Situation analysis Amazon

 Brand Image and Recognition

Everyone knows about Amazon. Most people have also shopped there. In other
words, it has a positive brand image and high recognition.

 Cost Leadership

Amazon is an e-commerce site and does not have a major physical presence and
the costs associated with it. Through this, as well as many strategic partnerships
and well-implemented strategies, Amazon maintains its image in the market as a
low-cost vendor.

 Innovation and Uniqueness

Every day, we see new kinds of products and services being added to the Amazon
platform (many times through third-party sellers). we also see new trends with a
focus on user-friendly functionality and a great shopping experience that sets it
apart from competitors – this is a great example of Amazon’s strategic
differentiation.

 Customers’ First Choice

Amazon’s customers are its priority – that is evident from Amazon’s mission
statement, which states the company’s goal to be the most customer-centric
business in the world. Keeping in line with this mission, the company offers low
costs, great deals, and a phenomenal shopping experience to keep them satisfied.
This makes it the go-to for millions of people.

 Partnerships

Whether it is a strategic alliance with Evi Technologies or the acquisition of Whole

Foods among other things, the partnerships Amazon forms result in a massive
increase in profits for the company.

 Distribution System

Consumers want a smooth shopping experience and quick delivery – a process that
does not create any unnecessary hassle for them. And Amazon delivers
immaculately. With the use of top-notch logistics and distribution methods at play,
it dominates the market when it comes to customer satisfaction.

 Expansion
 Amazon taps into new markets whenever it sees the opportunity to do something
big. Its unmatched brand recognition at an international level paired with its
dedication to providing top-notch services makes it a success anywhere it goes.

 Lack of Substantial Physical Presence

This point proves that a single factor can act as both an advantage and a hurdle.
While the online-for-the-most-part approach helps the company save a large
amount in costs, it prevents Amazon from tapping into markets where e-commerce
is still an emerging trend.

 Free Shipping

Amazon usually offers free shipping to its customers (on eligible items) when a
consumer places an order over $25. This has a role to play in its popularity because
no one likes to pay shipping. However, it is a costly approach and can affect the
company’s margins by a great deal. While it seems to be working for now, the
strategy may require some consideration in the future.

 Competition

Retail businesses are popping up online every other day. However small to begin
with, they are Amazon’s competitors. What’s more, is that many of them have
imitated Amazon’s business model, which takes away one of its major competitive
advantages. According to the Amazon vision statement, the company wishes to
remain on top of the list of most customer-centric companies in the world. This
could become more and more difficult as other companies start imitating Amazon
and catching up.

 Losses

While Amazon excels at its core business operation, it has faced trouble in other
areas. One example of this is the Fire Phone disaster. The phone, developed by
Amazon, did not do well, and resulted in massive losses for the company.

 Loss of Competitive Advantage

Amazon started out as an online bookstore. Since then, it has turned into a full-
fledged online retail marketplace that aims to sell everything. That has worked out
in its favour, but the company still lost its focus and competitive edge in that
industry.

 Creation of Own Product Line

One of the main functions of Amazon is to serve as an online vendor for third
parties to sell their products. Something that would be more beneficial to the
 company is if it started creating and selling its own products more. This must be
done in a smart, strategic way, however, to prevent it from becoming another Fire
Phone fiasco.

 Expansion of Offerings

Having said what, we covered in the point above, there is always room for
expanding the platform and adding all kinds of products from more third-party
sellers to its already massive list of offerings. The focus, here, can be on products
that are currently not found in abundance on the website.

 Cybercrime

Cybercrime and data theft are modern-day criminal activities that put internet users
at risk, especially those individuals who shop online. There is an increased
awareness among the public about the perils of sharing personal and bank account
details over the web today. This has forced people to avoid shopping online when
they can to some extent.

 Policy Constraints

Because of conflicts between the US and many countries, Amazon cannot look at
them as potential future markets. This gives a competitor from another region a
great advantage as they can tap into markets Amazon does not have access to.

 Unhappy Competitors

A major strength of Amazon, as you will recall, is cost leadership – the company
strives to provide its consumers with the best products at the lowest prices. This,
understandably, infuriates its competitors and Amazon often finds itself in the
middle of legal battles.