STRATEGIC

MANAGEMENT
2022 - 2025
o Ahmed Hassan Ashqar
o Gehad Nasr El-Dardery
o Helmy Sayed Helmy
o Mireille Kamel Farag
o Omar Ahmed Abdel Gawad

The Power of 5 in 1 Goal!

Presented to Dr. Ossama Mussallam

Table of Contents
INTRODUCTION ............................................................................................................................... 3
COMPANY OVERVIEW ..................................................................................................................... 4
PRODUCTS & SERVICES................................................................................................................ 4
VISION, MISSION, & CORE VALUES.................................................................................................. 5
Vision ........................................................................................................................................... 5
Mission ........................................................................................................................................ 5
Core Values .................................................................................................................................. 5
SITUATIONAL ANALYSIS ................................................................................................................... 5
Stage ONE: The Input Stage......................................................................................................... 5
SWOT Analysis ......................................................................................................................... 6
PESTEL.................................................................................................................................... 10
IFE: Internal Factors Evaluation ............................................................................................. 15
EFE: External Factors Evaluation ........................................................................................... 16
Five Forces of Michel Porter .................................................................................................. 17
Stage TWO: The Matching Stage ............................................................................................... 20
TOWS ..................................................................................................................................... 20
IE Matrix ................................................................................................................................ 21
Space Matrix .......................................................................................................................... 22
BCG ........................................................................................................................................ 24
CPM ....................................................................................................................................... 28
Grand Strategies .................................................................................................................... 29
Stage THREE: The decision Stage............................................................................................... 30
GOALS .................................................................................................................................... 30
QSPM ..................................................................................................................................... 30
SELECTED STRATEGIES ................................................................................................................... 33
SMART OBJECIVES ......................................................................................................................... 33
Conclusion ..................................................................................................................................... 34
References ..................................................................................................................................... 35
INTRODUCTION
Amazon began as an online bookstore offering textbooks for colleges in 1994. With practically
every commodity and service available, Amazon has developed into one of the most varied online
merchants. Amazon has modified its mission and vision over the past 25 years to take into account
changes.

Amazon's original mission was to "be Earth's most customer-centric corporation," where
customers could search for and find everything they wanted to buy online while also attempting
to offer the cheapest pricing. The global careers page of Amazon). Although Amazon's mission has
altered, they remain dedicated to being the world's most customer-focused company. By
providing the widest range of products, the most affordable rates, and speedy shipping, Amazon
succeeds in its mission.

Here we are today, after 28 years approaching achieving the last vision, it’s the right time to set a
new vision now, by analyzing our current situation using several data collection tools, such as
SWOT, IFE, EFE, PESTEL, and Five Forces of Michel Porter.

Then, reviewing all these data collected through analyzing tools like TOWS, IE Matrix, Space
Matrix, BCG, CPM, and Grand Strategies.

After that, we will reach the decision-making step where we decide on our goals, strategies, and
smart objectives after using the QSPM to evaluate our strategic alternatives.

By the end of this report, we are working to achieve the next Amazonian Dream to conquer the
rest of the world.

*****
COMPANY OVERVIEW
Amazon.com is a global technology company that specializes in e-commerce, digital streaming,
and artificial intelligence. In 1994, Jeff Bezos founded commerce, cloud. It began as an online
bookstore but has since evolved into a multiservice/multiproduct ecommerce platform. Amazon
is well-known for offering millions of products at the lowest possible prices. The organization is
currently working to be an innovative force in order to expand into many untapped markets.

The company's guiding principles are strong leadership concepts. This entails learning to be
interested by constantly making self-sacrificing efforts to better oneself and those around them,
as well as becoming owners of the short-term for long-term results. Amazon's stock has increased
by more than 70% since the market bottom on March 23rd, 2020, as of July 13th, 2020. Amazon
accounts for 160.4 billion of the top five internet companies' projected 3.5 trillion in value.

PRODUCTS & SERVICES

Amazon currently has launched 80 different private label brands of products & services that they
provide to cover every and each need as stated below:

o Amazon.com o Amazon Go
o Amazon Marketplace o Amazon Music Unlimited
o Amazon Pantry o Amazon Tickets
o Amazon Fresh o Amazon Web Services
o Amazon Payments o Amazon Prime
o Amazon Games o Amazon Music
o Amazon Art o Amazon Fire Tv
o Amazon Video o Echo and Alexa
o Amazon Basics o Amazon Kindle Fire
o Amazon Elements o Audible
o Amazon Prime Air
VISION, MISSION, & CORE VALUES
Vision
To be the number one choice for all consumers world-wide to fulfill
any of their needs.

Mission
We strive to offer our customers the lowest possible prices, the
best available selection, and the utmost convenience.

Core Values

Leading to Innovation
Lead with Learning & Always
Customer and
Ownership Curiosity Developing
Satisfaction Simplicity

SITUATIONAL ANALYSIS
Stage ONE: The Input Stage
Input Stage

SWOT IFE EFE PESTEL Five Forces

SWOT Analysis
1. Strengths
❖ Strong brand name
Amazon has a solid market position and a strong brand image as a worldwide e-
commerce giant.

❖ Brand valuation
According to statista’s Most valuable brands worldwide in 2022, Amazon is ranked at
#2 position (Apple at #1 and Google at #3), with a brand value of $350 Billion

❖ Market Leader
With over $1.18 Trillion market capitalization and above $469 billion annual
revenues, Amazon is truly a market leader in online retail industry.

❖ Involved into separate key business

Amazon Web Services (AWS), Echo & Alexa, Amazon Marketplace, Amazon Fresh,
Amazon Prime, and more…

❖ Cost Leadership
By selling everything online, Amazon avoids the overhead of operating actual retail
shops. With economies of scale, Amazon efficiently controls its costs and lowers its
inventory replenishment time, also it has a strong value chain system which helps in
maintaining a low-cost structure.

❖ Largest Merchandise Selection

Amazon offers a diverse product offering, which entices online shoppers to make the
majority of their purchases from it rather than from other online merchants. As of
2021, 75 million products have been sold on Amazon's Amazon.com Marketplace.

❖ Large number of third-party sellers

Due to the high traffic volume on Amazon’s sites, a large number of third-party sellers
have joined the platform of Amazon to sell their own goods. In 2021, 1,029,528 new
sellers joined Amazon globally. Amazon has 9.7 million sellers globally, with 1.9
million of them actively selling on the platform.

❖ Superior SCM and logistics systems.

Amazon uses highly efficient logistics and distribution systems. It has fixed charges
for various delivery times. As a result, it provides consumers with dependable, secure,
and timely delivery of commodities and supplies.

❖ Go Global and Act Local strategy

This strategy has benefitted Amazon the most. Amazon develops alliances with local
supply chain firms to help it compete with domestic e-commerce rivals. It recognizes
local demands and tailors its services to the country's culture.
 ❖ Differentiation and Innovation
Amazon often adds new and innovative products and services to its product range
and service offerings.

❖ Large number of acquisitions

According to Forex.com Amazon has made many acquisitions which have produced
significant revenues and profits for them (Whole Foods, Zappos.com,
woot.com, Junglee.com, IMBD.com, Zoox, Twitch, Souq.com, Kiva Systems).

❖ Customer oriented
Amazon serves a huge number of consumers' daily necessities at low costs.

❖ Self-Driving Technology
Amazon just paid $1 billion for Zoox Inc; a self-driving firm located in California. It may
now deploy autonomous technology to capitalize on the increased demand for ride-
hailing services or to strengthen its distribution network.

❖ Large customers data

Amazon has large numbers of data that can analyze it and use for predicting the needs
of the customer and make it available throw its website

2. Weakness
❖ Losing Margins in Few Areas
In few areas such as India, Amazon has suffered losses. It’s free shipping to customers
can be one of the factors that expose the risks of margin erosion in some markets.

❖ Tax Avoidance Controversy

Amazon has received negative publicity due to tax evasion in Japan, the United
Kingdom, and the United States. President Trump chastised Amazon over social
media taxes.

❖ Product Flops and Failures

Its Fire Phone’s launch in the US was a big failure while its Kindle fire device didn’t
even grow well due to its technical issues like frozen screen or issues with
downloading content, etc.

❖ Easily adopted business model.

Online retail firms have become quite common in this digital world. So, competitor
corporations may easily replicate Amazon's business model. A few firms are even
giving Amazon a run for their money. These include, but not limited to, Barnes &
Noble, eBay, Netflix, Hulu, and Oyster.

❖ Workplace culture
Amazon has a culture of fierce competition, harsh criticism, and callous behavior.
Employees believe there is no recognition, that work-life balance is discouraged, and
that there are no perks.
 ❖ Limited physical stores
Amazon owns only a few physical stores. This can make enticing shoppers to purchase
things that are not available in online retailers challenging. According to
supermarketnews.com, Amazon presently operates 515 Whole Foods Markets, 29
Amazon Fresh grocery shops, and 26 Amazon Go convenience stores in the United
States.

❖ High dependence on distributors

Relying on distributors exposes Amazon to various risks. It may be anticipated to
renegotiate a contract with one of its major distributors (German Logistic Group-
Deutsche Post DHL).

❖ Employees Strike
Strikes can grind Amazon’s operations to a halt. With a claim of unsafe working
conditions, Amazon employees in Germany went on strike, which halted operations
in six distribution hubs.

3. Opportunities
❖ Penetrate or expand its operations in developing markets (MENA).
❖ Sudden need of products due to Pandemic
There is a high demand appeared on many products around the world due to
pandemic, amazon can exploit this demand by increase its sells

❖ More acquisitions
Amazon can use its financial capability to do more acquisitions of e-commerce
companies to increase the company’s market share and reduce the competition level.

❖ Expanding physical stores

Amazon can boost its competitiveness versus big-box shops while also engaging
people with the brand

❖ New partnerships
Can do more partnerships with new companies to offer new products and services
for its customers

❖ Expanding its production of in-house brands

Can employ backward integration to distinguish its offers and increase profit margins
by expanding production of in-house brands such as Amazon essentials.
 ❖ Developing technologies
❖ Electric vehicles Sustainable business (Green)
❖ Grocery Market

4. Threats
❖ Government regulations
Policy changes are and will continue to be a threat to Amazon's domestic and
international growth. Such, Local retailers are favored by government policies more
than the e-commerce business in some countries and during the first few months of
the pandemic, the Indian government prohibited non-essential products on Amazon.
The ban cost the company $398 million.

❖ Cybercrime
Increased cybercrime might have an impact on the company's network security
system.

❖ Oil price increases

For the first time in history, gasoline prices in the United States have surpassed $5 a
gallon. For incoming and outbound logistics, Amazon's supply chain is significantly
reliant on gasoline costs. When compared to pre-pandemic prices, Amazon's shipping
costs in international containers have more than quadrupled.

❖ Aggressive competition globally

Amazon may face difficulties in the future due to aggressive competition with large
retail corporations such as Alibaba, Walmart and eBay, also they compete now with
other companies in different industries such as:

o In Video Streaming Service: Apple TV+, Netflix, Disney+

o In Logistics: FedEx, UPS
o In Self Driving Technology: Tesla, Uber, Ford

❖ Aggressive competition locally

Amazon may face difficulties in the future due to aggressive competition with local
retailers and local e-commerce business in many different countries.

❖ Economic recession
The economic recession around the world may affect the sales of amazon due to the
decrease of purchasing power in many countries

❖ Fake Products
The increase in fake products threatens Amazon's profits

❖ Fake reviews
Customers rely heavily on reviews to make purchases, so product reviews are a critical
indicator of quality and authenticity. Amazon has erased almost 20,000 phony 5-star
ratings from its top UK reviewers, according to a Financial Times study.
 ❖ Ukrainian-Russian War
❖ Political issues between USA and other countries

PESTEL
1. Political
❖ Cyber-Security Regulations:
Opportunity:

We can anticipate high opportunity in increasing cyber security because the business
will concentrate on maintaining a secure network, which will encourage customers to
share personal information such as their address and credit card number.

