BANKING UNIVERSITY OF HO CHI MINH CITY

DEPARTMENT OF BUSINESS ADMINISTRATION

—o0o—

FINAL EXAM
STRATEGIC MANAGEMENT

Full name: Nguyễn Thị Thảo Nhi

Student ID: 050606180278
Class Code: MAG313_2111_6_L07_TA
Lecturer: Phạm Hương Diên

Ho Chi Minh City, November 14, 2021

Contents
CHAPTER 1: ABOUT AMAZON.....................................................................................................3
1.1 Amazon Profile..........................................................................................................................3
1.2 Amazon’s Vision........................................................................................................................4
1.3 Amazon’s Mission......................................................................................................................4
1.4 Amazon’s Objective...................................................................................................................4
1.6 Amazon’s competitive position.................................................................................................6
1.7 Amazon’s Products....................................................................................................................6
1.8 Amazon’s Customers.................................................................................................................7
CHAPTER 2: ANALYTICAL TOOLS EFAS, IFAS AND SFAS...................................................7
2.1 IFAS of Amazon.........................................................................................................................7
2.2 EFAS of Amazon.......................................................................................................................9
2.3 SFAS of Amazon......................................................................................................................12
2.3.1 A suitable strategy for Amazon........................................................................................14
2.3.2 Advantages........................................................................................................................15
2.3.3 Disadvantages:..................................................................................................................16
CHAPTER 3: CONCLUSION..........................................................................................................16
REFERENCES..................................................................................................................................17

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LIST OF TABLES
Table 1 IFAS Tables..............................................................................................................................9
Table 2 EFAS Tables...........................................................................................................................12
Table 3 SFAS Tables...........................................................................................................................13

LIST OF FIGURES
Figure 1 Amazon Profile.......................................................................................................................3
Figure 2 Amazon logo...........................................................................................................................4
Figure 3 Amazon's competitive position................................................................................................6
Figure 4 Amazon's Products..................................................................................................................7

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CHAPTER 1: ABOUT AMAZON
1.1 Amazon Profile

Figure 1 Amazon Profile

Amazon.com, Inc is an American multinational technology company which focuses
on e-commerce, cloud computing, digital streaming, and artificial intelligence. It is one of the
Big Five companies in the U.S. information technology industry, along with Google, Apple,
Facebook, and Microsoft. The company has been referred to as "one of the most influential
economic and cultural forces in the world", as well as the world's most valuable brand. Jeff 
Bezos founded Amazon from his garage in Bellevue,Washington, on July 5, 1994. It started
as an online marketplace for books but expanded to sell electronics, software, video games,
apparel, furniture, food, toys, and jewelry. In 2015, Amazon surpassed Walmart as the most
valuable retailer in the United States by market capitalization. In August 2017, Amazon
acquired Whole Foods Market for US$13.4 billion, which substantially increased its footprint
as a physical retailer. In 2018, its two-day delivery service, Amazon Prime, surpassed 100
million subscribers worldwide.

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 Figure 2 Amazon logo
1.2 Amazon’s Vision
Amazon vision is to be earth's most customer-centric company; to build a place where
people can come to find and discover anything they might want to buy online.
1.3 Amazon’s Mission
Amazon mission is to continually raise the bar of the customer experience by using
the internet and technology to help consumers find, discover and buy anything, and empower
businesses and content creators to maximise their success.
1.4 Amazon’s Objective
The main goal of the company pursues more long-term objectives to improve their
customers’ experience.
1.5 Amazon’s Current Business Strategy
Amazon business strategy is guided by four principles: customer obsession rather than
competitor focus, passion for invention, commitment to operational excellence, and long-
term thinking. The following four points constitute the cornerstones of Amazon business
strategy:
● Regularly entering into new niches and segments. Started only as an online shop
for selling physical books in 1997, today Amazon sells anything that can be sold
online on a global scale. Sophisticated global logistics represents one of the solid
bases of Amazon competitive advantage. The tech giant has used this advantage
extensively to engage in successful business diversification. Recently, the company
launched Amazon Home Services, a simple way to buy and schedule local
professional services as a continuation of its diversification strategy. The e-commerce
giant occasionally finds new niches and segments accidentally, while looking for
solutions to problems faced by the business. Amazon Web Services (AWS) can be
shown as a stark example for this. Specifically, back in 2000 Amazon was struggling
to keep up with the high growth speed of the business and scale problems. The
company developed internal systems for its own needs to run infrastructure tasks such

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 as computing, storage and database. Moreover, by 2003 the company had become
highly skilled at running reliable, scalable, cost-effective data centres out of need.
Around that time, the management figured out that many other companies faced the
same scaling and data management issues. Accordingly, AWS was developed to help
companies to deal with these issues in a profitable way for Amazon.
● Strengthening Amazon ecosystem. Ecosystem is placed at the core of Amazon
corporate strategy. The Amazon ecosystem consists of merchants, writers, reviewers,
publishers, apps developers, and the information market of commentators, analysts,
journalists and feature writers who get the word out about opportunity on the Amazon
platform. Amazon senior leadership engages in deriving maximum benefit from each
component of the company ecosystem, as well as, strengthening relationships between
the components. Therefore, due to aggressive expansion of the range of products and
services within the Amazon ecosystem, it would not be correct to classify its business
operations within a single industry. As it has been noted by the company's vice
president of user experience “Amazon is in the business of taking the right decisions
for customers”.
● Uncompromised focus towards customer service. Customer obsession can be
specified as a cornerstone of Amazon business strategy. The largest internet retailer in
the world by revenue focuses on long-term growth rather than short-term profit. In its
attempt to “seek to be Earth’s most customer-centric company”, Amazon does not
bother with the competition too much. Instead, it has been noted that “Amazon puts a
chair in every boardroom to represent the customer — a physical reminder to innovate
on their behalf.”
● Focusing on Amazon leadership values. Gaining maximum contribution from
human resources is another source of Amazon competitive advantage. Working for
Amazon is a highly challenging experience and employees are expected to take on a
heavy workload, often sacrificing work-life balance. Amazon leadership values
consisting of 14 principles, such as customer obsession, insisting on the highest
standard and diving deep, play an instrumental role in terms of increasing the input
from human resources.

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1.6 Amazon’s competitive position

Figure 3 Amazon's competitive position

Amazon’s competitive position is the results of integrated strategies. This is a difficult
position to achieve and firms have to be careful in order to not be blocked in the middle.
However, Amazon has been successfully integrating a Cost Leadership position together with
a differentiation position. A key success of Amazon is that they are able to offer low prices
and at the same time, be considered a unique place to buy any type of products. Moreover,
this is always in a broad competitive scope. Another strategy that Amazon has is its fast
delivery service and there are many delivery services that one can choose from. With
Amazon Prime, there are certain, but many products that have free two-day shipping. Also,
with Amazon Prime, there are many offers specifically for people that have Amazon Prime.
1.7 Amazon’s Products
Amazon.com sold a wide variety of products; Amazon product lines include (books,
DVDs, music CDs, videotapes, and software), apparel, baby products, consumer electronics,
beauty products, gourmet food, groceries, health and personal-care items, industrial &
scientific supplies, kitchen items, jewelry and watches, lawn and garden items, musical
instrument.

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 Figure 4 Amazon's Products
1.8 Amazon’s Customers
Amazon's target market is middle and upper-class consumers (evenly split between
genders) with home computers or smart devices aged between 18-44 as of 2021.
Additionally, 60% of Amazon's target market are from the United States who prefer shopping
online for convenience, fast delivery, and competitive prices.
CHAPTER 2: ANALYTICAL TOOLS EFAS, IFAS AND SFAS
2.1 IFAS of Amazon
● Strengths:
- Strong Brand Name: Over the years, Amazon.com has been the leading firm in the online
retail world. Their rapid growth of the business is mainly considered because of the brand
recognition and confidence among the customers.
- Strong Financial Position: A strong financial position is another strategic competence that
helps the company to accomplish different opportunities in the industry. According to the
author Samuel (2019), “Amazon’s net profit for the year 2017 was $3.033 billion with an
asset base of $131.31 billion”. Their strong financial position has indeed helped the company
to boost itself up in the online retail sector.
- Customer Oriented: The company is highly customer oriented and has the best CRM
system. Amazon has a complex CRM system that helps the continual flow of details between
the company and its customers. Also, the company has been advancing in the information
communication technology to improve their CRM which helps the company to get back to
the customer’s on time and enhance their service delivery.
- Delivery on time: There is no company like Amazon in the retail world, who tends to
deliver the product on the same day. Their fast delivery service is the main reason to attract

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the customers. In some areas, the company makes deliveries without the fees due to the
ability to minimize distribution cost or the 2 days maximum time.
- Cost Leadership and Diversification: Cost leadership and Diversification is also the main
internal strength of Amazon. Amazon has been continuing its business on a thin profit margin
which allows the sales maximization and allows competitive pricing. Some companies’
beliefs are high- profit margin and some are low. And Amazon comes under those low
margin companies and is the reason for their popularity.
● Weakness:
- Narrow profit margin: The result in decreasing profit margin can hollow the company’s
solid financial position. In a big country like India, the company has been losing their profit,
which elevates the question of sustainability of thin profit margin. The low-cost advantage
has been a rising threat due to the increasing competition.
- Imitable business model: We cannot deny that Amazon has an easily imitable business
model. For example, there are other companies like eBay and Alibaba that sell the same
product as Amazon including Barnes & Noble for Amazon’s Kindle.
- Limited Brick-and mortar presence: The company’s limited brick-and-mortar appearance
is a blockade for the growth in the non-online market which means Amazon owns very
limited physical stores
- Over Dependence on distributors: Amazon’s reliance on distributors exposes the company
to various risks. One of its primary distributors (German Logistic Group – Deutsche Post
DHL) may be able to renegotiate arrangements.
- Quality focus: Amazon is focused on improving product search, the convenience of
purchase, and shipping speed. As a result, Amazon cannot check the veracity of claims or the
quality of products sold on its marketplace. This could lead to people migrating to more
reliable platforms.

Internal Factors Weight Rating Weighted Comments

Score

Strengths

S1: Strong Brand 0.15 4 0.6 a leader in the BrandZ

Name rankings of the top 100 global
brands

S2: Strong 0.1 4 0.4 Amazon is the largest Internet

Financial company by revenue in the
Position world.

S3: Customer 0.1 4 0.4 Caters to a large number of

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 Oriented customers for everyday needs
at inexpensive prices.

S4: Delivery On 0.15 4 0.6 Tends to deliver the product

Time on the same day.

S5:Cost 0.2 4 0.8 Amazon business strategy can

Leadership and be described as cost leadership
Diversification and diversification

Weakness

W1: Narrow 0.06 3 0.18 Affect the position and finance

profit margin of the company.

W2: Imitable 0.05 4 0.2 Online retail businesses have

Business Model become quite common in this
digital world.

W3: Limited 0.05 4 0.2 Very limited physical stores.

Brick- and
mortar presence

W4: Over 0.1 2 0.2 A wide range of issues

Dependence on
distributors

W5: Quality 0.04 3 0.12 Product quality is not

focus reputable

Total Scores 1.00 3.7

Table 1 IFAS Tables

2.2 EFAS of Amazon
● Opportunities
- Backward integration: Expand offerings such as AmazonBasics into other segments such
as electronics and essentials. This will again promote the brand to customers, offer
differentiated products backed with customer-demanded features and expectations (from
customer analytics), and improve profit margins (since you will also earn from the product,
rather than just supply)
- Coronavirus Outbreak: Despite most of the companies around the world shutting down or
shrinking their businesses, Amazon has been going strong. Although, as with nearly every
company in the world, took a hit when the outbreak first affected the United States, it has got

