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Elijah Bailey
Professor Humphries
Business Administration
9-15-21
Amazon’s Situation Analysis
Situation analysis or SWOT is the internal strengths, weaknesses, external opportunities, and threats that help a business understand where it may stand in the world. The swot analysis is a type of strategic tool used to help companies plan, as they are constantly evolving internally and externally. It is an often-used strategic tool in firms all around the world, to help businesses strategically plan. For instance, Amazon uses situation analysis to identify its competition and to find ways to keep its competitive advantage against other companies. Amazon began on July 5, 1994, by CEO Jeff Bezos, as an online book shop in his carport, and afterward, he changed it into one of the world’s biggest online retail marketplaces. By identifying the company’s strengths, weaknesses, external opportunities, and threats Amazon had the option to expand its company’s influence and carry out business overseas.
Amazon, being one of the largest companies in the world, has many strengths that help give the giant e-commerce company an upper hand in the market. Amazon has a strong brand name that is recognized around the world in many different countries. Their logo is a smile that has been very beneficial in the company, as it helps Amazon to be successful and reliable as it delivers products and services to its customers every year. The brand name Amazon is worth a total of 415 billion dollars. Their logo is important because it helps Amazon sell hundreds of different varieties of products from A to Z. That alone shows people just how big the market is and how it continues to grow in the future. The company has a very secured market position being the largest in North America it competes with the likes of Walmart and eBay. There is only one main rival in Amazon’s emerging markets, which is Alibaba. Their position comes from their corporate ethos of robustness, which helps keep their prices low and their customer’s and clients’ value maximized. To keep the position of the market leader, it invests in the future by using Amazon Prime to help with service errors. They have used improvement logistics and delivery tactics by managing a multitude of individuals, third-party sellers, and clients by partnering with delivery businesses, and by turning facilities into 247 operations during the holidays. Amazon also has the biggest influence of independent partners, which creates opportunities for individuals and companies across the country to be able to reap all the benefits that Amazon has to offer. Go Global and Act Local procedure is used by Amazon and the best advantages feasible for them have been because of this system. From that point onward the association with neighborhood supply chains and in reverse incorporation helped as well. Also, essential item situation, and understanding neighborhood needs before dispatching administrations by the nation’s way of life have helped as well. Inferable from these, it stays on top even while contending seriously with different opponents. The last strength that Amazon has to offer is that it hires workers at 15$ an hour. It has positions for full-time, part-time, and seasonal times which helps open more job opportunities now and later. These strengths have helped Amazon keep the lead on its competition as it continues to evolve around its competitors as time goes on.
Amazon has a lot of weaknesses that the company needs to improve on. The internal qualities and resources that make it difficult for companies to reach successful outcomes in the company. Often, many companies have weaknesses that are inhibitors of future success. Unfortunately, Amazon’s business model is being copied quite easily. Since there is a pandemic due to Covid 19, the online economy has increased significantly causing local and national players to take up the market. Due to low cost, players continue to persuade customers to operational or core abilities. For instance, grocery divisions are highly competitive to meet consumer requirements to meet the growing demand. The near-zero margin business model is a major weakness that many players operate within, which often affects profitability. Even though the company Amazon has high revenues and volumes at a constant rate, it fails to make profits meaningful for the firm. The company’s “Amazon Indian Festival” was not living up to its name since its high profits the company despite breaking sales records annually for the mega sale. By allowing free shipping under $25 the company can be exposed to a threat even though it constantly has managed to stay afloat. Amazon is constantly hurting the brand’s image by doing fake reviews and ratings for the company. The company engages in inferior quality and often sells products under the brand name Amazon Basics. Which is selling higher-rated products at lower prices. In countries like India, there are no physical inhibitors that will stop them from reaching untapped market potential. Using the swot analysis, Amazon can get a sense of what weaknesses they need to improve as they evolve.
Amazon has many opportunities that need to be analyzed by the swot or situational analysis. In the swot analysis, opportunities are described as external factors that can give the company a competitive advantage over its competitor’s growth through an international e-commerce market. Some of these opportunities are expansion in developing markets, expansion of brick-and-mortar business operations, and new partnerships with other firms, in developing countries. Amazon can break into developing markets. This move should establish the company’s presence before other large e-commerce companies gain a foothold, giving it a stronger competitive advantage. Regarding the weaknesses considered by Amazon.com Inc. in this SWOT analysis, there is an opportunity to develop the company’s physical business. In addition to the existing Amazon Go stores, this external factor is related to the potential increase in sales brought about by building a stronger influence through more physical stores. In addition, the ability to establish new partnerships with other companies is an external strategic factor that companies can use to expand their influence in the global e-commerce industry. In addition, cooperating with companies with good corporate citizenship can increase the impact of Amazon’s corporate social responsibility strategy and stakeholder management. Companies can use these external factors to increase market coverage and revenue. Therefore, this aspect of the SWOT analysis shows that Amazon can continue to grow despite increasing market saturation.