❖ Tax exemption:
Opportunity:
Tax exemptions for starting a business to increase employment opportunities is an
opportunity because the company will have to pay less taxes, similar to how in the
USA e-commerce websites are exempt from paying taxes if they don't have a physical
presence.

Threat:
There is also a chance that more businesses will try to expand their operations in
states.

❖ Political disruption:
Threat:
Political unrest can disrupt supply chains, resulting in a drop in sales. This is both a
threat and a vulnerability because any political unrest or civil conflict can impede
corporate operations.

❖ International Expansion:
Threat:
International expansion of the business may be hampered because internet laws do
not align with Amazon's policies, limiting their ability to do so and posing a threat to
the corporation.
2. Economic:
❖ Purchasing Power:
Threat:
As developing countries' purchasing power decreases due to the increasing inflation
rates, Amazon faces big threat to expand because these countries cannot afford to
buy globally as previously could.

❖ E-Grocery Market:
Opportunity:
There is big open market for E-grocery opportunities (USA/MENA) Similar to Walmart

Threat:
This poses a challenge to the organization because Walmart is already well-
established in the grocery goods category, which will cause Amazon's share price to
decline.

❖ Currency Fluctuations:
Threat:
Currency fluctuations can be risky because they affect how each country's economy
performs. The displayed prices, for example, are in US dollars and will differ from the
time of delivery if converted to another currency. If the price rises, Amazon loses
money because the buyer will have to pay more for the same item.

3. Sociocultural:
❖ Consumerism in Developing Countries:
Opportunity:
Increasing developing countries' habits of Consumerism is an opportunity because
these countries are eager to try new products, giving Amazon a chance to grow.

❖ Generation Z and Millennials lifestyle:

Generation Z are the largest generation ever, comprising around 20% of Australia's
population and almost 30% of the world's population. Globally there are almost 2
billion of them.

Generation Y is 75 million people strong, in 2020, Millennials made up about 21.93%

of the population in the United States alone.

Opportunity:
The growing popularity of online shopping among millennials represents both an
opportunity and a threat because they are not lazy; rather, they simply want to
complete their tasks quickly.

Threat:
It can also be preserved as a threat because they will visit more websites, prompting
price comparisons.
 ❖ High Speed Internet:
Opportunity:
High-speed internet access and evolving technology have drawn a large number of
customers, presenting opportunities for the business. This is significant for the
company because Amazon emerged at the same time that the internet was
expanding its market, helping both entities grow.

4. Technological:
❖ Technological Undesirability:
Threat:
Technological undesirability is on the rise, posing a threat to the company because it
must constantly improve its IT department, making it impossible to manage the load
on the website with outdated servers.

Opportunity:
On the other hand, it’s an opportunity because they will have a secured network for
their website, increasing customer confidence and trust.

❖ Information technology proficiency:

Opportunity:
The level of expertise in information technology is increasing making the application's
platform as user-friendly as possible is an opportunity because more clients will be
drawn to it if it is simple to understand and use.

❖ Cybercrime:
Threat:
The threat posed to Amazon by rising cybercrime stems from the possibility that client
data may be compromised if the network is not secure.

❖ Opportunity for Technology Investment:

Threat:
Regular technological investments are a threat to the company because the need for
the business to prioritize technology also suggests that customers will contribute time
to technology.

Opportunity:
It’s also an opportunity as Amazon will be able to build a network which is secure to
access.

❖ Automation:
Opportunity:
The fact that automation has enhanced corporate efficiency presents an opportunity
because forklifts and robots can help increase working productivity.
 ❖ Artificial Intelligence:
Opportunity:
Investment in AI Technologies and the increasing in it is a big opportunity for Amazon
AIR using drones to deliver products to customers' doorsteps.

5. Environmental:
❖ Low-Carbon Regulations:
Opportunity:
The recent increase in the Low-Carbon importance to the environment opens big
opportunities for Amazon to peruse in the electric vehicles industry.

The company has ordered 100,000 custom fully electric delivery vehicles from Rivian,
the largest order ever for electric delivery vehicles

Threat:
According to the graph below, although Amazon's overall carbon intensity declined
by 16 percent, its absolute carbon emissions rose by 19 percent in 2020.

❖ Energy Consumption:
Opportunity:
The digital giant Amazon has 125 solar rooftops on fulfilment and sorting facilities
across the world in addition to 62 utility-scale wind and solar projects, making it the
largest corporate consumer of renewable energy in the world.

In 2020, the e-commerce and cloud computing corporation used 65 percent

renewable energy across all of its operations.
 ❖ Water Consumption:
Opportunity:
Many of Amazon's fulfilment centers can collect and recycle water. This is
accomplished through the use of rainwater collection tanks or recharge wells;
additionally, Amazon uses direct evaporative technology to cool our data centers,
significantly reducing energy and water consumption.

❖ Waste Reduction and Recycling:

Opportunity:
Amazon offers the Packaging-Free service in a number of cities. Customers' orders
placed through this service are delivered in their original packaging, with no
additional or secondary packaging.

As of June 2021, the world's largest internet corporation by sales had reduced the
weight of outbound packing by more than 36%, and it had also eliminated more than
1 million tons of packaging since 2015.

6. Legal:
❖ The Markup Investigation
Threat:
According to the recent The Markup Investigation, Amazon frequently favors its own
brands and exclusive products in search results over better-rated rivals, and Amazon
is inconsistent in informing customers that those products are Amazon-brand goods
or exclusives.

Amazon has warned third-party merchants that the legislation could jeopardize its
ability to host third-party sellers on its platform and prohibit services that customers
value, such as Amazon Prime shipping. MarketWatch's requests for comment were
not returned.

