Question

Please respond to this discussion

Hi Team 1. Great job on your presentation! I noticed a few items where my company analysis differed with yours. When I completed the Porter’s Five Forces, I had the same outcomes except for Rivalry where I evaluated it as being a threat even though my overall totals generated an Opportunity for Amazon. I felt that Amazon and its competitors have to fight for market share because of the enormous number of retailers, small and large, selling online. Because of this ease, competitors would want to stay in the market longer and plus buyers have a capability of price shopping. Amazon has strong competencies, but I read in their 10K that they feared that many of their competitors have greater resources, more history, and more brand recognition and will continue to be an increased threat as Amazon grows. I figured that the future value would be a little under 3 at 2.83. I see yours dropped as well but still remained as an opportunity. Why do you feel that rivalry is not considered a future threat? I was surprised to see AWS being a leader in the market. To be truthful, I never realized that AWS even existed until this project and then to find that it is actually a leader in the market over Microsoft surprised me. I was wondering why your group felt that technology was not a sustained competitive advantage. The last difference was that I saw the International division the weakest of the three divisions because their rivalry has a greater presence, is already established, and because of government regulations. Do you feel that Amazon will able to pull up their numbers in the international division? Again, great job. I enjoyed watching your presentation.

Answer 1

We do believe that Amazon have threat from the rivalry like Walmart, BestBuy, Staples, ebay, Netflix etc in global level too but if we analyse the business model and performance of Amazon in last 7 years atleast, it is the market leader in the segment globally. Definitely future competition depend on rivalry and e-commerce companies are doing aggressive marketing and promotion to attract new customers, poach customers of Amazon and retain their old customers. This fact is there but Amazon is beating this and the threat has been converted as opportunity by Amazon.In international division, Amazon compete with local e-commerce firm but the technology and expertize along with the platform Amazon provide beat those firm in competition too.