Amazon faces many threats in aspects of the situation analysis. These threats are viewed as external factors of the situation analysis that help identify problems the company may be opposed to that are outside of the organization. There is fierce competition in most of Amazon’s markets. This is why strategic partnerships take place to take on competition. For example, an illustration of this is the association as of late declared among Walmart and Shopify permitting a half-and-half ‘Snap And-Mortar’ insight. Moreover, the consideration of commercial centers via online media stages, combined with the ascent of ‘powerhouse advertising’ is further affecting the fate of Amazon. Majority of consumer claim that social media influences their decision to buy. Amazon is consistently dealing with third-party sellers using their program to sell fake items. With a huge organization of outsider merchants, it is now and again hard for the insightful purchaser to recognize which vendors are selling real things, and which are not. This is built up by Amazon’s concern with counterfeit surveys on its items. Amazon has created items to alleviate the appropriation of phony items, however the issue endures. Governments have designated Amazon as they ponder strategy changes to block its exercises. Amazon’s size has raised banners with government organizations, with charges of extortion, charge aversion, and antitrust issues. As of late, Amazon and Apple experienced harsh criticism when Amazon hit an arrangement with Apple to eliminate outsider vendors of Apple items from its foundation. Amazon has been blamed for monopolistic inclinations over its outsider merchants, constraining 80% into its Buy-Box appropriation organization (CNBC). Amazon catches outsider information on its clients’ customers to construct items under its mark. The reverse mix is a methodology that has been recognized by Amazon to catch more benefits through its retail stages. By fostering its private-name items, Amazon has more authority over its market. As of late, partners have raised worry over the utilization of outsider information to additional improve its private mark items, at the expense of the proprietors of the outsider dealers – the generators of this information. This is viewed as an absence of sincere trust in its tasks. Amazon expects that its private-mark brands should make up 10% of retail deals (Business Insider). Half of Amazon’s item dispersion is dealt with by rethought providers. A critical upper hand of Amazon is its capacity to meet tight conveyance plans, which is incorporated into its offer. Amazon reevaluates half of its item dispersion which opens itself to outside hazards that can affect its activities. Amazon should take a gander at bringing its full strategic and circulation necessities into its area to relieve these dangers. Some of these threats continue to be constantly threatened like cyberattacks. Even though Amazon keeps an immense information base of its customers’ subtleties, security breaks have been restricted. Its network protection group is known to act quickly and successfully in impeding assaults on its frameworks. Albeit these frameworks are viable, pernicious assaults are turning out to be progressively complex. Amazon Web Services (AWS) upset a 2.3 Tbsp. High Volume Ddos assault on its workers – 44% bigger than anything the organization had recently experienced (Online Protection Insiders).
The swot analysis was one of the strategic tools used to gain a competitive advantage over the competition. By analyzing their internal strengths and weaknesses they can get a sense of the things they are strongest in and find ways to overcome them. Using the swot analysis to observe the company’s external opportunities and threats the company can see the possibilities of improving the company, however, they can also see what potential threats are possibly happening. From starting as an online bookstore to becoming one of the world’s retail organizations ever is truly a miracle. In all by strategically planning Amazon can continue to soar higher than its competitors and continue to expand. This tool helps them gain insight into how the company is running internally compared to how it runs outside. Planning using the swot analysis is very strategic and helps the company identify its goals and gain insight into certain objectives that the company may deal with. For instance, the company can develop through ventures into new online business markets, particularly in high development-creating economies. Notwithstanding, the shortcomings and dangers recognized in this SWOT examination expect Amazon to think about updating a portion of its procedures. In any case, the business stays solid and is one of the greatest innovation firms in the worldwide market. The rise of Amazon has thrown its originator and Executive Chairman, Jeff Bezos, to maybe the most luxurious person on earth. With a proactive, creative mentality and ethos, the possible destiny of Amazon is secure as a head overall retail awe-inspiring phenomenon.
Works Cited
- Gaille, B. (2021, March 24). Amazon SWOT Analysis Matrix: Opportunities and Weaknesses. BrandonGaille.Com. https:brandongaille. com amazon-swot-analysis
- Vishwal, S. (2021, March 8). SWOT Analysis of Amazon [Detailed]. Super Heuristics. https:www.superheuristics.comswot-analysis-of-amazon
- Greenspan, R. (2019, June 22). Amazon.com Inc. SWOT Analysis
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