Earlier this month, a team of Nicholas Center MBA students delivered their recommendations to Amazon as they quantified the impacts of Chinese tariffs on Amazon and its U.S. retail consumers. This project provided an original contribution to Amazon’s understanding of the issue, especially since no other research or publications were identified that perform a company-level impact analysis of the tariffs.
The final deliverable included a 60-minute presentation to 10+ finance executives from Amazon.
The key highlights of the analysis included:
- A strategic pricing analysis derived by the Nicholas Center to quantify the impact of the tariffs
- Quantification of a short-term annual impact and a long-term annual impact based on 3 tariff scenarios
- Key inputs included U.S. trade data with China, enacted tariff rates by product, trade elasticities by product, demand elasticities by product and pass-through rates both to Amazon and to consumers from Amazon
- A set of models were designed in R and Excel that Amazon could easily update with additional information
- Research into tariff history, historical and current tariff mitigation strategies and announced U.S. retail price increases
- Recommendations for Amazon on how to mitigate the impact of the tariffs
This is an excellent example of the consulting projects for Fortune 500 companies that are built into the Nicholas Center curriculum. These experiences provide an invaluable experience for students in analyzing real-world, strategic business problems.
For more information, an excerpt of our presentation can be found here: