Amazon.com has a number of strengths that can help them compete with other high-tech companies. They currently are one of the largest retailers in the world. This is an extreme advantage for Amazon.com in a number of areas such as marketing, distribution, customer base and supply. With such a large presence in the e-commerce industry, this allows Amazon.com to offer more bottom-line products such as movies, music, and ebooks along with the million of other products. This makes the Kindle an even more attractive device for consumers. Another strength Amazon.com has with their electronic devices is they are able to sell them much cheaper than their competitors. For example the Kindle HDX Fire 8.9 can be purchased new on Amazon.com for around …show more content…
According to Pearce and Robinson (2014), “An opportunity is a major favorable situation in a firm’s environment.” (p. 154) One major favorable factor affecting Amazon.com is their continual success year after year. Table 1 represents a look at Amazon.com’s balance sheet comparison for the last five years. (Bezos, 2015) Amazon.com has almost tripled their net sales in the last five years. This type of success is an incredible opportunity. It provides Amazon.com with the capital to continue to branch out into new areas. Acquisitions of companies such as Kiva Systems (discussed previously) and other on-line retail companies such as Zappos, Quidsi, Livingsocial, and Lovefilm have increased the overall capability of Amazon.com. These acquisitions create a whole new list of opportunities for the corporation, which in turn adds more capabilities to the Kindle Fire …show more content…
Through strategic acquisitions the company has purchased a number of similar on-line retailers as well as a number of high-tech corporations. These acquisitions have caused Amazon.com to continue to reevaluate their strategic position. Their strategic plans are aimed at using high-tech innovations to improve their marketing, distributions, and delivery while increasing overall revenue. Such advancements as the Kiva robot, drone delivery, as well as devices like the Kindle Fire HDX, Fire phone and the Echo speaker system are critical factors in Amazon’s success and are direct reasons why Amazon.com is considered a very competitive high-tech organization. Through SWOT analysis Amazon.com was able to identify a number of factors for why Amazon.com has continued to increase their revenue every year since their conception and a number of reasons for why they should always be scanning the
History”, n.d.). But the unbelievable pace at which Amazon added new products and new customers proved to be a formidable barrier for any competitors. Within the first 10 years Amazon accomplished an unbelievable feat; it had 49 million customers and 6.9 billion dollars in revenue, and it had done so by selling some products at a loss to build market share (Rivlin, 2005). At times it was difficult leveraging so much capital to grow market share, but Jeff Bezos’ focus on the customer and long term growth of the company proved to be the real reason Amazon didn’t fall prey to the .com bust like so many other internet
To find its potential, perform a SWOT analysis. Ken Andrews developed the SWOT analysis tool in the 1970 's. SWOT stands for strengths, weaknesses, opportunities, and threats (Flat World Knowledge, Inc., n.d. p.105). Amazon 's strengths include its size, popularity, competitive pricing, customer reach, and ease of access. As for weaknesses, Amazon is an online only retailer. This can be viewed as a great weakness because while much of the world has access to the internet, not all of the world has access. This means Amazon could potentially be missing out on sales from those who might have no other choice than to shop at nearby businesses. Opportunities for Amazon don 't seem to be as apparent as its strengths and weaknesses. However, one big opportunity that Amazon is currently working on is having a selection of its own brand of products. Products sold on Amazon are mainly from global brands rather than Amazon itself. Finally, the major threats to the company are its competitors (Ebay & search engines with "shopping" options) and the ever-increasing concern over online shopping. In the past few years, we have seen and heard about an increasing number of businesses which have been "hacked" and customers ' information (credit card numbers, addresses, personal information, etc.) stolen. As a frequent Amazon shopper, I can only hope that Amazon is never involved in such a threat. Overall, Amazon has huge potential and has been capitalizing on that
The biggest success has been that Amazon.com has become a platform that other businesses can benefit from. Making Amazon.com a general platform for e-commerce operation has been made possible through their advanced technology investments and it has become a major success. Making Amazon.com available through a Web services interface to any developer in the world free of charge has also been a major success because it has driven so much innovation that...
Jeff Bezo’s began Amazon in his garage in July 1995 with three Sun workstations setting on wooden doors for tables and extension cords running from everywhere (Academy of Achievement, 2010). Right from the beginning he was a visionary leaving his well paying job as a senior vice president with D. E. Shaw to begin Amazon.com (Academy of Achievement, 2010). Being the visionary that he is he saw an opportunity prompted by the huge growth rate of internet use in a single year and ran with it never looking back. Jeff realized that the internet had “no real commerce to speak of” so he began researching possible businesses (Academy of Achievement, 2010). “After reviewing 20 mail order businesses and deciding which could be conducted more efficiently over the internet than by traditional means he decided on books” (Academy of Achievement, 2010). He thought books were perfect because attempting to send huge catalogs for all the available books would be expensive and cumbersome, but an online resource database that was easy to navigate would provide customers with easy access and a single point from which to shop. “In 30 days, with no press, Amazon had sold books in all 50 states and 45 foreign countries, obviously by the success of Amazon he was right (Academy of Achievement, 2010). In a case study written by Javad Kargar called “Amazon.com in 2003” he stated that “Amazon's online store was a big hit, with about $5 million in the first year of operations” (2004). This huge success so quickly would have confirmed for Jeff that his idea was viable and drove him to continue to strive for more. Jeff Bezo’s charismatic-visionary leadership is the key to his and Amazon’s success.