❖ Sales Tax
Threat:
For years, third-party merchants were embroiled in a legal battle between Amazon
and state tax authorities. Amazon has recently begun to collect sales tax, which is a
significant change from just a few years ago.

Previously, many states actively pursued third-party sellers for upcoming sales and
use taxes and established "amnesty programs" in which participants were required
to participate in order to avoid having to pay back taxes.

❖ Intellectual Property
Opportunity:
Amazon recently launched a brand-new "IP Accelerator" program. Amazon requires
vendors to obtain trademark protection before being accepted into its Brand Registry
service. The program provides vendors with access to a number of critical capabilities,
such as improved brand content, advertising options, and IP enforcement.
IFE: Internal Factors Evaluation
Using the Strengths & Weakness from SWOT Analysis, Market Weights and Team Evaluation for
Rating, we created the IFE below:

CRITICAL STRENGTH WEIGHTS RATING SCORE

Strong Brand Name 0.13 4 0.52
Brand Valuation 0.10 3 0.3
Market Leader 0.10 4 0.4
Involved Into Several Key Business 0.09 4 0.36
Cost Leadership 0.08 3 0.24
Largest Merchandise Selection 0.04 4 0.16
Large Number of Third-Party Sellers 0.04 3 0.12
Differentiation And Innovation 0.03 4 0.12
Superior SCM And Logistics Systems 0.03 4 0.12
Large Number of Acquisitions 0.02 3 0.06
Customer Oriented 0.02 4 0.08
Self-Driving Technology 0.01 3 0.03
Gathering Data 0.01 3 0.03

CRITICAL WEAKNESS WEIGHTS RATING SCORE

Losing Margins in Few Areas 0.11 1 0.11
Tax Avoidance Controversy 0.07 1 0.07
Product Flops and Failures 0.05 2 0.1
Easily Adopted Business Model. 0.02 2 0.04
EMPLOYEE STRIKES 0.02 2 0.04
Workplace Conditions 0.02 1 0.02
Limited Physical Stores 0.01 2 0.02
TOTAL SCORES 1 2.94
EFE: External Factors Evaluation
Using the Opportunities & Threats from SWOT Analysis, Market Weights and Team Evaluation for
Rating, we created the EFE below:

CRITICAL OPPORTUNITIES WEIGHTS RATING SCORE

Opportunity to Penetrate Developing Markets (Mena). 0.10 4 0.4
Sudden Need of Products due to Pandemic 0.08 4 0.32
More Acquisitions 0.07 4 0.28
New Partnerships 0.06 4 0.24
Expanding Its Production of In-House Brand 0.05 3 0.15
Developing Technologies 0.05 4 0.2
Expanding Physical Stores, and Improve Competitiveness 0.03 3 0.09
Electric Vehicles Sustainable Business (Green) 0.01 3 0.03
Grocery Market 0.01 4 0.04

CRITICAL THREATS WEIGHTS RATING SCORE

Increasing Cybercrime Can Affect the Network Security 0.10 1 0.1
Economic Recession 0.09 1 0.09
Ukrainian-Russian War 0.07 2 0.14
Government Regulations 0.06 2 0.12
Increase In Oil Price 0.06 2 0.12
Aggressive Competition Globally 0.05 1 0.05
Aggressive Competition Locally 0.03 2 0.06
Fake Products 0.03 2 0.06
Political Issues Between USA and Other Countries 0.03 2 0.06
Fake Reviews 0.02 2 0.04
TOTAL SCORES 1 2.59
Five Forces of Michel Porter
Michael Porter competitive advantage and how to sustain it.

1. Rivalry Among existing competitors (High)

Due to:

1. Amazon's e-commerce industry is being threatened by giants like Walmart, Alibaba,

and e-bay, among others. Walmart is combining their physical stores with their
internet businesses to improve the shopping experience for their customers. In
addition, there are many direct and indirect rivals. The rivals could be similar large e-
commerce companies, little brick and mortar firms, or even little vending machines.
2. The streaming industry is under serious pressure from reputable rivals like Netflix,
Disney+, Hulu, and others. Amazon Prime ranks second in the US market after Netflix,
which has a market share of 30%, with a share of 25%. Regional video streaming
services like Tencent Video (Chinese) and iFlix (Malaysian) compete fiercely with
these businesses for market share.
3. Due to the high infrastructure needs and upfront costs associated with acquiring
content for the services, there are exit barriers

Due to cheap switching costs, small-scale brands and startups are gaining ground among the
existing players in the industry. Walmart, Flipkart, Alibaba, eBay, and others are fierce
competitors for Amazon. Amazon, meanwhile, benefits from scale economies and numerous
investment alternatives.

2. Threat of New Entrants (Low)

Due to:

1. Amazon operates a variety of companies. Online video streaming, e-commerce, and

cloud service providers are the ones that generate the most money, so our analysis
will mostly concentrate on those big companies. None of these companies
significantly reduce the costs associated with mass production through economies of
scale. As a result, this element does not present a sizable entry barrier.
2. Because both the streaming and AWS businesses have one-time payment schedules,
customers may incur switching expenses. However, the marketplace enterprises do
not have a high switching cost, which means that there is not a significant entry
barrier.
3. With regard to capital requirement, as the marketplace firm is an aggregator, there
are no essential funds needed to launch a modest operation. However, the cloud
computing industry requires up-front funding to build up the necessary equipment
and storage. The same is true for the streaming industry, which needs a sizable sum
of money up front to build up the necessary infrastructure and purchase movie rights
and other licenses.
 4. For the streaming industry, Amazon and its big rivals Walmart, Azure, etc., offer the
established advantage of a strong brand name. As a result, they may pose a significant
entry hurdle for any new market entrant.

Amazon is a market titan with a great reputation as a brand. Additionally, it benefits from scale
economies and big distribution and warehousing capabilities. Being a large-scale business, it
makes significant investments in marketing, logistics, customer support, and eCommerce
solutions. Therefore, it can be difficult for any company to overcome this brand image and
establish itself as a market leader. However, due to low switching costs, tiny businesses can only
capture a small segment of the market.

