Question

PLEASE WRITE IN YOUR OWN WORD ABOUT AMAZON COMPANY WITH HARVARD REFERENCES

determine the past, present, and likely future of the industry and the company's track record with that industry. Use the different models like SWOT, PEST, Porters model to understand the market environment

Answer 1

Amazon SWOT Analysis:-

Strengths:

• Brand image- major player in today’s date, globally
• cost leadership, differentiation, and focus- core strengths
• Using superior logistics and distribution systems,
• Large network of buyers and sellers
• Acquisition of companies like Zappos.com, Junglee.com, IMBD.com, woot.com etc.
• Fast digital growth, supported by intuitive user interfaces, buyer and seller technology- tools, safe and convenient transaction processing, database and network applications

Weaknesses:

• global reach is good, but need more market share
• Market penetration is still not present in micro markets and some niche areas
• Expansion plans particularly in emerging markets is a challenge

Opportunities:

• Need more Diversification and acquisitions technological and non-technological, if want to beat other competitors
• Designing innovative experiences for the mobile users for better interface is a key area to develop in future
• emerging markets are a choice of every big MNC, so should be targeted too

Threats:

• Major competitors are Ebay, Alibaba, Flipkart
• Regulatory pressure- need to regularly check on anti-trust laws in many countries
• Currency fluctuations keep posing a threat of losing profit margins
• identity theft and hacking can pose a threat to Amazon’s and customers’ data

Amazon PESTEL Analysis:-

Political Factors:

Factors such as the levels of bureaucracy and corruptions in the country specific, activities of trade unions and home market lobbying groups etc. always effect in business in terms of country specific and in turn, global revenue and profit margins.

Economic Factors:

A change in inflation rate has always had implications on Amazon’s performance, globally. Exchange rate between USD and other currencies has always been affecting eBay’s profit margins. Tax complications in respective countries too affect the business.

Social Factors:

Day by day rising online activity is challenged Amazon to develop it’s delivery capability to deliver services promptly. Changing consumer preference or taste also challenges Amazon to add more variety of products. Rising demand for high quality service is also threat but should be looked as an opportunity to do better.

Technological Factors:

Rising mobile device usage gives a challenge and an opportunity to develop a better user interface and bring better user experiences. Rising competition through technological innovation is a threat to be dealt with.

Porter's Five Forces for Amazon:

Porter Five Force	Intensity
Competitive Rivalry Within The Industry	Medium to High
Bargaining Power Of Customers	High
Threat Of New Entrants	Medium
Bargaining Power Of Suppliers	Low To Medium
Threat Of Substitute Products	Low

Conclusion:

• Amazon should focus on more technological innovation like Analytics platforms and acquisitions of such key brands in order to cope up with competitors
• Use of cutting edge technology in today’s date- Artificial Intelligence should be taken care for creating better customer experiences
• Operational costs must be managed to save profit margins due to currency fluctuations in today’s disturbed economic scenario