Amazon. Com: SWOT Analysis Of Amazon

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Amazon.com is one of the biggest companies worldwide due to its strengths (See Appendix A for the SWOT Analysis). First, as an e-commerce retailer, it has a low-cost structure. It lacks the infrastructure and labor costs associated with maintaining and opening new physical stores. Second, Amazon has high brand equity due to its variety of products and low prices. Third, Amazon has a rapid revenue growth rate. To illustrate, Wal-Mart has increased its revenues by 77% for the past ten years, whereas Amazon.com has jumped by more than 1,000% for the same duration (Shaw, 2014). Fourth, two competitive advantages of Amazon.com are its information technology (IT) and supply chain management systems that work together in both determining what customers…show more content…
The opportunities are diversification in mobile and e-commerce businesses and through acquisitions. If Amazon wants to diversify into services or products that are nearer its core competencies, it can diversify into mobile and e-commerce businesses, with emphasis on the former that has grown “three times faster than e-commerce year-over-year” (D’Onfro, 2014). As for external threats, they come from intense competition due to lower industry entry barriers. For instance, a delivery service app, WunWun, is a new player that allows customers to buy goods from local stores and then delivers them within an hour for free (D’Onfro, 2014). This competitor shows how new, nimbler players can also reduce Amazon’s local market share. Another threat to Amazon is the recent spate lawsuits, one against their products (Bellon, 2017) and another on patent infringement (Tirrell, 2017). Lawsuits can mar Amazon’s reputation and if the claimants win, it will reduce the company’s…show more content…
Products should be differentiated in terms of price and quality, meaning the price should fit the value. The place can remain largely in e-commerce and mobile platforms but Amazon should consider working with local shops to have a stronger physical presence and a faster way of delivering products as well as processing returns (D’Onfro, 2014). For promotion, Amazon can tap bloggers and other people who have large subscribers and followers as its additional means for advertising. With reference to the 4As, some changes can be done to leverage Amazon's strengths and capture opportunities apart from reducing threats. It can increase its acceptability by connecting with local shops so delivery and other processes can be much faster. Doing so can enhance its goodwill and become more like of a "local" store for an enhanced psychological acceptability. The next aspect is affordability. Amazon can enhance economic affordability through developing mobile and Internet service capabilities that can make delivery faster and more cost-efficient, such as through predictive software and supporting local businesses to reduce prices across the value chain system. For accessibility, increasing physical presence through alliances with local stores can work. Finally, Amazon.com can boost product knowledge to reduce lawsuits and improve market penetration/market development through

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