So Amazon Porter's five forces analysis shows that the threat of new entrants is a weak force that
will not significantly harm Amazon.

3. Potential Development of substitute products/Service

(Medium to High)
Due to:

1. Customers who want to try things before buying them can prefer offline retailers.
2. Customers might also want to purchase goods through independent brand websites that
entice them with special offers for their websites or apps.
3. It may be concluded that the threat of substitutes is strong because movies seen in
theatres and other forms of entertainment are the main substitutes in the streaming
industry. Additionally, potential customers have a variety of media options to choose
from as sources of entertainment with little to no switching expenses.
4. If we exclude the minimal transportation costs that can be incurred for purchasing from
offline retailers, there is no cost to switching to a substitute in the e-commerce industry.

These forces include a large availability of alternatives, cheap cost of substitutes, and low
switching costs. Customers can simply choose a customer without incurring any additional fees
thanks to the minimal switching prices. So, they incur no additional costs when they purchase
from Walmart or Amazon. Then, numerous low-cost alternatives are provided. In order to keep
its reputation as the industry leader, Amazon fights against these alternatives constantly. But
against these dangers, Amazon's reputation as a trusted brand works well. Additionally, its
network of distribution centers, warehouse facilities, and service quality are unmatched.

4. Bargaining power of supplier (Medium to High)

Small suppliers, moderate forward integration, and supplier scale all contribute to this force.

Due to:

1. Suppliers are in charge of the products' availability for Amazon's eCommerce

activities. Additionally, Amazon depends on the hardware and software that make up
the information systems in cloud services.
2. On the e-commerce platform, there are certain large suppliers who may have a lot of
influence on the business by preventing them from selling on their platform, such as
 Apple. But the majority of the other suppliers have virtually no negotiating power
with Amazon.
3. Due to its size and ease of switching vendors, Amazon controls the supply chain.
4. When it comes to the streaming service, there are primarily two vendors because the
streaming infrastructure is constructed on top of AWS, an affiliate of Amazon with no
purchasing power. Since there are many different production companies that
produce the content, Amazon may have to compete with them for the right to stream
it. Since Amazon produces a lot of original material, there is limited but significant
negotiating power in this situation as well.

5. Bargaining power of buyers (High)

Factors include product differentiation, switching costs, concentration and amount of
purchases.

Due to:

1. There are no switching fees if the customer decides to choose a replacement or a

rival.
2. Products lack specialty offerings and are mainly undifferentiated, which would give
customers more purchasing power.
3. There is also room for backward integration, which would include customers buying
goods directly from retailers rather than through the Amazon platform.
4. Clouding commercial the majority of AWS's business-to-business customers are large
companies, and the value of the transaction can be in the millions of dollars on a
monthly basis.

The success of Amazon depends on how well its products are received by customers. Although
switching costs for customers are very low, a significant number of replacements have appeared.
Customers can easily identify alternatives since they have access to general information about the
goods and services that other vendors provide.

❖ Suggested strategies:
➢ Cost leadership
➢ Focus
➢ Dedifferentiation
 Stage TWO: The Matching Stage

Match Stage

TOWS IE Matrix SPACE BCG CPM Grand St.

TOWS

Strengths
S1- Strong brand name
S2- Involved into separate
key business
S3- Market Leader
TOWS Analysis S4- Largest Merchandise
Selection
S5- Cost Leadership
S6- Superior SCM and
logistics systems
S7- Large customers data
Weaknesses
W1- Losing Margins
W2- Tax Avoidance Controversy
W3- Product Flops and Failures
W4- Easily adopted business
model
W5- High dependence on
distributors
W6- Limited physical stores

O1- Penetrate developing

markets - S1,S2,S3,S4,S6,O1 - W1,O1
Opportunities

O2- Pandemic effect Market development Market development

O3- More acquisitions - S2,S4,S7,O2 - W5,W6,O4
O4- Expanding physical Market penetration Forward integration
stores - S1,S2,O3 - W1,O3
O5- Expanding its Horizontal integration Horizontal integration
production of in-house - S1,S2,S4,S6,O4,O5
Vertical integration
T1- Cybercrime
T2- Economic recession -S2,S4,S6,S7,T2 - W1,W3,W4,T3,T4,T2
T3- Aggressive Market penetration Defensive Strategy
Threats

competition globally -S1,S2,T3

T4- Aggressive Intensive Strategies
competition locally -S1,S2,T4
T5- Oil price increases Horizontal integration
IE Matrix

The IFE and EFE are tools to audit the internal and external factors for SWAT analysis.

Audit starts by prioritizing top 20 factors for Strengths and Weaknesses (IFE) and top 20 factors
for Opportunities and Threats (EFE), then giving them weights that’s a given in the market.
Then rating for each of the audited factor by team judgment and producing a weighted score to
each factor.

A sum of the weighted score for each the IFE and EFE helps determines the direction.

In the study, IFE’s sum of weighted score was 2.94 while EFE’s sum of weighted score was 2.59.