Amazon’s macro-environment is made up of six external factors: political, economic, environmental, technological, social, and legal conditions. These factors are important because they shape how the company operates and you must know each piece to be able to compete within the retail and eCommerce industry. An evolving political factor are the efforts the government has made toward punishing offenders of cyber-crime. This kind of thief wasn’t walking into your store, but hacking into your computer. This type of crime wasn’t possible before the internet. The government has started to take these crimes more serious as technology evolves. Technology is a factor that Amazon.com must invest heavily in. They are reliant on having top of the line technology to survive against cyber-crime and to stay relevant in the tech world. ECommerce is everywhere now and competition is very high. This brings in legal conditions; Amazon must know what laws exist in which countries because they are a
From the consumer side, Amazon provides services like Amazon Prime, which delivers free two-day shipping on retail purchases, on-demand video streaming and a free access to the Kindle library, everything for an annual
The key strategy implementation efforts at Amazon all surround the use of “big data”. Big data is the growth and availability of large volumes of structured/unstructured data. The use of big data has allowed decision making based upon data and analysis instead of past experience and intuition. Big data has directed organizational change in allowing Amazon to expand from an online book store to an internet giant. Revolutionary application of big data has allowed Amazon to create superior service quality while motivating employees by providing real time information to solve customer issues. Big data has strengthened Amazon’s competitive capabilities by pioneering the application of big data and charging a monthly fee to smaller businesses
Launched by Jeff Bezos, the Amazon.com website started in 1995 and is today considered as one of the most prominent retail website on the internet with a record turnover of US$ 14.87 billion in 2007. Jeff Bezos’s intention was to create an internet based company with the most dedicated product portfolio on the internet where customers could find anything they might want. Amazon’s success is based on technology, services and products (Jens et al., 2003).
Amazon has been able to maintain sustainable competitive advantage based on three operational strategies. These are low cost-leadership, customer differentiation and focus strategies. Low cost-leadership is pursued by Amazon by differentiating itself primarily on the basis of price. By offering low prices to customers Amazon ensures its future success. Partially modifying the costs of lowering prices over time through achieving higher sales volumes, negotiating better terms with suppliers, and achieving better operating efficiencies. Amazon makes sure that it offers the same quality products as other companies at a considerably cheaper price. Another strategy that Amazon has is its fast delivery service and there are many delivery services that one can choose from. With Amazon Prime, there are certain, but many products that have free two-day shipping. Also, with Amazon Prime, there are many offers specifically for people that have Amazon Prime. For example,
When Amazon.com first began in 1995, as strictly a book retailer, Bezos knew he had discovered an excellent company. After all, a physical bookstore cannot stock anywhere close to the number of books Amazon can offer online. Within a year, the company had a customer base of approximately 340,000 consumers and daily site visits were huge as well. But Bezos wanted to expand the company to offer music and DVDs, because he realized there was little or no barrier of entry. In the next years Amazon would emerge as a marketplace, expanding the company globally offering products from toys to kitchenware. Because of the relatively cheap prices Amazon was offering and also the growing number of online shoppers, the company was doing tremendous amounts of sales and creating profits.
Amazon.com was a venture into an emerging market of internet and had to face hidden and unexpected hurdles in order to survive and excel in the market. Therefore, Amazon.com kept modifying its strategies with their focus on enhancing customer experience of online shopping and to delivery exceptional services with complete convenience to their customers. One of the major strategic decisions was to compromise on cost saving stragegy when Amazon.com started to maintain its own warehouses in different countries in order to ensure timely and accurate delivery to their customers
Amazon is best known for their kindle, fast shipping, and selling various products (Smith). With Amazon being such a large corporation, professionalism, academics, character, and engagement are crucial parts of the success of the company. Professionalism: Amazon has grown to become the largest internet-based retailer in the world by total sales. It began as primarily an online bookstore and soon began to sell more and more electronics and then over time began to sell pretty much anything. In 1998, Amazon earned about $0.6 billion, which held steady growth from 1998-2006 (“Amazon.com”).
Amazon has recorded a magnificent success in its business throughout the years that it has been in operation. It has attracted almost all people to use it when necessary. Amazon has built its success in business methodically and slowly. Amazon has made much success because of its ability to read market trends and diversify its operations. It started as an online book selling company. However, it changed its operations and started selling other products. Currently, many large retail shops use Amazon to host and power their websites, for instance, sears and virgin megastores. Amazon now attracts over fifty million visitors in a period of one month. Amazon has tried to make their services fit each individual user. It has based its services on the end user. It has shipping discounts, customer product reviews and a credit card with bonuses. It also has prime membership, product forums and 1-click ordering system among other services. The company has tried to make a remarkable experience for customers and visitors (Thomas, 2006).
Legal Factors: Amazon is following legislative constraints and changes, such as health and safety legislation. Using a range of tools and techniques helps companies make fast decisions and remain competitive in the market. Here, we will examine some of the tools used by our chosen company: SWOT analysis, PESTLE analysis, and Porter's Five Forces analysis. As we can see, the SWOT analysis is an analysis of the micro-environment of the company, while PESTLE and Porter's Five analyses are from the macro-environment of our company. These analyses help the company be aware of the market, competition, and threats to the business.
Secondly, Amazon.com expanded internationally, pursued strategic acquisition and bought new firms to bring new services, assets, capabilities, services, and skills.