Case Study

SHAREHOLDERS & CUSTOMERS

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Royal Commission Highlights

30 November 2018

The Guardian

Royal Commission Insights

Cultural Failures – Impact on Customers

20 November 2018

Matt Comyn – CBA CEO

Banking Royal Commission

Juicy result vs. Public resentment

Juicy result vs. Public resentment

Seeing Red

Seeing Red

Customer vs. Shareholder. Not new!

Big 4 Bank Profits

Bank profits have grown steadily but are recently slowing

Big 4 Bank Value

Short-term profits a key driver of market value

Amazon’s Customer Focus

26 April 2018

Jeff Bezos, CEO & Founder of Amazon

Amazon approach to business. Long-term & customer centric.

“Delayed Gratification”
Amazon Letter To Shareholders’ 2005

“As our shareholders know, we have made a decision to continuously and significantly lower prices for customers year after year as our efficiency and scale make it possible.

This is an example of a very important decision that cannot be made in a math-based way…

With rare exceptions, the volume increase in the short-term is never enough to pay for the price decease….

We can estimate what a price reduction will do this week and this quarter. But we cannot numerically estimate the effect that consistently lowering prices will have on our business over five years or ten years.

Our judgment is that relentlessly returning efficiency improvements and scale economies to customers in the form of lower prices creates a virtuous cycle that leads over the long-term to a much larger dollar amount of free cash flow, and thereby to a much more valuable Amazon.com.“

Amazon Profitability

Different business model: forgo short-term profits in favour of long-term value (hopefully!)

Amazon Value

Immense long-term value created without focus on short-term profitability

Business Comparison

* Amazon are mature but will likely continue to evolve/change significantly 

Customers & vs. Shareholders