Using the above sum of weighted scores for IFE and EFE, the decision was found to lie in the
middle quadrant of the IE matrix which directs toward a hold and maintain strategy which means
to focus on market penetration and market development.
Space Matrix
1. E-Commerce & Retail Industry:
FS: Financial Strength:
(+) Amazon Market Share of E-Commerce in USA is 35.6% and 14.4% over the world

(-) (+) E-Commerce Revenue for Amazon is $386,064 millions in 2021 as 2nd top after
Walmart with $523,964 millions

(-) Cash Flow has decreased in 2020 to $6,000 millions from $10,000 Millions

FS Score (1 to 6) = +5
CA: Competitive Advantage:
(+) Amazon is a Market Leader in E-Commerce Industry with millions of products in more
than 10 categories

(+) Amazon is providing average-low cost compared to their competitors

(+) Many related services that cover more needs such as Amazon Prime & Amazon Prime
AIR

(-) Many Competitors and alternatives

CA Score (-1 to -6) = -2

ES: Environmental Stability:
(-) E-Commerce Industry is open for many technological Changes

(-) High Inflation Rates all over the world affecting the Purchase Power

(+) No Barriers to Entry or exit the industry

ES Score (-1 to -6) = -3

IS: Industry Strength:
(+) No Barriers to Entry or exit the industry

(+) High Demand and low elasticity for demanded goods

IS Score (-1 to -6) = +5 FS

Aggressive
Suggested Strategies:
o Backward, Forward, Horizontal Integration
o Market Penetration
o Market Development
o Product Development
CA IS
o Diversification

ES
 2. Software & IT Industry:
FS: Financial Strength:
(-) Amazon Market Share of Consumer electronics in USA is 8.7% and 2.1% over the world

(+) Amazon Market Share of Cloud Services in USA is 25.2% and 41.5% over the world

(+) Amazon Market Share of Digital Assistant 62% over the world

(-) Cash Flow has decreased in 2020 to $6,000 millions from $10,000 Millions

FS Score (1 to 6) = +5
CA: Competitive Advantage:
(+) High Brand Loyalty in Digital Assistant (Alexa)

(+) Amazon is providing several Software & IT Products and have the needed resources
for development

(+) Amazon is considered in the IT Industry as one of the FAANG, the biggest corporates
in the world, Facebook, Amazon, Apple, Netflix, and Google

CA Score (-1 to -6) = -1

ES: Environmental Stability:
(-) IT Industry is very competitive and open for many technological Changes

(-) High Inflation Rates all over the world affecting the Purchase Power

(+) No Barriers to Entry or exit the industry

ES Score (-1 to -6) = -3

IS: Industry Strength:
(+) No Barriers to Entry or exit the industry

(+) Stable Industry with high demand and big advantages

IS Score (-1 to -6) = +6 FS

Suggested Strategies: Aggressive

o Backward, Forward, Horizontal Integration
o Market Penetration
o Market Development
o Product Development
CA IS

ES
BCG
Even if you’re an astronaut who has been in space for the longest time, you'd know Amazon or at
slightest listened around it. Amazon is an American multinational innovation company. It has an
ecommerce location, a video spilling stage (Amazon Prime), a stage for eBooks (Ignite), a virtual
partner AI innovation (Alexa), Amazon Music etc. we’re reaching to be examining the BCG Lattice
of Amazon with uncommon reference to P-M framework. But some time recently that let us get
it what BCG Framework implies. This Framework makes a difference business plan a long-term
key arrange. It moreover makes a difference them consider development openings by checking
on its portfolio of items to choose where to contribute, to suspend or create items. Its
investigations showcase development and share based on which there are four quadrants:
 1. DOG
The dogs are the products within the BCG Matrix that are not generating high sales
conjointly don't have a recognizable market share. These products in turn don't generate
revenue but use money investments that's why these are called money traps. Within the
BCG framework of Amazon, able to watch that mp3 could be a puppy item since it doesn’t
have critical advertise share and the industry is additionally growing exceptionally lazily.
Amazon's physical stores are too categorized as the dogs for the company since they are
the slightest competitive in terms of showcase share. They speak to as it were around
0.015% of market share which is nearly negligible.

2. STARS
Stars are the items that hold a high market share and are developing as promising income
generators for the company. Speculation in such items can surrender great development
and benefit point of view and a chance to gotten to be cash cows. Amazon's claim to
popularity is unquestionably its online store called Amazon.com. It created around $108
Billion in income in 2017. This ROI with the high development rate of the showcase
appears that this segment may be a Star within the BCG framework of Amazon. Amazon's
AWS and cloud section is additionally appearing development potential and the advertise
is additionally becoming appealing. But AWS is kind of swinging between stars and
address marks since of numerous unused partners within the showcase.

3. CASH COW
Cash Cows are the items that bring in nice looking income for the company. In this case
the market is exceptionally develop and it can bolster high deals and high request from
the buyers. In some cases, the prospects of development within the individual advertise
is moo since of an as of now develop showcase but the current standing of the items
maintains its ROI and cash bovine status. Amazon's e-books division could be a profitable
cash bovine for the company. Amazon has its local e book reader called arouse and it has
backed the company's ROI an extraordinary bargain. Sound books and motion pictures on
request are other increments to cash dairy animals within the BCG framework of Amazon.

4. QUESTION MARKS
The fourth quadrant within the BCG Framework is address mark products. The products falling in
this quadrant are still within the development organize, and the market's reaction to these items
is still not exceptionally well built up. These items can develop into a beneficial commerce but the
restricted showcase share implies the ROI is exceptionally moo so these items don't have the
potential of getting to be cash cows. Since, the industry in this case still appears promising
development potential, The industry is still within the development stage, hence, if the company
works on the address marks, they can end up Stars of the company. Within the Amazon BCG
network, video on request can gotten to be an address stamp since of constrained development
in this section.

In spite of the fact that the BCG matrix could be a well-known trade arranging and analysis tool,
it has some limitations that influence its potential benefits. The primary and the first limitation is
the scoop of this network. As ready to see within the BCG lattice of Amazon, we are utilizing this
apparatus for analyzing distinctive items of one company based on showcase share and
development rate. Be that as it may, it was really formulated to think about the trade units
possessed by one gather. So, the flow of generation units or production lines are exceptionally
distinctive from the items.

Secondly, BCG may be an exceptionally straightforward framework which is an alluring feature

but then, this over simplicity could be a cause of reservation since numerous other components
moreover decide the advertise dynamic and development within the market, e.g., geological
demographics, brand control, competition, etc. So, a choice based solely on the BCG lattice
incorporates a frail foundation. Also, this framework does not take the gray areas into
consideration. So, the advertise share can be either high or moo but not medium and you'll
moreover not consider numerous relative measures. So, we are able conclude that BCG is a vital
framework but cannot be utilized separately to form basic choices.