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back on its feet. Amazon can continue employing people (with the safety and health
conditions required) and also supply the customers their needs without them leaving their
homes.
- Developing Technologies: As Amazon acquires its competitors, it also gets its hands on
start-ups which promise hope and developing technologies such as artificial intelligence and
space travel. Its space travel ambitions lie with the company Blue Origin. Amazon not only
acquires these companies but also helps the technology develop and create new ways for the
people on Earth to live their life better.
- Expand physical stores: While buying a stake in Future Group was a good decision for
Amazon, they still need to expand the presence of their core brand “Amazon” by partnering
with leading retailers. This will help in establishing a wider presence and visibility of the
brand, much beyond online deliveries, and into a retail giant.
- Acquisitions: More acquisitions of e-commerce companies can increase the company’s
market share and reduce the competition level.
● Threats
- Cybercrime: Data theft is the most common modern-day criminal activity that is putting
internet users at an increased risk. Further, there is a lack of awareness of the consequences of
identity theft & hacking among the larger public. They can easily be conned by hackers into
sharing personal details like bank account details.
- Government Regulations: During the first few months of the pandemic, the Indian
government prohibited non-essential products on Amazon. The ban cost the company $398
million. Local retailers were also favored by government policies more than the e-commerce
business. Such policy adjustments are and will continue to be a danger to Amazon’s domestic
and international expansion
- Labor exploitation: US government investigation into Amazon’s supply chains and labor
sources for violating human rights is one of three investigations the State Department is
conducting. The e-Commerce behemoth is put at risk as a result of reputational, economic,
and legal liabilities.
- Fake Products : The increase in counterfeiting and fake products threatens Amazon’s
profits. The company recently filed a lawsuit against New York-based online retailer for
allegedly counterfeiting Valentino shoes, a luxury Italian shoe brand offered by Amazon.
- Rivalry: Walmart launched the Walmart Fulfillment Service. With the advent of this
product, third-party sellers now have an option to Amazon. Although the market share gap
between Amazon and its nearest competitor is enormous, it is projected to narrow in the next
few years.

External Weight Rating Weighted Comments

Factors Score

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Opportunities

O1: Backward 0.05 4 0.2 Expand sales segment

Integration

O2: Coronavirus 0.25 5 1.25 Strong success thanks to the

Outbreak Covid -19 pandemic

O3: Developing 0.1 4 0.4 Develop space travel,

Technologies programs about technologies
industry.

O4: Expand 0.05 3 0.15 In association with famous

physical stores retailers

O5:Acquisition 0.1 4 0.4 Reduce competition and

increase market share

Threats

T1:Cybercrime 0.15 4 0.6 Data theft is a big danger

T2: Government 0.1 2 0.2 Many laws have been enacted

Regulations that impede trade

T3:Labor 0.05 2 0.1 Put at risk as a result of

exploitation reputational, economic, and
legal liabilities.

T4:Fake 0.1 3 0.3 Reduce customers' trust in

Products online shopping

T5:Rivalry 0.05 4 0.2 The appearance of many

competitors makes the market
share narrow

Total scores 1.0 3.8

Table 2 EFAS Tables

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2.3 SFAS of Amazon

Strategic Weight Rating Weighted Duration Comment

Factors Score
Short Intermediate Long

Cost 0.15 4 0.6 x Amazon

Leadership business strategy
and can be described
Diversificatio as cost
n (S) leadership and
diversification

Delivery On 0.1 5 0.5 x Tends to deliver

Time (S) the product on
the same day.

Over 0.15 4 0.6 x A wide range of

Dependence issues
on
distributors
(W)

Imitable 0.05 3 0.15 x Online retail

Business businesses have
Model (W) become quite
common in this
digital world.

Coronavirus 0.2 3 0.6 x Strong success

Outbreak (O) thanks to the
Covid -19
pandemic

Developing 0.1 4 0.4 x Develop space

Technologies travel, programs
(O) about
technologies
industry.

