Option 1: Amazon Australia

Student’s Name
Institutional Affiliation
Introduction and Background of Amazon
In the modern e-commerce environment Amazon is an important player. It is known by majority
of retailers and shopper who make use of it. Amazon.com Inc is an American multinational
company that is based in Seattle, Washington. The technology company deals in a range of areas
including e-commerce, digital streaming, artificial intelligence, and cloud services. The company
was founded in 1994 by Jeff Bezos and was known as Cadabra, Inc until 1995. The company has
set up its operations across the globe including Australia.
Amazon set up its first Australian business in the year 2017. But the company has struggled with
losses across the years posting $5.3 million after tax loss in 2018. The figure in 2018 was
preceded by $8.9 million loss in 2017. The losses led to skepticism among the retailers in
Australia. In this report, the main areas that have been highlighted include current situation,
factors that contribute to success, the challenges and recommendation. At the end of the paper a
marketing plan for the company is provided.
One Analysis Model: Current Situations Facing Amazon
Amazon Australia’s performance is affected by issues that are highlighted through the SWOT
Analysis. One analysis model looks at both internal and external factors that affects the
organization. The internal factors are the strengths and weaknesses while the external factors are
the threats and the opportunities.
Internal Strategic Factors
a. Amazon Australia’s Strengths
The main points that make up the company’s strength include its brand name, business
diversification, high levels of business and technological innovation, and development of better
online services. The brand name is responsible for rapid growth of the business due to
recognition and the confidence that consumers have on the brand (Miller, 2019 pg. 3). The
company is also known for its diversification where it engages in a number of services and
products such as online retail services, cloud computing, online label, advertising and market.
The diversified nature of operations mean that Amazon is self-complementary and formidable in
handling competition.
b. Amazon Australia’s Weaknesses
The company’s main weakness is its inability to make profits over the past two years. Businesses
are created with an aim of being profitable. In case a business fails to meet this goal, it is either
terminated or sold to other investors. At the moment Amazon Australia is not profitable. The
company has struggled with losses due to its weaknesses which include imitable nature of its
business model, low level of penetration in Australia and the existence of brick and mortar
businesses (Miller, 2019 pg. 3). The business model is imitable because other firms can come up
with websites that sell similar products to Amazon. This is one weakness that develops an
opportunity to other companies to impose themselves in the market against the giants.
 c. Amazon Australia’s Opportunity
Amazon Australia operates in an environment that is open to new ideas and ways of operation. It
means that the company has several opportunities for improvement. The external factors that
enhance the position of the company include expansion within different Australian markets,
creating new brick and mortar operations, and partnership with other firms in Australia (Miller,
2019 pg. 3). Within the country there are different developing markets. The company should take
up part of the market before the major and minor competitors exploit the opportunity. Further,
the company has an opportunity to expand the brick and mortar segment in addition to the
current stores. Such widescale expansion enhances the company’s presence in the market.
d. Amazon Australia’s Threats
Amazon Australia operates within a market that is extremely competitive. The company
experiences a number of threats that are in line with the activities that take place in different
markets and industries. Such external factors limit the operations of the company in the short and
long run and the management must be in a position to solve them. Some of the major threats that
Amazon Australia has had to deal with include aggressive competition with other online
ventures, the threat of cybercrime, and imitation of its business model by competitors. The
company faces direct competition from eBay, Apple, Microsoft, Wal-Mart among others. The
competition levels impact on the market share, revenues and profitability.
Factors that Contribute to Amazon’s International Success.
Amazon Inc is a firm that operates around the world and it continues to be an international
success. Some of the most fascinating statistics about Amazon shows the level of success that the
company has shown within the industry. According to Hubspot (2019) Amazon records over 12
million products sells. The data does not include media, wine, books and others services. Further,
the company has more than 310 million active users and 90 million Prime members located in
the United States.
The success of the company is hinged on a number of factors such as email marketing, high
ratings and reviews, customer loyalty, and online video streaming. First, over the years Amazon
has been streaming videos and it is a process has been successful since the launch of programs
such as Transparent (Bhasin, 2018 pg. 2). The use of such strategy shows that the company can
combine shopping, immediate gratification and entertainment in its model. However, there is
always room for improvement when it comes to online content.
