9.

0 Markets and Critical Success Factors (CSF)

Market Prediction

Industry Market Prediction

- Retailer may invest in Augmented Reality for better shopping experience in a

convenience way. For instance, it allowing customer to try multiple dress via virtual
reality instead of change by own in fashion house.
- Further investment in Omnichannel for develop a convenience shopping experience
through the integration between mobile, desktop and physical store. For instance,
customer place the order from mobile and visit the closest store for pick-up which
saved shipping cost.
- Unique shopping experience able to being competitive for retailer. For instance,
Amazon Go is the only physical store without cashier counter but payment made via
mobile.
- Data capturing will be widely used for analysis customer personalize for predict the
future demand via purchasing pattern. It also benefits in inventory stock control for to
minimise the order of low demand product.

SBU prediction

- Developing country will be the next potential market to be penetrate due to increase
of disposable income, growth of technology and changes of lifestyle. For instance,
India has predicted the second biggest online market in the future.
- Generally, online shopping has accounted for 42% transaction made via mobile which
can forecast that future transaction will be taking over via mobile instead of desktop.
- Product diversification can become more competitive advantage such as division of
hotel booking, food and etc.
- Online fashion industry is recognised the future potential market as large amount of
the sales revenue was generated from online fashion division.
Critical Success Factor

Convenience

Due to the market is demanding rapid and quality service, convenience has become one of the
critical success factor for online industry. A quality service is able to allowing customer
become loyalty. For instance, Amazon has distribution network and Amazon Prime Air for
shipping operation being more effectively which fulfilled the demand from the market.

Strong Branding

Branding is one of the factor for online industry being successful, as the firm’s branding is
strong, it creates an awareness for public by knowing it’s a reliable platform to be use. For
Amazon, it’s has a strong branding internationally which causes of it critically invested in
marketing advertising.

Product Mix and Assortment

Product mix has become part of the success factor for online industry. Public is pursuing
more convenience and optional to get what they want in a single platform that could be rely
on, if an online firm manage to offer more different types of product or brands, it’s definitely
value added for being success. For instance, Amazon managed to being diversified as in
selling clothing, technology, books and others which fulfilling the market’s demand.
Strategic Position

Amazon is at differentiation position using synergy strategy. Amazon has heavily investment
on FBA globally which value added on competitive advantage in terms of convenience, rapid
and excellent after-sales services. Due to strong distribution network and services, it
increased the numbers users of Amazon Prime selling their product in Amazon’s platform
which estimated around 80 million Prime users in worldwide.

Instead of investing on FBA, Amazon is also diversified the product range such as AWS,
Amazon Fresh and Amazon home service which has turned in to high profit division for
Amazon causes of an improve on customer experience. Through this strategic, it’s benefiting
Amazon for generating revenue as since Amazon is having a high branding value, it
enhanced these division for creating awareness and generate income from multiple sources.

For market penetration perspective, Amazon has started to investing in Asia Pacific market
especially in China and India. There is no doubt that China and India are recognised huge
potential market in the future which became the motive of Amazon investing it, yet, due to
the strict of government policy and aggressive competitor arise, it’s difficult and costly to be
penetrate the market, especially in China. In India, after penetrate the market via joint venture
with Cloudtail and altering payment method (COD) and apps, it has resulted 40% sales but
due to local government arise new policy for restricted non-single vendor can earn more than
25% for foreign firm, it became challenging for Amazon for generate further market share
but it’s still worth for further invest by fulfilling the government requirement.

The overall of current strategic position is performing well as in branding and market share
but due to heavily investment on FBA and diversified, it’s outcoming a high operating cost
issues which being not that competitive.