Instructions In Unit VII, you will submit a case study assignment based on the company you chose for the SWOT analysis in Unit II (attached). Please be sure to review the Unit VII requirements and wor

Running head: AMAZON’S SWOT ANALYSIS

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Amazon’s SWOT Analysis

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Introduction

Amazon was founded on July 5th, 1994. Amazon is a great company which has been growing each and every day. Amazon has become a top leader in the online business. Amazon is currently under the leadership of Jeff Bezos and is headquartered in Seattle, Washington, United States. Amazon serves the electronics industry, the retail industry, and the internet industry.

Strengths

Amazon is currently the world's biggest online retailer. In 2018, Amazon amassed approximately $156.345 billion merely from its online operations; there is no other retail firm that made such earnings in the same year (Kotler & Keller, 2016). Amazon has been able to overcome great competition from firms such as Walmart due to its low-cost structure. Many customers have, therefore, remained loyal to Walmart as the firm provides exceptional customer services and products. Amazon offers various products to its consumers making it have a strong brand. Amazon has ensured that it focuses on all its major 14 markets and is still expanding to other markets. The fact that Amazon accommodates third-party sellers makes it be very effective in terms of operations and customer satisfaction (Majed, Nuraddin, & Hama, 2018).

Amazon has established synergies in between the marketplace, Web Service and Amazon Prime. The synergy between the three key businesses has ensured that Amazon's operations are carried at great speed and effectual capacity. Additionally, synergy has promoted significant expansion and investments. Amazon has exceptional leadership. Jeff Bezos who is the current CEO of Amazon is a visionary leader who has brought significant changes in the firm. The high revenues that Amazon attracts make it hire talented and qualified employees who have brought great innovations and transformations in the firm (Majed, Nuraddin, & Hama, 2018).

Weaknesses

Amazon has faced various legal issues due to the avoidance of tax. Tax avoidance has created a negative public image of Amazon on its UK and US markets. Amazon has also the weakness of high debt in developing countries due to its attempts to be more profitable. Amazon has a business model that is easily imitable. Amazon has to adjust its business model if it has to remain competitive in the global market. It is easy for firms to establish an online trade website just like Amazon. Amazon has also focused on developed markets (Rossman, 2017).

This is a weakness because Amazon could face the challenge of high competition in case other firms establish themselves in the developed markets. Amazon also has a limited brick-and-mortar existence which limits its ability to attract more customers especially when it comes to selling some products (Rossman, 2017). Amazon has also been criticized for being a flop when it comes to the production of some products. For instance, Amazon's fire phone was a great flop in the US as the product didn't attract potential customers. Launching products that end up as flop damages the image of a company and lead to significant financial loses. Amazon should ensure that it changes its marketing strategy, especially where there are shrinking profit margins such as in India (Rossman, 2017).

Opportunities

Amazon has the financial capability to capitalize on the emerging markets where there is less competition. Through Amazon Prime, the company stands a chance of making significant sales and winning more loyal customers (McCorvey, 2018). The government has also been changing its policies to make it more effective for multinationals to operate in any business environment. Amazon is, therefore, likely to profit greatly from the reformed government policies. The technology advancements have played a paramount role in bettering the e-commerce platform of Amazon. Amazon rips most of its revenues from the e-commerce platform making it the major source of revenue (McCorvey, 2018).

Amazon has the chance of acquiring various e-commerce firms which will enhance its market leadership in the industry. Amazon has also the opportunity of expanding to various global markets such as in India and Asia where there is low competition. Expanding to search market is likely to result in considerable profits for the firm (McCorvey, 2018). The fact that Amazon has a large pool of resources makes it easy for the firm to hire talented and innovative employees who are likely to boost its performance. Amazon can also partner with firms that have already established themselves to overcome the high level of competition that the organization is facing currently (Rossman, 2017).

Threats

Amazon has been imitated by many businesses especially the competitors. Amazon has a simple business model which can be easily imitated and adopted by competitors. Such a move will lead to more competition and reduced market control for Amazon. The advancements in technology have led to an increase in cybercrime which is a great threat to the operations of Amazon. Cybercrime has led to legal issues for Amazon as well as reduced customer base due to the compromising of personal data (Tehrani, 2017). Amazon also has to keep on updating its marketing strategy to cope up with the changing demands and needs of the customers. Basically, it is hard for Amazon to effectively meet all the needs of its customers with the changes in customer patterns. Many emerging firms such as Deliverr are a huge threat to Amazon as they are focusing on low-cost production and marketing (Tehrani, 2017).

The world of today has greatly revolutionized and firms have become unethical in an attempt to maximize profits. Amazon has the threat of compromising its ethics to ensure that it continues to be profitable in the modern world (Tehrani, 2017). Some governments such as in India and China are imposing strict laws for multinationals and this has the possibility of reducing the market share of Amazon. Amazon needs to be vigilant when it comes to observance of the laws in their domestic markets. There is a general core for environmental conservation which every firm has to comply with. Amazon needs to be watchful in its operations if at all it has to meet the imposed environmental conservation standards (Tehrani, 2017).

References

Kotler, P., & Keller, K. L. (2016). Marketing management (15th ed.) [VitalSource Bookshelf version]. Upper Saddle River, NJ: Pearson. Retrieved from https://online.vitalsource.com/#/books/9781323591512

Majed, S., Nuraddin, S., & Hama, S. (2018). Analyzing Amazon success strategies. Journal Of Process Management. New Technologies, 6(4), 65-69. doi: 10.5937/jouproman6- 19264

McCorvey, J. (2018). Fast Company. Retrieved August 25, 2018, from www.fastcompany.com/3014817/amazon-jeff-bezos.

Rossman, J. (2017). The Amazon Way: 14 Leadership Principles behind the World’s Most Disruptive Company. SDMIMD Journal Of Management, 8(1), 95. doi: 10.18311/sdmimd/2017/15723

Tehrani, S. (2017, Summer). Welcome to the Amazon: Leading Online Retail from Local tax Avoidance into Your Backyard. The Tax Lawyer, 875-908.