggarwal, 2023)

 Who else is Geographically Involved?

India
• John Miller Case – Amazon copied the brands measurements for t-
shirts after noticing the outsold Xessentia’s shirts (Amazon’s private
label).
• Reuters news has revealed that Amazon allegedly manipulated search
results so that their private labels would appear as top three
recommendations to customers.
(Reuters, 2021)
The EU
• 2019 – The European Commission opened a formal antitrust
investigation against Amazon
• The European Commission is concerned on whether this is a
breach towards the European Union’s competition rules.
• TFEU - Treaty of Functioning of the European Union.
• Article 101 - Prohibit anti-competitive agreements
• Article 102 – Prohibit the abuse of dominant position.
(European Commission, 2019)
02
Case
Analysis
“If the reporting in the Wall Street Journal article is accurate, then
statements Amazon made to the Committee about the company’s
business practices appear to be misleading, and possibly
criminally false or perjurious,”

(Brachmann, 2020)

Public Image
• Due to the scandal that the company
currently faces, a bad publicity is
being created under Amazon’s
name.
• This negative impact on Amazon’s
image can result in a decline on
sales as buyers may feel empathy
towards third-party sellers and
“boycott” the company.
Main Conflicts
USA Law Conflict
• On May 1st, 2020 a letter addressed to
Jeff Bezos was received. It evaluated
the situation of Amazon.
• The letter also calls upon Jeff Bezos to
testify before the House Judiciary
Committee to clear the matter up.
• What makes Amazon’s situation worse
is that it is also being accused of lying
under oath.
(Brachmann, 2020)
Third-Party Sellers
• Amazon must find a way to create a
harmonious relationship with the sellers
and ensure them that their market is safe
for them to sell their products.
• Amazon must also reach agreements with
those sellers whose information has
already been retrieved for Amazon’s
personal benefit.
 03

Recommendations
Impact of the risks
30% 15%

Saturn Venus
Saturn is a gas giant and has Venus is the second planet
several rings from the Sun

30% 25%

Jupiter Mars
Jupiter is a gas giant and the Despite being red, Mars is
biggest planet actually a cold place
* Follow the link in the graph to modify its data and then paste the new
one here. For more info, click here
Strategy map & balanced scorecard
Perspectives Strategic objectives

F1 - insert your F2 - insert your F3 - insert your F4 - insert your

Financial own text own text own text own text

C1 - insert your C2 - insert your C3 - insert your C4 - insert your

Customer own text own text own text own text

Internal I1 - insert your I2 - insert your I3 - insert your I4 - insert your

process own text own text own text own text

Learning L1 - insert your L2 - insert your L3 - insert your L4 - insert your

and growth own text own text own text own text
Awesome words
Financial model
Historical results Forecast period

Inc model 20xx 20xx 20xx 20xx 20xx 20xx 20xx 20xx 20xx

Balance sheet
Assets
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Answers and supporting arguments
How can the company reduce its cost by 10%?

Reduce costs by $5 million through

operational improvements

Outsource non-core Simplify core functions processes Review supplier cost

functions to save $3 million to save $1 million to save $1 million

Evaluate cost and service level of Select and review current supplier
Design current processes
potential partners costs

Compare current process to best- Evaluate cost of potential

Select non-core functions
in-class benchmarks alternative suppliers

Choose one partner for each Adopt best practices based on Negotiate supplier
function benchmarks contracts/choose options
Competitor comparison table

Attributes Competitor A Competitor B My business

Price $360 $320 $300

Quality Low Medium High

Customer age 20-40 18-45 18-50

Reputation Bad Average Good

Location Spain Italy USA

Change management strategy & plan
Size of the change

Insert name of Insert name of Insert name of

Extreme the change the change the change

Complexity of the change

Insert name of Insert name of Insert name of
High the change the change the change

Insert name of
Medium the change

Moderate

Low

1 team 1 business unit 1 division Half company Extreme

 $489,300
Big numbers catch your audience’s attention
 $20,000 $15,000
Mars is full of iron oxide dust Venus has a beautiful name

$10,000 $45,000
Mercury is the smallest planet Saturn has several rings
Management approach

January February March April

Venus is the second Despite being red, Saturn is a gas giant Mercury is the
planet from the Sun Mars is actually a cold and has several rings smallest planet of
place them all
Maturity model

25% 50% 75%

Basic Standard Advanced

Mercury is the closest planet to Venus has a beautiful name and Despite being red, Mars is
the Sun and the smallest in the is the second planet from the Sun actually a cold place. It’s full of
Solar System iron oxide dust
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You can replace the image on the

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Resources