AMAZON

SWOT analysis

Owner : Jeff Bezos

Employees: 500.000

Revenue: $135 billion

#1 selling e-tailer in the world

300 million active customers

2 billion items sold in 2017 Q1

What we should now about Amazon? Amazon is the world’s largest online retailer and a prominent
cloud service. It was launched in 1995 with the mission “ to be the Earth most customer – centric
company “. The company was originally a book seller but has expanded to sell a wide variety of
consumer goods and digital media as well as its own electronic devices, such as the Kindle e-book
reader, Kindle Fire tablet and Fire TV, a streaming media adapter. It’s the go-to site for online
shoppers and merchants a like, a modern necessity that independent sellers love to hate. Prime,
Amazon’s signature $99-a-year membership program, has an estimated 85 million subscribers in the
US. Also, what is very important to mention is the secret to Amazon’s massive success in e-commerce
is its endlessly complex logistics empire. Amazon promises two-day free shipping for all Prime
customers and free two-hour “Prime Now” delivery in certain cities on more than 25,000 qualified
items. It takes more than UPS and FedEx to make that happen.

To be a market leader Amazon combine 3 strategies:

Low prices: company strives to stand out in the marketplace offered considerably lower price for
products of the same quality as the competition offers.

Wide differentiation : Amazon offers new value to its customers through superior positioning, quality
assurance, efficient services and myself “user-friendly “comfort interface.

Focus: combining 2 strategies before mentioned Amazon develop own strategy.

SWOT analysis
STRENGHT
 Brand name : Amazon has a strong position and successful brand image in the market.
 Online shop – Amazon is the #1 selling e-tailer in the world
 Low prices – that makes him very competitive in the market
 Best supply chain in the world
  Online interface is very user – friendly that gives a lot of people opportunity to use online
shop
 Large number of acquisitions – The successful acquisitions of Whole Foods, Zappos.com,
woot.com, Junglee.com, IMBD.com, and many others have produced significant revenues
and profits for Amazon.
 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.

WEAKNESES
 I think they do not have focus, they do not have core product that will give them stability
when economy crush down
 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.
 Economy crises, global instability – we are now in period when global economy reach the
top, so we can predict that everything will go down
 Very high costs for marketing, advertisement, servicing systems

OPPORTUNITIES
 Global Expansion: Expansion mainly in Asian & developing economies will help Amazon
because those are the markets with low competition in E-commerce industries & are not
saturated like developed economies.
 Online shopping has positive growth trend in the world
 Internet is coming every home in the world, so that will help Amazon to have new customers
 Another opportunity, which Amazon can capitalize on, relates to it rolling out more products
under its own brand instead of being a forwarding site for third party products. In other
words, it can increase the number of products under its own brand instead of merely selling
and stocking products made by its partners.
 More acquisitions of e-commerce companies can increase the company’s market share and
reduce the competition level.

THERATS
 New economy crises
 Cybercrime – The possibility of a hacker attack and stealing an information about private
account of customers
 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 Styria.
 Imitation is easy as many new entrants are coming up in the market usually with the same
business model of Amazon.