Sharjeel Ahmed Ullah

20191-25687

Amazon - 2021
Q1/- What Business is Amazon in? Is it spreading itself too thin or is it well positioned for the
future?

Amazon is the world’s biggest online retailer, also a manufacturer of electronic book readers and Web
services provider named Amazon Web Services (AWS) which is the iconic example of electronic
commerce. Amazon also considered as the world's most valuable brand.
Amazon is a vast Internet-based enterprise that sells books, housewares, electronics, movies, music,
toys, and many other goods almost everything, either directly or as the middleman between other
retailers and Amazon millions of customers. Amazon’s Web services business includes computing
resources and renting data storage, so-called “cloud computing” over the Internet.
Amazon comes into the top five big companies in the U.S. information technology industry, along
with Facebook, Microsoft, Apple and Google.

Amazon’s diversification and expansion have played significant roles in the rise of the company, which
clearly shows that Amazon is not spreading itself too thin. Although, some of its business ventures are
not positioned in a way to succeed in the future, but despite of that the key to Amazon’s future success
is pursuing business ventures whose existence or value is unlikely to become antiquated in the near
future. In the world of digital marketing, Amazon created its own marketplace and gave opportunity to
third-party marketers to start or run business on Amazon platform and sell products. This strategy by
Amazon was considered as tactful move because in this way Amazon turned competitors into a means
to gain revenue for the company. Amazon positioned itself in order to maintain a significant and
profitable portion of the market by integrating competition into its business model through the launch
of its advertising network. In future, this will likely remain successful as the profitability and need of
advertising will persist as long as there is a market to facilitate the exchange of services and goods
between sellers and buyers. Cloud computing is a fastest growing field in the world for technology
perspective so Amazon Web Service is very promising for future success. Kindle was one of the
successful products of Amazon which comes under part of technology.

Because of all these, I can confidently say that Amazon is well-positioned for the future. As Amazon has
diversified itself so vastly over the time of its existence and still working hard to try something new for
future.

Q2/- Who are Amazon's competitors? and what is Amazons competitive advantage?

If we talk about retail business, Amazon’s competitors are Costco, Target, Walmart, Ebay and some
other big online retailers. All of these retailers sell almost similar items on a competitive price. But if we
talk about technology, Amazon’s competitors are Microsoft, Google and Apple.

In my point of view, Amazon’s have many competitive advantages. Here I’ll discuss few of them;

1. Amazon is a single-window shop or we can say that it’s a one-stop shop where people can buy
anything like furniture, food items, movies, music, books etc. Its like ‘Think & Buy’. At the same
time, Amazon competitors offering similar products through online but not providing all the
 services that Amazon doing. Some retailers are specialized in clothing, some are in food and
some are in appliances but many of them not offering services along with products. The best
part of Amazon is that it has adapted to the needs of customers and at the same time it has
provided a place where anyone can purchase anything including home services from anywhere
in the world.

2. As everyone knows Amazon is a web-based (online) store only, which means anyone can easily
access Amazon from all over the world. Because of this, Amazon able to save labor cost,
maintenance cost and other utility expenses of physical store. This is also considered as
competitive advantage. As Amazon is growing digitally, so it allows them to expand business
more and broader as compared to its competitors. Amazon is also offering entertainment
industry with streaming of TV shows and movies which I think Amazon’s biggest competitive
advantage right now because this industry is more demanding than any other in the world.

Q3/- What should traditional retailers like Best Buy do to compete with Amazon?

During the research, it has been observed that customers go to stores like Best Buy, search out
products, get information from store about product and start comparing prices with Amazon. Because of
this Best Buy and other traditional retailers starts losing customers. All this happened because Amazon
has the same item at a cheaper price as compared to traditional retailers. Retailers should improve and
think about competitiveness against Amazon otherwise they will be no more in future. Traditional
retailers should improve customer experience that Amazon cannot provide. All this can be done by
diversification of physical stores and enhancing humanity. Retailers should have to focus on customer
satisfaction by enhancing service quality and service innovation. Traditional retailers should also try to
create and maintain good personal relationship with suppliers to hold competitive advantage over
competitors.

Furthermore, retailers can also convince the suppliers to make and design products that can fit only for
offline market, so that customers cannot compare prices of products available at Amazon. Along with all
these, retailers should arrange a workshop where real live tutorials can be given to customers of home
installation products. Retailers should give two-hour window to customers for shipping of products.
Also, a free of cost service of product installation like LED, Air-Conditioner etc. These strategies will be
considered as value added services and customers will definitely love this. All these will provide
competitive advantage to traditional retailers over Amazon.