The second strategy that has been effective is email marketing. Research has shown that email is
the most important marketing channel that is used by Amazon. The company managed to come
up with the most refined and effective email strategy. The company notes that it is important to
always utilize the opportunities to market using transactional email. The firm has up to nine
marketing and transactional emails that are helpful to the customers.
The company’s international success is hinged on positive reviews and ratings. Amazon is one of
the first companies to provide the comment and reviews sections within its website. Around the
world, the Amazon reviews are well known and they are relied upon by customers. According to
Annex Cloud report, the ratings and reviews platform by Amazon has increased the revenue of
the company by 18 percent. It is based on the fact that shoppers are reliant on content that is
generated by users by up to 1200% (Miller, 2019 pg. 3).
Amazon’s success has also been emphasized by the existing customer loyalty levels. The
company is known for its customer loyalty program which has seen its customer base increase by
50 percent in the last year. The management has augment customer loyalty figures with the
technological applications within its database to come up with data that advice policy makers.
The company has shifted from simplistic analysis of customer loyalty to one that is enhanced
with brand advocacy solutions.
Can Amazon rely on past success factors?
Technology keeps changing on a daily basis. At the same time the level of competition within the
industry is increasing. The need for new technology and increasing competition highlight the
need for Amazon to come up with new ways of enhancing outcome rather than relying on past
successes. The lessons from the past must not be ignored because they offer the management
critical data on how to move forward. However, past success should not hinder the desire by the
management to show high forms of innovation in the existing market. In the technology industry,
there is always something that can be improved by the management.
Major Challenges faced by Amazon
Even though Amazon is a brand that is known around the world, it also faces challenges in its
operations and strategic management. Some of the challenges that Amazon faces include
financial, legal issues, disruptive innovation and competition.
Data shows that Amazon Inc heavily relied upon its Web Services Division to make profits in the
second quarter of 2017 (Bhasin, 2018 pg. 2). The company has posted negative profits in the last
two years of the past half a decade. Losses mean that there is restriction in the margins compared
to the competitors such as Walmart (3.4%) and Target (3.9%) (Bhasin, 2018 pg. 2).
The second form of problem that the company has to deal with is legal issues. The robot
workforce laws are now in place and Amazon is faced with challenges on cost of manpower. The
major threats arise from potential of publishers to cut their links with the company which could
mean fresh problems at the back of their low levels of profitability.
The company is also faced by the challenge of competition and disruptive innovation. Amazon
has been the dominant player in the online marketing industry for a long time. Since 1995 to date
the company has continued to innovate with an intention of staying ahead of competition.
However, the advent of Alibaba has set up the first major challenge that the company has to deal
with.
Pros and Cons of Solutions to Challenges
In terms of increasing profitability levels, it is expected that the company should be ready to
expand its operations into new markets. The main advantage is access to new customers;
however, such a move would mean extensive investment in infrastructure by the management.
The legal problems can be dealt with through adhering to new provisions of the law. The
company should have a team of experts who handle different issues that arise due to changes in
legal provisions ensuring that the company is compliant. However, compliance to the law may
come at an expense to the firm. At this moment when the firm is struggling with high cost of
operations such a move would be detrimental.
Recommendation of best Solution
The best solution that should be used by Amazon is continued innovation. The management of
the company must be in a position to come up with new ways of increasing profits, dealing with
legal issues and competition. Innovation means creating business model that is not easy to
imitate and that is in line with the provisions of the law.
Marketing Plan (2019-2022) and Implementation
The Amazon Marketing Plan is reliant on the company’s digital business strategy. The strategy
involves focus on the customers, testing different market opportunities, and focus on analysis and
testing to better the results. The company is reliant on RACE digital marketing strategy which
has been effective for the past decade.
Vision: “To Offer Earth’s Biggest Selection and to be Earth’s Most Customer-centric Company”
Mission: “We Strive to Offer our Customers the Lowest Possible Prices, the best Available
Selection, and the Utmost Convenience”.
