Started as an online book store in 1994, The founder Jeff Bezos made sure to
fulfill its vision of making Amazon a E commerce and cloud computing
company which stands on four principles: customer obsession, passion for
invention, commitment to operational excellence, and long-term thinking.
According to Interbrand its current its current brand value stands at $200,667
million with +60% growth registered this year alone. Amazon success was
contributed to its carefully crafted strategies like collaboration with third
parties by allowing business to sell their products on website which provided
them with a broad product catalog and variety with a free knowledge base to
understand the consumer behavior and the market.
As the whole operation of amazon runs on the internet, it is dubbed as the king
of E commerce, the factors which contribute in making Amazon the largest E
commerce store are:
1. Personalized Shopping Experience: By analyzing the purchasing a
browsing history and the shopping behavior of the consumers, the
company puts these data to an excellent use to create a custom
advertising list, selling more items and creating a personalized shopping
experience.
2. A customer focused Approach: Amazon always tries to makes its
website user friendly the minute a consumer lands on its home page till
the order is confirmed the journey is smooth and does not waste time.
Amazon is also known for its customer service from discounts to free
two-day shipping facility along with prompt reply to customer problems
have helped amazon gain a loyal consumer base.
3. Loyalty Programs: Amazon launched Amazon Prime in 2005 and
positioned it as a paid membership service. Prime has evolved since then
and now offers multiple advantages such as special discounts, quicker
delivery, cloud storage, reduced or free shipping rates, cheaper prices;
unlimited access to various online movies, TV shows, music streaming
service Amazon Music, and Kindle lending library.
SWOT Analysis
Amazon’s Strengths – Internal Strategic Factors
1. Strong brand name – As a global e-commerce giant, Amazon has a strong
position and successful brand image in the market.
2. Brand valuation – According to Interbrand’s Global Brand Ranking 2020,
Amazon is ranked at #2 position (Apple at #1 and Google at #3), with a brand
value of $200 Billion.
3. Customer oriented – Amazon caters to a large number of customers for
everyday needs at inexpensive prices. This has made it a customer-oriented
brand.
[Link] number of acquisitions – The successful acquisitions of Whole Foods,
[Link], [Link], [Link], [Link], and many others have
produced significant revenues and profits for Amazon.
5. Involved into 3 key business – Amazon Marketplace, Amazon Web Services
(AWS), and Amazon Prime are 3 key businesses of Amazon which work and
support each other. As a whole, they generate massive profits and advantages
for the company.
6. Market Leader – With over $1 Trillion market capitalization and above $386
billion annual revenues, Amazon is truly a market leader in online retail
industry.
Amazon’s Weaknesses – Internal Strategic Factors
1. Easily imitable business model – Online retail businesses have become quite
common in this digital world. So imitating Amazon’s business model for rival
firms is not so difficult. A few businesses are even giving Amazon a tough time.
These include Barnes & Noble, eBay, Netflix, Hulu, and Oyster etc.
2. Losing Margins in Few Areas – In few areas such as India, Amazon has faced
losses. It’s free shipping to customers can be one of the reasons that expose
the risks of losing margins in some markets.
3. Product Flops and Failures – Its Fire Phone’s launch in the US was a big
failure while its Kindle fire device didn’t even grow well.
4. Tax Avoidance Controversy – Tax avoidance in Japan, UK and US has sparked
negative publicity for Amazon. President Trump criticized Amazon over taxes
on social media.
5. Limited brick-and-mortar presence – Amazon owns very limited physical
stores. This sometimes hinders to attract customers buy things which are not
sellable on online stores.
[Link] consumer safety – As its offerings increase, it is becoming a
challenge for Amazon to vet each product and guarantee the highest level of
safety.
Amazon’s Opportunities – External Strategic Factors
1. Amazon can gain the opportunity to penetrate or expand its operations in
developing markets.
2. By expanding physical stores, Amazon can improve competitiveness against
big box retailers and engage customers with the brand.
3. Amazon has the opportunity to improve technological measures and
organizational policies to reduce counterfeit sales. One case of counterfeit
sales came into light when Amazon sold a fake My Critter Catcher. The product
was sold for $1 less than the original product.
4. Can do backward Integration by expanding its production of in-house brands
such as Amazon basics to differentiate its offerings and improve profit margins.
5. More acquisitions of e-commerce companies can increase the company’s
market share and reduce the competition level.
6. Self Driving Technology – Amazon recently acquired California-based self-
driving startup Zoox Inc for whooping $1 Billion. It can now leverage
autonomous technology to exploit the increase in demand for ride-hailing
services or use it to improve its delivery network.
Amazon’s Threats – External Strategic Factors
1. Few controversies have caused a dent in Amazon’s brand image. People
critically reacted and boycotted Amazon sites in 2010 when they found that it’s
selling the book “The Pedophile’s Guide to Love & Pleasure: a Child-lover’s
Code of Conduct.”
