Strategic Management Insight 1

Strategic Management Insight, Written Assignment

Aaron Eaton

University of the People, BUS 5116: Human Resource Management

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Strategic Management Insight, Written Assignment

Introduction

The company I choose to assess through the SWOT analysis is Amazon. I use them on a

routine bases and thus thought they would be an interesting company to learn more about.

Jurevicius states, “This Amazon SWOT analysis reveals how the largest online retailer used its

competitive advantages to become the dominant player in the retail industry. It identifies all the

key strengths, weaknesses, opportunities and threats that affect the company the most” (2020).

Jurevicius also shares some useful synopsis information about Amazon too. Amazon’s CEO is

Jeff Bezos who founded the company in 1994. They currently provide a wide range of online

delivery services including retail, electronics, food sources, and more. They also have their own

television streaming service. Their main center of operations is located in Seattle Washington,

US. As of 2019, they generated revenue of over $280 billion, with a profit of over $11 billion.

Their main competitors include, but are not limited to Apple, Google, Microsoft, Disney, Netflix,

and Walmart. Amazon’s wide range of competition is due to their expansive hand which is

involved in many different types of market arenas. In addition to note, as of 2020, they have

almost reached a total of 800,000 employees (Jurevicius, 2020). Hopefully this introduction has

been a useful guide for my readers to gain an adequate perspective of this company’s currently

very involved existence. Below are the assignment’s prompts and my responses.

What are the main changes that have occurred in your selected company from 2013 up to

today? (Explain at least 3 changes and refer to the information source used)

What has stood out to me the most regarding Amazon’s changes include their company

acquisition history which has allowed them to become heavy controllers and contributors to
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many market arenas. One such area is Whole Food which is a high end grocery store. Amazon

bought this supermarket for $13.7 billion (O’Kane, 2017). Yurieff notes the added benefits for

the Amazon customer include that, “[Amazon] Prime members in select cities can get free two-

hour delivery from Whole Foods” (2018). As most know, they started out with only selling

books but now sell a plethora of items as shared in the introductory paragraph. Bezo’s vision for

Amazon is to become a one shop entity experience for customers to purchase any item. This

seems to have become a reality. This vision also is what drives Amazon to make such

acquisitions. It has allowed them to grow and consequently change how they influence potential

customers (Moynihan & Payo, 2019).

Another interesting change to note is that Amazon raised their minimum change in 2018

to $15 an hour. They seemed to be a head of the curve on this change within the US. Other major

companies seem to be following suit, possibly due to Amazon spring boarding the change.

(Salinas, 2018). Due to Amazon’s growth, and probably due to raising their minimum wage,

their employee base has notably grown too. This is another noteworthy change. 2013 shows they

had around 117,000 employees (McCracken, 2019) and they are now close to employee 800,000

people (Jurevicius, 2020). This shows they have almost grown 700% in their employee hiring

since 2013.

How have the strengths of the company evolved in this period? (Explain at least one change

and refer to the information source used)

“According to the Amazon’s report, the online store’s success lies in its low cost

structure, the largest merchandise selection and a huge number of third party sellers” (Jurevicius,

2020). The areas of success are where their core strengths reside. Amazon’s business strategy has
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always existed with using these areas of success. However, it is still important to note though

that they still have evolved in these areas and become an even more successful company. As

already mentioned, their company acquisitions allow them to become a one stop shopping

market for their customers which provides much convenience. Their use of a streamlined, easy-

to-use, online market place attracts customers as well. Yet, it is not only attractive to its

customers, but its third party sellers too. Third party seller’s benefit from the customer, easy-to-

use experience as it helps them easily gain a customer base (Jurevicius, 2020).

What do you consider to be the weaknesses of the company during this period? (Explain at

least one change and refer to the information source used)

Two areas of weakness for Amazon that stick out to me include them having an easily

mimicked business strategy and them not having actual buildings to purchase in, but only from

(Greenspan, 2019). Greenspan elaborates on their online model stating, “Other companies can

establish e-commerce websites that sell just about anything. In the SWOT analysis framework,

this internal factor is a weakness that creates opportunities for other firms to impose greater

competition against the e-commerce giant” (2019). In fact, I would say that from my experience,

many major companies are competing well for the customers’ online attention now more than

ever. Inci provides some data which I think supports my experience saying, “The ecommerce

industry is growing at an exponential rate. In fact, retail ecommerce sales worldwide are

expected to reach $4.8 trillion by 2021” (2020). Amazon’s other weakness as I mentioned

includes them not have physical stores. To be clear, Amazon does have fulfillment centers where

they store their abundance of items, however, these are not stores to go in to make in person

purchases. These are simply warehouses where they ship online orders from. While I imagine
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many people are getting used to online shopping due to the increase of technology and the

current presence of COVID, I personally think there seems to be an enjoyable element of

shopping in person that is missed through the online experience.

