Amazon Swot Analysis

667 Words2 Pages

SWOT Analysis Strengths: This organization has adopted a cost leadership strategy whereby all of their products and services have a lower cost for purchasers in comparison to their competitors. To accomplish this, Amazon has utilized economies of scope, which involves having a wide variety of products available for customers to buy and reducing their profit margin so as to capture a greater market share, hence gain a competitive advantage over other e-retailers. They have provided high quality products and services for their customers as well as made their online selling platform very user friendly; allowing anyone to use their website quickly and efficiently. Strategic acquisitions have been a general strength for the organization as they have acquired other retailers and companies enabling them to penetrate new markets without risking their own resources. The distribution channel of Amazon affords them the opportunity to satisfy their customers, and a satisfied customer is one who will return and continue making purchases from the site. They offer free shipping to the doorstep of their customers and it is always on time, also building a strong relationship for repeat business. Economies of scope involves generating savings that come from producing several goods or services altogether at a cost less than what it would be had Amazon produced each individually. Particularly evidenced in the use of their online platform offering the largest range of products possible, not placing any restrictions on their catalogue. Weaknesses: The selling margins of Amazon are extremely low, and this might become detrimental to the business in the coming future, although these margins are intended for establishing a cost leadership position to ma... ... middle of paper ... ...eats: The major threat to any online business is the privacy and security of their customers’ information; this should be emphasized because if customers lose their information to hackers they will lose trust in Amazon. Therefore the security of client data is paramount. The possibility of lawsuits has an effect on their image to potential buyers, so all organizations must try and abide to the laws and general security protocols, otherwise they might be forced to pay dearly for negligence. The strategic element between Amazon’s eBook sales and Apple’s ubiquitous iPad has impacted the Amazon Kindle market share. Both organizations already control a substantial amount of market share individual, so while an alliance will increase their combined market share, it is unlikely and thus the competition can lead to reduced margins by both firms in the eBook market segment.

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