BCG framework makes a difference trade examiners and administration to evaluate the
speculation choices and the development potential of their items based on showcase share and
development forecasts. Within the BCG matrix of Amazon, able to see that Alexa begun off as a
question mark since of extreme competition from Google. In any case, video on request is still an
address stamp and we need to see in case it gets to be a star or a pooch for the company.

Amazon Music had 15% showcase share, as compared to Spotify which had 36% in 2019. Prime
Video has Netflix driving the advertise share. Both these items have moo advertise share but tall
development rate, subsequently it comes beneath the Address check category. These items can
end up ‘star’, in case they get speculation. Since both prime and music were propelled into the
advertise when their rivals were as of now display, they have for the most part been cash dairy
animals. Since Amazon was basically an Ecommerce mammoth, both these items were unused
and propelled in a modern showcase. In this way, it was a Diversification. Kindle and Alexa are
both Stars. Ignite might not create as much income as other items, but it is the advertise pioneer
beneath eBooks category. Alexa gets competition from Google Domestic but still appreciates tall
showcase share, and brings in great income. Both these items were unused but the showcase
wasn’t, thus it was an item advancement.
Amazon does not have any product that falls under the category of dog, since most of its products
have a decent growth rate.

Finding exact income numbers for Amazon Music, Video, and Fire TV was a bit troublesome. Most
of the information I was finding was expressing income for all of Amazon’s membership-based
items, and connecting the Fire TV with Amazon Video. Be that as it may, with the data I did
discover, the BCG Framework appears that these three services/products are Address Marks. It
makes sense that these are all within the Address Check category. Whereas they all create income
and have seen a positive advertise development rate, Amazon’s competitors have a better
showcase share. For illustration, Spotify has more endorsers than Amazon Music, and Netflix has
more supporters than Amazon Video. To urge out of the Address Check category, Amazon will
need to figure out perfect way">the most perfect way to compete with their competitors to pick
up more subscribers.

One of Amazon’s Stars was the Kindle. Whereas the Kindle does not show up to create as much
cash as a few of the other Amazon products/services, it has the highest market share compared
to its competitors. This gives Amazon a gigantic advantage within the world of eBooks and
audiobooks. The Kindle saw an increase within the advertise development rate, so it is likely that
the Arouse will continue to bring in unfaltering income for Amazon within a long time to come.
Another Star for Amazon is the Alexa, or Amazon Resound. As of late, Amazon Alexa has had
competition with the Google Domestic, but Amazon still encompasses a much higher showcase
share than Google. Alexa is additionally a colossal cash creator for Amazon, so it is vital that
Amazon keeps doing anything it is doing to keep this item offering.

❖ Suggested Strategies:
CPM
1. Alibaba
Alibaba Group Holding Limited, also known as Alibaba (Chinese:), is a Chinese
multinational technology corporation that specializes in e-commerce, retail, the Internet,
and technology. The company, founded on June 28, 1999, in Hangzhou, Zhejiang, provides
electronic payment services, shopping search engines, cloud computing services, and
consumer-to-consumer (C2C), business-to-consumer (B2C), and business-to-business
(B2B) sales through web portals. It oversees a diverse portfolio of businesses in a variety
of industries around the world.

AMAZON ALIBABA
Critical Factor Weight Rating Score Rating Score
Large Merchandise Selection 0.30 4 1.20 3 0.90
Price Competitiveness 0.20 4 0.80 4 0.80
Brand Name 0.20 4 0.80 3 0.60
Customer Centric 0.15 3 0.45 3 0.45
SCM and Logistics System 0.10 4 0.40 2 0.20
Financial Capability 0.05 4 0.20 2 0.10
1.00 3.85 3.05
Grand Strategies

❖ Amazon falls in the 1st quadrant with rapid market growth as well as strong
competitive position.

Suggested Strategies:

➢ Market Development
➢ Product Development
➢ Market Penetration
➢ Backward Integration
➢ Forward Integration
➢ Horizontal Integration
➢ Concentric Diversification

The Grand Strategy Matrix has a number of advantages:

➢ It’s simple to use and understand

➢ It has a comprehensive list of strategic options
➢ It can stimulate discussion and help frame decisions
➢ It can be applied to any industry or marketplace
Stage THREE: The decision Stage
GOALS
According to the results we gained from the Situational Analysis, we have decided on the below
goals:

Amazon • Expand Amazon Footprint in New Geographical

Footprint Areas

Amazon
• Increase Amazon Market Share in Existing
Market Regions to be Market Leader in theses Areas.
Share

QSPM
According to the situational Analysis we performed, we reached the direction of the below four
Strategies:
Intensive Strategies Integration Strategies Diversification Strategies Defensive Strategies
Market Penetration Product Development Market Development Horizontal Backward Forward Vertical Concentric Conglomerate Divesture Retrenshment
IE Matrix P P
Space matrix P P P P P P P
BCG
Amazon Go P P P P
AWS P P P P P P
Alexa P P P P P P
Fresh P P P P P P
Amazon.com P P P P
Grand Strategy P P P P P P P
TOWS
SO P P P P
OW P P P
ST P P
WT

❖ Market Penetration: Increase the Market Share in Middle East & Egypt
❖ Market Development: Enter New Markets in North and South Africa
❖ Product Development: Provide New Product (Electronic Cars) in Existing Market (USA)
❖ Horizontal Integration: Acquire Competitors in the Targeted Markets

