Final Paper- 3 Pages

Amazon Strength and Weaknesses

Allyson M. Rush

Rasmussen College

Amazon Strength and Weaknesses

Amazon refers to the largest online retailer in the world. The success of the company has spurred different retailers who sell products such as mortar, brick, and other products in the market. It brings together the retailers and connects them to the customers via its online platform. The market equates the company to Wal-Mart but from a virtual point of view. The company possesses a global footprint through pricing strategies that are aggressive. Amazon has the capabilities to leverage on the different opportunities in the market by focusing on implementing its strength and eliminating its weaknesses. It may be able to deliver substantial value for the different stakeholders found in the market. Furthermore, the company needs to rethink the business structure that operates at close to zero margins. Amazon has not made any profits in the last half decade, meaning that it needs to improve its status to acquire a huge market share (Pandit & Poojari, 2014). Furthermore, the company needs to restructure its business model from operating at close to zero margins to a more improved financial status. Amazon has in the past half a decade failed to make any profits at all. The above factor means that it needs to change for it to acquire a desirable share of the market. The paper discusses the company, its weaknesses and strengths.

Strengths of Amazon

Amazon possesses deep pockets and a strong operational background. It has succeeded in its business of selling books which have diversified into products such as games, white goods, and toys among other products. The company has evolved to become a global e-commerce firm for the last two decades. The business model of Amazon is built with a robust customer relation management system which records the data related to the customers’ purchasing behavior. The company has the capabilities to provide the customers with individual items based on their preferences and the number of visits to the site. The nature of the Amazon site operates at a low cost regarding acquiring new customers in the market. For differentiation purpose, Amazon has developed several strategic partnerships with other firms to provide superior customer services in the market (Hassan, Sistani, & Raju, 2014). Some of the strategic plans focus on pricing and cost of products. The above factor influences a strong value chain that lowers the inventory within the shortest period possible. Amazon has been able to create a huge and heavily structured distribution network that escalates to the availability of its products in the market, also works in remote areas. The company also possesses free delivery charges in some geographies. Amazon has made several acquisitions of companies such as woot.com, IMBD.com, and Zappos.com which has generated great revenues.

Weaknesses of Amazon

Amazon experiences shrinking margins due to price wars and extensive nature of the market delivery network. The shrinking margins motivate great losses. The company has also attracted negative publicity due to avoidance of tax in countries such as the United Kingdom and the United States. The country acquires most of its revenues from margins with well-established markets. Amazon possesses high debt in the market because it does not make any profits in some countries. The above affects the general profitability of the company which influences high debt. The fire phone launched by Amazon in the United States was a major flop (Pandit & Poojari, 2014). The Kindle fire also failed to pick the Kindle product. The several products that flopped cause a major dent in the company’s accounts.

Conclusion

The company should implement innovative business strategies and a flexible model with a global status that influences it to strengthen its financial status in the market. It needs to diversify its products and services to meet both individual and corporate needs. The above factor needs fresh thinking and new dynamic approaches via its strategy. Amazon should align its objectives with low-cost leadership to drive success in the quality of services and products.

References

Hassan, S., Sistani, A., & Raju, R. (2014). Top Online Shopping E-companies and their Strength and Weakness (SWOT). Research Journal of Recent Sciences.

Pandit, D., & Poojari, A. (2014). A study on amazon prime air for feasibility and profitability--a graphical data analysis. IOSR Journal of Business and Management, 16(11), 06-11.