read the research amazon and do the assigemenet

NAME: RABISA MAHARJAN

INSTITUTION: PORTLAND STATE UNIVERSITY

COURSE TITLE: BA 301

INSTRUCTOR’S NAME: Zafrin Rahman

DUE DATE:1/25/2025

Introduction

Amazon is an international e-commerce and technology company guided by its mission: "to be Earth's most customer-centric company." It is focused on enabling a large selection of products, making buying convenient through innovative solutions, and improving the customer experience. Their vision, "To be Earth's best employer and Earth's safest place to work," epitomizes their concern for employees and their operational management. These will include major stakeholders such as customers, employees, investors, and regulators. The satisfaction of the customers, however, is of utmost importance.

The financial performance of Amazon shows that it is not only a strong online retailer but also in cloud computing. In the last three years, revenues for the company grew steadily: $386 billion in 2020, $469 billion in 2021, and $513 billion in 2022, which is an increase of 7.9% year over year(Amazon,2023 ). Offsetting that, however, their profits have fluctuated: they made $21.3 billion in 2020, rising to $33.4 billion in 2021, and falling back to $11.6 billion in 2022 due to increased costs and economic headwinds. Even with the extremely low profit margin of 2.26% in 2022, they still operate the business quite efficiently for such a large company.

That fact investors are very confident in Amazon is reflected in the stock performance of the company: its share price reached as high as $186.57 in mid-2021 due to the growth of online shopping during the pandemic. However, economic challenges pulled the price down to $84.17 by the end of 2022(Yahoo Finance, 2023). Despite that, Amazon has a strong track record, with the five-year return of roughly 140% being way better than the overall market. A major part of Amazon's success involves innovation: investing heavily in AI, robotics, and improving its logistics. It holds over 2,500 patents, having a leading position in cloud computing through AWS and supply chain management.(Statista, 2023).

Despite all these facts, there is some setback the company has gone through. In 2020, the company's debt was $31.8 billion; in 2022, this surges to $69.7 billion, in which most of it was used for the growth and acquisitions. Besides all the above-mentioned points, there is much legal and regulatory scrutiny regarding the monopolistic behavior and poor treatment of employees. On the sustainability front, Amazon has initiatives such as the Climate Pledge to reduce its environmental impact, but many critics say that is not enough, considering the scale of its logistics network.

Industry Perspective

Amazon is the big player in two of the fastest-growing industries: e-commerce and cloud computing. It is anticipated that the global e-commerce market, estimated at US$4.9 trillion in 2021, will see an annual growth rate of 10.5% through 2030, driven by increased internet consumption, mobile shopping, and a consumer preference to shop online. It includes Cloud computing- AWS leads in the space-is expected to grow 15.7% annually with increased adoption by businesses of digital tools and artificial intelligence-the market was worth $368 billion in 2021(Market Research Future, 2023).

Amazon, therefore, competes with other players such as Walmart, Shopify, and Microsoft. Walmart is a huge retail company with revenues of $611 billion in 2022, though less online sales than Amazon(Walmart Annual Report, 2023). Shopify is still growing fast - revenues up 22% in 2022 - focusing on small and medium businesses(Shopify, 2023). Competition for AWS in cloud computing is Microsoft's Azure, which accounted for 23% of the market share against AWS's 34% in 2022(Gartner, 2023). Amazon remains ahead because of its diverse offerings of products and services, besides its huge scale.

Amazon is the undisputed leader in e-commerce, with a market share of approximately 38% of the U.S. market for 2022. However, Walmart, at 6.3%, is swiftly getting closer. In cloud computing, AWS leads the pack but reaches a level of extreme competitiveness from Microsoft and Google Cloud. This also makes Amazon stand out for its strong profitability-it earns a profit margin of 13% in e-commerce and 30% in AWS, both higher than the averages for the respective industries, showing how efficiently it operates(Yahoo Finance, 2023)..

Factors that will continue to challenge the growth are: inflation, disruption in the supply chain, and government regulations. Key opportunities driving success include: penetrating new markets; AI-driven personalization of shopping; and increasing sustainability focus. Amazon invests in improved logistics, better technologies, and employee training that puts the company in a very strong position with regard to benefiting from these trends and resolving challenges.