Cybercrime 0.15 4 0.6 x Data theft is a

(T) big danger

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 Fake 0.1 3 0.3 x Reduce
Products (T) customers' trust
in online
shopping

Total Scores 1.00 3.75

Table 3 SFAS tables

- Cost Leadership and Diversification (LONG) In order for Amazon to succeed with the cost
leadership strategy it has to deliver the broadest variety of products to achieve the economies
of scale and benefit from the low costs of exhibiting those products on its online marketplace.
Moreover, Amazon Web Services (AWS) is a good example of diversification strategy
employed by Amazon in order to increase its revenue and market shares. Because these
knowledgeable and experienced top managers totally understand vision, mission, objectives
and SWOT of Amazon, they can optimize long-term strategies to maximize Amazon’s
success.
- Delivery On Time (INTERMEDIATE) Amazon is famous for its lightning speed of
delivery, but the Covid-19 pandemic has changed that. The perks that customers expect from
the site, such as free, two-day shipping and an endless library of affordable products, are no
longer guaranteed. Therefore, Amazon should change its delivery policy immediately to
ensure its benefits as well as increase the number of loyal customers.
- Over Dependence on distributors (LONG) Amazon makes a considerable profit from its
North American customers, compared to any other parts of the world. But it can’t continue to
fish in one place alone. The company must re-strategize to penetrate and replicate her success
in other markets successful. This is a long-term strategy to find reputable distributors to help
Amazon strengthen its trust and source stability.
- Imitable Business Model (LONG) The company’s business model is so easy for anyone to
copy. And as a consequence, any business person can study their model and provide an e-
commerce platform that can make the new business a customer favorite. Some e-commerce
platforms are already causing Amazon some sleepless nights. These include companies like
Netflix, eBay, and Hulu, among others. Therefor, Amazon should have long – term strategies
to differentiate itself from competitive
- Coronavirus Outbreak (SHORT) During pandemic of Covid - 19, Amazon have a short -
term strategic reduction or pause of purchase orders for non-essential items. Products not
considered household staples, medical supplies, or other high-demand products are directly
affected.
- Developing Technologies (LONG) When it comes to funding its R&D (research and
development), only a handful of companies can match Amazon. The company invests billions
of dollars in research every single year, and the figure keeps rising yearly. Technology is a
long-term strategy because, in the AI era, businesses can be at any time at risk as technology

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is constantly changing at a faster and more widespread pace, so businesses need to have a
long-term strategy to guide the organization in the right direction.
- Cybercrime (LONG) Recognize cybersecurity as a long term strategic priority: with active
digital transformation, it is necessary for Amazon to stay alert to digital risks, placing them
alongside other threats in the company’s risk profile. These shall constitute the basis for a
cybersecurity strategy, in which both the CEO and CISO should be involved.
- Fake Products (LONG) The rise of counterfeit goods and other phony products sold on the
Amazon has been swift—and it has largely gone unnoticed by many shoppers. Amazon has
come up with many strategies to check QR codes, return goods if they detect fake goods. This
is a long-term strategy to help Amazon thoroughly handle the situation of fake and poor
quality goods.

2.3.1 A suitable strategy for Amazon

Based on SFAS above and the context of Amazon, Amazon should decide to use
Growth Strategy: Product Development - Using Technology to gain competitive advantages
and develop new products. According to Prachi M (2018) Product development refers to the
creation of a new product which has some utility; or up-gradation of the existing product; or
enhancement of the production process, method or system. In simple words, it is all about
bringing a change in the present goods or services or the mode of production. This typically
might involve the creation of a brand new product, process or service from scratch, or by
taking one that already exists and substantially improving it. However, the overarching goal
is ultimately to boost company profit.
Amazon should invest in the development of consumer electronic products through its
hardware and software capabilities, as well as on the development and use of automation and
other technological applications that would help its operations. Besides that, the company
should also develop clean energy technologies such as wind and solar power through solar
panels. Independence from the power grid would help the company drive down costs
associated with energy consumption, while also fulfilling its corporate social responsibility.
Developing new products is a great way to increase profits and grow for the Amazon brand.
Here are some key advantages and disadvantages of expanding Amazon product lines:
2.3.2 Advantages
- Respond to customer demands: At Amazon, there are many products for sale, but
developing more new products will serve many different types of customers.
Especially if Amazon's seeing multiple requests for a particular product or variant,
Amazon already has validation it will sell.
- Reach new customers and break into new markets: Offering more products gives
Amazon the potential to appeal to a broader audience. Appealing to more prospective
customers allows the ability to sell on more channels or in more stores.
- Diversify Amazon offerings: It’s easy for one SKU to get lost on a shelf in a sea of
similar products. Having diversified products creates a recognizable brand as opposed