The marketing plan shows different ways through which Amazon can engage in online marketing
within Australia. It also highlights the differences between the strategy applicable for the vendors
and the sellers.
i. General Categories of Marketing Methods
a. Amazon SEO which is a technique that involves optimization of the keyword and the
performance of a given product. The strategy is used in improvement of the organic
ranking when customers make searches. The Amazon SEO is conducted within the
company’s platform or page
b. Amazon Advertising relies on different formats. The methods that are used endorse
individual brands and products. Whenever a brand is advertised on Amazon it is usually
subject to a fee. The nature of advert may involve direct advertisement on Amazon or
advert on another website.
c. External Marketing Measures covers marketing formats that are not part of direct
packages offered by Amazon. The services are offered through different external
channels.
Customers
The Operations of Amazon does not rely on the traditional three sets of consumers which
includes the customers, seller customers and the developer customer (Dudovsky, 2018). Amazon
Australia is seeking to increase the number of active sellers’ customers through increasing the
number of accounts. Research indicates that around one third of product searches around the
globe starts on Amazon. The finding is a proper indicator of the opportunity available for the
company to improve on its performance. The company continues to improve the services offered
to the customer because they make up the firm’s top priority.
Competition
Data from the year 2017 by Amazon Australia shows that the company operates in an
environment that is highly competitive. The competitors of the company are placed into
categories.
a. Online, offline and multichannel retailers
b. Producers and Publishers of the Interactive media and other distribution channels
c. Different search engines, social networks, online and application-based means of
discovery
d. Different e-commerce companies
e. Fulfilment and logistic companies
Amazon Australia must be aware of the competitors and their strength and weaknesses within the
industry. Proper knowledge of the competitor helps in developing effective marketing strategies
in the short and long run.
Financials
The data provided by the company indicates that in the year 2017 the net loss was at $8.9 million
and reduced to $5.9 million in 2018. The marketing plan goal is to improve the financial
performance of the company from 2019 to 2022. The strategy seeks to ensure 30% annual
growth in revenue on an annual basis. The strategy will lead to an increase in revenue hence
attainment of profitability by 2022.
Implementation of Strategy
The marketing plan implementation is pegged on the company’s communication strategy. The
reasons behind development of proper marketing communication include increasing the
customer traffic to the website, create awareness of the products and services of the company,
enhancing repeat purchase, develop incremental products, and strengthen the company’s brand
name. The marketing communication goals indicated above ensure that Amazon Australia
improves its profitability levels.
Secondly, the company indicates that the most effective marketing communication is in line with
its focus on continued improvement of the experience by the customers. This strategy creates
goodwill among the customers and promotes word of mouth promotion which is vital in
acquisition of new customers (Decker, 2019 pg. 3). Further, it is a strategy that assures the
business of repeat customers. Therefore, the existence of customers means profitability.
The other strategy that should be used effectively by the company is personalization through
technology. It is a strategy that is effective in reaching out to markets that are not easy to access.
The technique has effective because it helps in combining the quality of the facilities with the
needs of the customers to ensure high level of satisfaction. The reason for using this technique is
that it helps the management to gain access to a category of customers known as the hard middle.
The company should also make use of online advertising. Such form of advertising involves paid
search marketing, the use of interactive ads, development of search engine optimization options
and using emails campaigns. The process of automation in advertising is the most important
marketing tool. The adverts are vital in driving visitors towards the pages or the platforms and
help in improvement of conversation.
The Amazon Australia marketing plan is concerned with the use of technological application to
improve the performance of company’s products and services. The idea behind the plan is to
ensure improvement in performance. The company has posted loss income over the past two
years. The director of operations has developed the ideas above in line with the mission and
vision of the company.
Bibliography
Bhasin, H., 2018. Marketing strategy of Amazon - Amazon marketing strategy. Marketing91.
Available at: https://www.marketing91.com/marketing-strategy-of-amazon/ [Accessed August 9,
2019].
Decker, A., 2019. How to Create a Profitable Amazon Marketing Strategy for 2019. HubSpot
Blog. Available at: https://blog.hubspot.com/marketing/amazon-marketing-strategy [Accessed
August 9, 2019].
Dudovsky, J., 2018. Amazon Marketing Strategy: a brief overview - Research-
Methodology. Research. Available at: https://research-methodology.net/amazon-marketing-
strategy/ [Accessed August 9, 2019].
Miller, G., 2019. Four Keys to Amazon's Marketing Success (and How to Improve
Them). Annex Cloud Blog. Available at: https://www.annexcloud.com/blog/four-keys-to-
amazons-marketing-success/ [Accessed August 9, 2019].