How have the opportunities of the company evolved in this period? (Explain at least one

change and refer to the information source used)

While I noted that not having a physical location for Amazon could be considered one of

their weakness, it could also be considered an opportunity for them as well. In their acquisition

strategy, I mentioned earlier how they purchased Whole Foods which is a supermarket with

actual, physical locations. Such acquisitions present opportunities for them to use preexisting

store locations to start a possible in person, purchasing experience for their customers

(Greenspan, 2019). Now, an area of opportunity that they have already experienced includes

when they raised the minimum wage to $15 an hour in 2018 (Salinas, 2018). This is important to

note as Amazon has been known to have a rough reputation by their employees. A few ills they

mention include working long, difficult hours, under harsh, unsafe conditions (Yohn, 2020).

Hopefully by having raised their minimum wage, they are signaling that they care about their

employees and will seek ways to fix their ongoing reputation problems.

What do you consider to be the threats to the company during this period? (Explain at

least one change and refer to the information source used)

Many threats loom over Amazon in my opinion. One is their reputation and employee

satisfaction. If Amazon doesn’t fix these ongoing, public advertised harsh conditions their

employees endure, then the competition could play on that. If employees are lured in by other
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companies, then Amazon could face a thread to their productivity. Concerning competition, I

mentioned already that online shopping continues to rise as well with companies providing

online shopping experiences. I won’t elaborate on this due to the information I have already

provided above. The last threat Amazon will face is cybercrime (Greenspan, 2020). This won’t

be unique to just them though, but to all companies providing ecommerce. Fouse shares that due

to this year’s increase of online experiences due to COVID, cybercrime greatly increased. “Not

long after the outbreak… the FBI’s Internet Crime Complaint Center began receiving 3,000 to

4,000 daily cybersecurity complaints — a more than threefold increase from the 1,000 daily

complaints it was receiving prior to the pandemic” (Fouse, 2020). Such a threat will continue to

force companies to greatly invest in cyber protection to better protect their customers’ personal

and financial privacy.

Conclusion

As I end this assignment, I realize that Amazon has experience significant growth from

2013 to 2020. I imagine it will continue to progress too. However, while Amazon is a

multifaceted, useful, and growing company, it nonetheless still has its own set of challenges it

must face. No business is perfect and competition exists everywhere. Thus Amazon must careful

set out a feasible and accurate vision for their future, especially as the state of affairs has changed

life so much due to COVID. We have learned thus that SWOTs are useful instruments to apply

towards a business to better learn from them and make evaluated corrections where needed.
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References

Fouse, D. (2020, June 29). Cybercrime Is On The Rise: How Communications Can Help State

And City Governments. Forbes. Retrieved November 18, 2020 from

https://www.forbes.com/sites/forbesagencycouncil/2020/06/29/cybercrime-is-on-the-

risehow-communications-can-help-state-and-city-governments/?sh=3dae4740501e

Greenspan, R. (2019, June 22) Amazon.com Inc. SWOT Analysis & Recommendations. Panmore

Institute. Retrieved November 18, 2020 from http://panmore.com/amazon-com-inc-swot-

analysis-recommendations

Inci, D. (2020). Competing With Amazon: How Amazon’s Top Ecommerce Competitors Survive

and Thrive. BIGCOMMERCE. Retrieved November 18, 2020 from

https://www.bigcommerce.com/blog/amazon-competitors/#top-ecommerce-competitors-

for-amazon

Jurevicius, O. (2020, March 16). SWOT analysis of Amazon (5 Key Strengths in 2020).

Strategic Managed Insight. Retrieved November 18, 2020 from

https://strategicmanagementinsight.com/swot-analyses/amazon-swot-analysis.html

McCracken, H. (2019, April 11). Amazon’s wild 24-year ride 11 employees to 600,000-plus.

FAST COMPANY. Retrieved November 18, 2020 from

https://www.fastcompany.com/90331689/amazons-wild-24-year-ride-from-11-

employees-to-600000-plus

Moynihan, Q & Payo, A (2019, June 30). These are the acquisitions that have made Amazon the

giant it is today. Business Insider. Retrieved November 18, 2020 from

https://www.businessinsider.com/acquisitions-that-made-amazon-the-giant-it-is-today-

2019-6
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O’Kane, S. (2017, June 16). Amazon is buying Whole Foods for $13.7 billon. The Verge.

Retrieved November 18, 2020 from

https://www.theverge.com/2017/6/16/15816174/amazon-whole-foods-acquisition-

supermarket-stores

Salinas, S. (2018, October 2). Amazon raises minimum wage to $15 for all US employees.

CNBC. Retrieved November 18, 2020 from https://www.cnbc.com/2018/10/02/amazon-

raises-minimum-wage-to-15-for-all-us-employees.html

Yohn, D. (2020, June 2). Amazon Faces A Crucible Moment With Employees. Forbes. Retrieved

November 18, 2020 from https://www.forbes.com/sites/deniselyohn/2020/06/02/amazon-

faces-a-crucible-moment-with-employees/?sh=e24581838228

Yurieff, K. (2018, April 28). Everything Amazon has added to Prime over the years. CNN

BUSINESS. Retrieved November 18, 2020 from

https://money.cnn.com/2018/04/28/technology/amazon-prime-timeline/index.html