With Referring to the Strengths, Weaknesses, Opportunities, and Threats from the EFE & IFE, we
created the QSPM below:
 Increase Enter New Electronic Acquiring
Market Share Markets in Commercial Competitors in
in Middle East North Africa Cars in USA Target Markets
& Egypt
Strength Weight Rating Score Rating Score Rating Score Rating Score
Strong brand 0.13 4 0.52 4 0.52 - 0 3 0.39
name
Brand valuation 0.10 3 0.39 4 0.52 4 0.52 4 0.52
Market Leader 0.10 4 0.52 - 0 - 0 3 0.39
Involved into 0.09 4 0.52 3 0.39 - 0 - 0
separate key
business
Cost Leadership 0.08 3 0.39 4 0.52 - 0 - 0
Largest 0.04 4 0.52 4 0.52 - 0 - 0
Merchandise
Selection
Large number of 0.04 4 0.52 4 0.52 - 0 - 0
third-party sellers
Differentiation 0.03 3 0.39 4 0.52 4 0.52 - 0
and Innovation
Superior SCM and 0.03 4 0.52 4 0.52 - 0 - 0
logistics systems.
Large number of 0.02 - 0 - 0 - 0 4 0.52
acquisitions
Customer 0.02 4 0.52 3 0.39 3 0.39 - 0
Oriented
Self-Driving 0.01 - 0 3 0.39 4 0.52 - 0
Technology
Gathering data 0.01 3 0.39 4 0.52 3 0.39 3 0.39
Weakness 0 0 0 0
Losing Margins in 0.11 2 0.26 - 0 - 0 2 0.26
Few Areas
Tax Avoidance 0.07 2 0.26 1 0.13 2 0.26 2 0.26
Controversy
Product Flops and 0.05 1 0.13 2 0.26 - 0 - 0
Failures
Easily adopted 0.02 1 0.13 - 0 - 0 - 0
business model.
Employee Strikes 0.02 2 0.26 - 0 - 0 - 0
Workplace 0.02 2 0.26 1 0.13 1 0.13 2 0.26
conditions
Limited physical 0.01 1 0.13 1 0.13 - 0 - 0
stores
Opportunities Weight
Penetrate or 0.10 4 0.40 4 0.52 - 0 - 0
expand its
operations in
developing
markets (MENA).
Sudden need of 0.08 4 0.32 3 0.39 - 0 - 0
products due to
pandemic
More acquisitions 0.07 4 0.28 3 0.39 - 0 4 0.52
New partnerships 0.06 4 0.24 4 0.52 4 0.52 3 0.39
Expanding its 0.05 3 0.15 4 0.52 - 0 - 0
production of in-
house brand
Developing 0.05 3 0.15 4 0.52 4 0.52 - 0
technologies
Expanding 0.03 4 0.12 3 0.39 - 0 - 0
physical stores,
Amazon can
improve
competitiveness
Electric vehicles 0.01 - - - 0 4 0.52 - 0
Sustainable
business (Green)
Grocery Market 0.01 4 0.04 4 0.52 - 0 - 0
Threats
Increasing 0.10 2 0.26 1 0.13 - 0 - 0
cybercrime can
affect the
network security
system of the
company.
Economic 0.09 1 0.13 1 0.13 1 0.13 1 0.13
recession
Ukrainian- 0.07 1 0.13 1 0.13 1 0.13 1 0.13
Russian War
Government 0.06 2 0.26 2 0.26 - 0 2 0.26
regulations
Increase in Oil 0.06 2 0.26 2 0.26 - 0 - 0
Price
Aggressive 0.05 1 0.13 1 0.13 1 0.13 1 0.13
competition
globally
Aggressive 0.03 1 0.13 1 0.13 - 0 - 0
competition
locally
Fake Products 0.03 1 0.13 1 0.13 - 0 - 0
Political issues 0.03 - 0 2 0.26 - 0 2 0.26
between USA and
other countries
Fake reviews 0.02 1 0.13 1 0.13 - 0 - 0
9.89 11.44 4.68 4.81
SELECTED STRATEGIES
By calculating the Scores, we have reached a conclusion to prioritize the following Strategies that
match most of our Strengths, Weaknesses, Opportunities, and Threats:

Market Penetration
• Increase Amazon Market Share in Middle East &
Egypt.

Market Development
• Enter New Markets in North & South Africa

SMART OBJECIVES
Our plan to achieve our goals by 2025 through the below Objectives:

➢ End of 2023
o Entering Moroccan Market with Market share 10% by end of 2023 through
launching Amazon.mo and establishing a warehouse near Casablanca port to
serve nearest countries (Algeria & Tunisia)
➢ End of 2024
o Reach 20% E-Commerce Market Share in Moroccan Market by end of 2024
➢ Start of 2025
o Introduce Physical Stores (Amazon GO) in UAE by 10 Stores by end of 2025
➢ Mid of 2025
o Increase Customer Satisfaction Rate in Egyptian Market from 50% to 80% by Mid
of 2025
➢ End of 2025
o Reduce Percentage of Returned Products from 5% to 3% by End of 2025 through
controlling QC on Supplier Selection & SCM Cycle
➢ End of 2025
o Increase Market Share in Egypt by 30% through acquiring Jumia Egypt by End of
2025
Conclusion
We started our Strategic Planning by striding the current Vision and Mission of Amazon, and upon
realizing that Amazon is almost achieving their original vision be earth's most customer-centric
company, we had to dream even bigger to be the number one choice for all consumers world-
wide to fulfill any of their needs.

With that in mind, we started our situational Analysis with several tools and reached many
Strength and Weakness points along with very promising opportunities and risky threats.

Our Situational Analysis has led us to several Strategic options such as:

• Intensive Strategies:
o Market Penetration
o Market Development
o Product Development
• Integration Strategies:
o Horizontal Integration
o Vertical Integration
o Forward Integration
o Backward Integration
• Diversification Strategies:
o Concentric
o Conglomerate
• Defensive Strategies:
o Divesture
o Retrenchment

Comparing the strategies according to their matching with our results, we have selected four
Strategies that matched most of the product line and industries, which are:

✓ Market Penetration
✓ Market Development
✓ Product Development
✓ Horizontal Integration

Using QSPM, we have reached a decision to use both oof Market Penetration and Market
Development. Then we have started setting our SMART objectives, to increase the Market Share
in Egypt, UAE and enter new Markets such as Algeria, Tunisia, and Morocco.
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