Strategic Analysis of Amazon

1060 Words Apr 20th, 2011 5 Pages
| CS4264 E-Commerce: B2C Applications | Assignment 1: | Rachel Lin Peishi (U078952B) |

Five Forces Analysis

1. Threat of New Entrants

Threat of new entrants is low: The online books retailing industry has a high entry barrier. Newcomers will need high capital which includes website development costs, distribution channels establishment costs, branding costs and etc to startup. As such, the threat of new entrants is low.

2. Bargaining Power of Suppliers

BP of suppliers is high: Although there are about 85,000 book publishers in America, there are only a few dominant publishers in the industry. Based on the website (Poynter, 2004), there are only 6 large publishers in New York and the rest are the
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Considering the fact that the first eBook reader has failed due to not being user-friendly, Amazon Kindle should be made to suit what the customers need.

Furthermore, to counter to the high rivalry in the online books retailing industry, has to come out with new strategy to play against its rivalry. This is especially so as the technology of the eBook reader is already known to competitors in the industry. As has always valued its “first-mover” strategy during its startup in 1995, it can also use this strategy to introduce the eBooks service first to its customers.

Lastly, strength is its powerful brand name. Many people, especially those in America know about the online retailer,, more than any other online bookstores. As has always provided convenience to its customers e.g. buying books online, it can continue to do so by introducing the Amazon Kindle and eBooks service which allow customers to get the books directly by downloading once they pay. This would also help to save on books shipping costs.

In conclusion, should provide Amazon Kindle and the eBooks service in 2007 as it is an excellent strategy to move forward with technology.


Adam. (2009, November 14). Amazon SWOT Analysis. Retrieved from MBA Tutorials: Wiki. (2010,