2. Government regulations can also threaten the business proceedings of
Amazon in some critical countries. Amazon does not ship to Cuba, Iran, North
Korea, Sudan, and Syria.
3. Links to exploitative labor – Amazon is one of three retail giants facing
scrutiny from the US State Department for maintaining supply chains and labor
sources associated with human rights abuses. This exposes the ecommerce
giant to reputational, economic, and legal risks.
4. Increasing cybercrime can affect the network security system of the
company.
5. Aggressive competition with big retail firms like Walmart and eBay can give
Amazon a tough time in the future.
Competitors of Amazon
1. EBay : EBay is one of the top e-commerce competitors of Amazon. It was
founded by Pierre Omidyar in 1995, and now it has become the second
most popular marketplace after Amazon. Buyers can shop freely,
whereas sellers have to pay a certain fee once the item is sold after
limited listings of products for free. The company operates both B2B and
B2C sales efficiently, along with its C2C model.
Ease of Navigation: Yes, the website is easy to navigate at the simplest
level, eBay is composed of eight basic website areas.
1 The front page or feed at [Link].
2 Lists of the categories in which sale items can be found.
3 Search or browse results that list items for sale within a category or
based on your keyword searches.
4 Individual item listings giving price, description, and (usually) a photo
of the item.
5 Selling tools used to list your own items for sale.
6 My eBay, the page used to manage your own account, purchases, and
items for sale.
7 eBay Help, where you'll find instructions, rules, policies, and answers
to common questions.
8 eBay Community, where you can interact with other eBay users.
Visual Appeal: not much
Mission and Vision : At eBay, our mission is to provide a global online
marketplace where practically anyone can trade practically anything,
enabling economic opportunity around the world.
Vision: Our vision for commerce is one that is enabled by people,
powered by technology, and open to everyone.
Competitors of eBay : Walmart,amazon,Alibaba, JD,Flipkart
2. Walmart: Save Money, Live Better! That’s what Walmart is all about.
Walmart generates most of its revenue from physical department
stores, as about 90% of Americans live within 10 miles of Walmart store.
Moreover, Walmart announces a partnership with Shopify recently in
June. As a result, nearly 1,200 Shopify Sellers are united in this
marketplace currently.
Ease of navigation: The [Link] website seems to be set-up
relatively well. The pages are not full screen and this allows for
compatibility. Navigation is simplified within the site by having a 'flyout'
pane, as shown on the right, that comes out when a user clicks or hovers
on a department category at the left of the page with users has a visual
apple that engages the customers
Mission and Vision : Walmart's mission can be summarized as “helping
people around the world save money and live better – anytime and
anywhere – in retail stores and through eCommerce.” While its vision is
to “make every day easier for busy families.”
Competitors of walmart : ebay,amazon,Alibaba, JD,Flipkart
3. Ali Express: Famously known as ‘Amazon of China,’ Aliexpress is one of
the leading China-based online retail companies owned by Alibaba
groups. It connects manufacturers and retailers from around the world
to businesses worldwide. Unlike Amazon, Alibaba is the representative
between buyers and sellers. Alibaba has such an effective business
model that generates a worthy revenue of up to $72billion with millions
of users across the world.
Ease of navigation : Its user-friendly navigation and easy shipping and
payment processes has made AliExpress the second-most popular
eCommerce platform in the world.
Mission and Vision : help SMEs to succeed, and to make it easy to do
business anywhere.
Competitors of Aliexpress : Walmart,amazon,ebay , JD,Flipkart
4. JD (Jingdong) : JD is popular for its B2C services and commonly known as
Jingdong and formerly knowns as 360buy. [Link] was founded in China in
1998. JD’s online stores started operating in 2004 for customers. JD displays a
wide range of Chinese products at affordable prices where customers can
easily select the products they required, which later on delivered to the
[Link] website also has an option named ‘buy in bulk’ that directly
competes for head to head with Alibaba and Amazon. Jingdong has 305 million
active customers, and the numbers are still increasing annually.
4. Flipkart : Flipkart is one of the leading e-commerce company with 31.9%
market share in India which offers a wide range of apparel, furniture,
electronic appliances, cosmetics, and other useful products. The large
variety of different products attracts about 100 thousand registered
sellers. It provides a user-friendly interface that enables the customer to
place orders easily on the website or on the app with 24/7 customer
services.
Ease to navigate : The [Link] website seems to be set-up
relatively well. The pages are not full screen and this allows for
[Link] ecommerce giant, Flipkart, does this particularly
well as can be seen with their recent introduction of a ‘Women’s Store’
and a ‘Valentine’s Day Store’.
Mission and Vision : Flipkart Mission Statement
Ab har wish hogi poori!
Flipkart Vision Statement
To become Amazon of India
Competitors : Aliexpress : Walmart,amazon,ebay