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 to a seller of a one-off product. Creating new products also enables Amazon to fill in
any existing gaps in your current offerings.
- Create value: Customers and potential customers see value when companies utilize
differentiation strategies that focus on price against other similar items on the market.
- Innovation and idea generation: The new product development process is a driver
and promoter of new ideas for business. By having the framework to test the viability
of new ideas laid out, it’s only natural that this will lead to its implementation (as
opposed to more ad hoc methods of idea creation that have higher likelihoods of
failure). Developing and nurturing a culture of innovation is crucial to individual and
commercial growth of staff and the business.
- Marketing strategy: The new product development process can help formulate
Amazon marketing strategy for the products the company intends on releasing. This is
the natural course of action once a company concept has been designed and tested,
and from a time perspective, would make sense during the production phase.
- Develop an effective business analysis: The business attractiveness of a new product
can be formulated after its suitability for the market has been determined. This can
include cost projections and profit predictions, and how the company’s overall
objectives will be met by the release of this new product. These should be compared
against data of products released in the past, whether by the company or competitors.
A new product development process can help make this happen.
- Seizing opportunities. As consumer tastes and interests evolve, a product
development strategy can help Amazon leverage opportunities to market to these new
preferences. If company efforts are successful and correctly read upcoming trends,
Amazon puts the company in the position of potentially sparking a fad or riding the
wave of one that has already been set in motion.
2.3.3 Disadvantages:
- Riskiness. It's safer to stick with something that company and customers already
know than to venture into untested territory. New products come with a world of
uncertainty, from ironing out unfamiliar production processes to introducing
customers to offerings that they may or may not want. If Amazon product
development strategy isn't successful, Amazon will need to absorb the investment
you've made without returns to offset the expenditures. (Fire Phone such an example).
- Extra cost. A product market and development strategy can be expensive, especially
if companies are thorough and invest in processes such as market research and
advertising. Even if Amazon's new offerings are eventually successful, the company
will still be faced with considerable expenses before your new products bring in any
significant revenue.
- Evolving markets. Although new product development is a proactive response to a
continually changing landscape of customer tastes, those same tastes will continue to
evolve even as Amazon's developing new products. Things that interest customers

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 when Amazon begins the product development process may no longer seem as
exciting by the time Amazon is ready to take a new product to market.
- Competition. At the same time Amazon business is scrambling to come up with the
next exciting product that customers will embrace, company competition is also
working hard to solve the same problems. It's sometimes not enough to come up with
something innovative –Amazon may also need to get it to market before someone else
does. Failure to do so may make all company hard work irrelevant.
CHAPTER 3: CONCLUSION
The e-commerce industry is one of the fastest growing and most successful sectors in
the world. Nowadays changing the business environment, competition is increasingly intense
as today, every business needs to find a correct direction to keep up with the new trends,
constantly improving the position of enterprises in the trade school.
Amazon is the largest online retailer in the United States. Amazon started as an online
bookstore, but it quickly expanded to all sorts of different verticals, including electronics,
fashion, and home goods. To be as successful as it is today, Amazon has had appropriate
business strategies to help generate a lot of potential customers and expand the market. At
Amazon there are many opportunities for further growth in the future when having strong
technical and financial resources is an opportunity for Amazon to have many growth
strategies - especially in developing new products. Moreover, Amazon has an abundant
human resource team and they are working non-stop to achieve their goals. With this growth
rate, Amazon will dominate the retail market as well as reach many classes of customers all
over the world

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