Strategic Management in the New Economy: Amazon

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"External & Internal Analysis of Amazon during 1997"

Strategic Management in the New Economy


What are the opportunities and threats that faced in 1997?

In all the proceeding cases, we analyzed the various levels of the external environment, moving through the remote, to the industry and finally to the operating environment. Through doing this we saw where Amazon's potential opportunities and threats lay. We also applied Porter's Five Forces to asses the threats in the industry environment.


The size, speed and growth rate of the Internet. The technology aspects of the remote external environment played a large role in opportunities for at the time of the case study. Firstly, the projections
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There is also a comfort factor involved with online purchases, and internet users might not take to sending credit card information online.

Large portion of the company is handled by other firms. Since relies heavily on shipping companies to deliver their product to the consumer, the shipping companies gain a large bargaining position. From an Industry environment perspective, the shipping channels are given far too much control over this critical portion of Amazon's business and are therefore placed in a powerful bargaining position.

What are the firm's strengths and weaknesses in 1997 (date of the case)?

Once again, we used various methods of analysis to figure out what Amazon's internal strengths and weaknesses were. We started with a resource based view, looking at the tangible and intangible assets of Amazon and its organizational capabilities. Next we looked at functional view of Amazon, taking note of its research and development, marketing and operation factors and management organization. Finally, we took a value based approach to see how Amazon was benefiting the consumer with their cost reducing practices.


Pricing Strategy. In using the value chain resource analysis one can see that the pricing structure could lower the overhead costs because there is no need for a large
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