SWOT Analysis

The strong points of Amazon place it as one of the market leaders within the U.S. e-commerce with 38%, and 34% on the global level in cloud computing services. Its innovative edge, fueled by more than 2,500 granted patents, impressive AI, and advanced robotics capabilities that enhance operational efficiencies and customer experience. Economies of scale, with large logistics and distribution networks worldwide, decrease costs, while the strong brand recognition makes Amazon one of the most recognized names across the globe. However, the increase in the cost of operations, being under the scrutiny of regulators, and higher leverage-the debt has gone up from $31.8 billion in 2020 to $69.7 billion in 2022-pose challenges. This, however, puts Amazon at risk as it has become reliant on AWS for much of its profitability. This could also be seen in the market's reaction to fluctuations. Even with these vulnerabilities, opportunities such as emerging markets-SE Asia and Africa-expanding sustainability efforts, AI applications to further personalize experiences, and healthcare via telemedicine and pharmacy services-could help fuel growth. On the other hand, there are also quite a few threats that it faces, such as intense competition from Walmart, Shopify, Microsoft, and Google Cloud; economic uncertainty due to inflation and supply chain issues; increased regulation in data privacy and antitrust areas; and environmental criticism over its carbon footprint(Amazon, 2023)..

Challenges And Opportunities

The main challenges that Amazon needs to overcome in keeping up with competitive advantage include sustainability-related issues. On the positive note, the climate pledge was adopted; however, it is always a tall ask to achieve carbon-neutral supply networks, especially concerning its far-and-wide value chains. More investment in renewable energy is required, followed by electrifying the delivery fleets and efficient packing to a lot of extents to improve environmental credentials of Amazon.

Another significant challenge is regulatory scrutiny. Governments worldwide are putting a greater emphasis on antitrust practices and labor conditions in the gig economy. Amazon must be at the front of engaging regulators proactively to ensure that regulations are followed but also that business practices are fair. Internal policy enhancements will also be necessary to handle employee grievances and ensure workplace safety to reduce reputational risks.
As far as opportunity is concerned, it is an expanding field of emerging markets. Southeast Asia and Africa have a big scope, where internet penetration and a growing middle-class population are attracting more and more users toward themselves. Capturing market share in such regions will have to be effectively marketed and, finally, localized e-commerce solutions.

This will be driven by further innovation on Amazon's part as well. Such investments in new technologies, artificial intelligence, and machine learning into robotics will keep the internal mechanisms streamlined and facilitate a better customer experience. Moreover, such data analytics of creating personalized experiences for shopping along with optimizing supply chains will also allow Amazon to create a competitive edge.

Conclusion

Amazon's internal strengths include strong financial performance, innovative capabilities, and market leadership-all positioning it for future growth. Challenges related to sustainability, regulatory pressures, and increasing competition are some factors that will need to be met for long-term success. By seizing the opportunities presented by emerging markets and embracing new technologies, Amazon can remain at the forefront of both the e-commerce and cloud computing industries. Such a strategic position will ensure its continued dominance within a rapidly shifting global marketplace.

References

Amazon. (2023). Annual Report 2022. Retrieved from https://www.amazon.com/ir

Amazon Sustainability Report. (2023). Retrieved from https://www.amazon.com/sustainability

Gartner. (2023). Market Share Analysis: IaaS and Cloud Computing. Retrieved from https://www.gartner.com

IBISWorld. (2023). Global E-commerce Industry Report. Retrieved from https://www.ibisworld.com

Market Research Future. (2023). Cloud Computing Market Research Report. Retrieved from https://www.marketresearchfuture.com

Shopify. (2023). Annual Report 2022. Retrieved from https://www.shopify.com/investors

Statista. (2023). Amazon Patent Statistics. Retrieved from https://www.statista.com

Walmart Annual Report. (2023). Retrieved from https://www.walmart.com/annualreport

Yahoo Finance. (2023). Amazon Stock Historical Data. Retrieved from https://www.finance.yahoo.com