SWOT Analysis of Amazon

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Table of Contents

SWOT Analysis
Implications for Amazon’s Business Performance
Works Cited

Amazon Incorporation is a leading American online retailing company. Amazon operates different subsidiaries in 11 nations globally. The corporation offers a wide range of services and products to its customers.

Amazon’s online presence and logistical operations have made its business competitive and successful (Mennen 27). The SWOT Analysis below offers a detailed description of Amazon’s position and performance as a leading online marketer.

SWOT Analysis

Strengths

Brand Equity

Amazon is a “great name” among its consumers in 11 countries. The company’s brand is known for its ability to fulfill the needs and expectations of many people globally. Amazon’s brand equity has made the company a leading company.

Presence of Big Selection

Amazon is definitely a giant search engine. It offers cloud computing to other companies and businesses thus making its strategy successful. Amazon is a leading search platform alongside Google and eBay.

Digital and Hardware Ecosystem

Kindle devices have made Amazon successful. The current sales of Kindle products are making it easier for Amazon to sell e-books thus improving its business. Amazon continues to add more media content and digital products thus emerging successful in the industry.

Superior Services and Products

Amazon’s consumers admire the products and services because they address their needs. This has made the company a leading competitor in the industry.

Appropriate Distribution Channels

Amazon operates its business in different countries across the world. To make this process successful, Amazon has developed an efficient logistics and supply chain (Mennen 13).

Weaknesses

Taking on Competition

Amazon has tried to dominate new sectors and compete with existing giants (Mennen 13). This has resulted in losses that making the business less profitable. This means that Amazon should concentrate mainly on its core business.

Reduced Margin Businesses

Amazon records high volumes of sales that translate into low profits. The company has a huge market share but earns very little from the increased level of sales. Amazon’s profits are minimal in comparison to those of other retailers.

Online Presence

Although the company’s online presence is a major strength, it becomes a weakness because it is the only platform for marketing its products. This explains why the company is unable to market its products globally (Mennen 64).

Opportunities

Online Advertising

More people are using the internet today. Amazon stands a chance to benefit from this new development. The company can utilize the current use of the internet to advertise and market its products to the global consumer.

Consumer Groceries

In the recent past, Amazon began to market different grocery products using ‘mail space’. People are presently consuming such products than ever before (Damsch 29). This explains why Amazon will continue promoting a profitable business.

Expansions

Amazon is presently operating in many countries. The company has numerous opportunities to expand its business. The company can build its unique presence in different countries such as India, China, South Africa, and Brazil.

Online Payment System

The world is becoming digital. More people are using online payment methods to execute different transactions. Amazon can strengthen its business from this opportunity because more customers can pay instantly (Damsch 38).

Threats

Online Insecurity

Cybercrime and phishing have become common than ever before. Such online crimes target the companies like Amazon that operate their businesses online (Mennen 103). Hackers can attack the company’s website thus affecting its business.

Lawsuits

Amazon continues to face numerous legal challenges and lawsuits from different competitors and customers. Such lawsuits continue to affect Amazon’s performance.

Strategic Alliances

In the recent past, different companies have formed alliances to compete with Amazon. This means that Amazon should realign its business strategy in order to remain competitive and profitable in the online retailing industry (Mennen 13).

New Entries

The online industry continues to attract more companies and marketers than ever before. Smaller corporations like “Groupon Corporation” continue to dominate the industry (Damsch 64). This explains why Amazon might lose its business.

Implications for Amazon’s Business Performance

It is notable that Amazon is a leading online marketer despite the current threats and weaknesses. However, if the company is to remain competitive, it is necessary to consider some of the best business models in order to improve its business (Damsch 74). For example, the SWOT Analysis indicates that Amazon should focus on its core businesses.

As well, the company needs to advertise widely and invest in new markets. The company should design the most secure online systems and security measures to deal with hackers. With these considerations, the company will continue using its current strengths and opportunities to promote its business.

Works Cited

Damsch, Manfred. Amazon Marketing Strategy. New York: Longman, 2011. Print.

Mennen, Miriam. Global Corporate Strategy: A Critical Analysis. New York: John Wiley and Sons, 2010. Print.

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