Amazon has several strengths as the global e-commerce leader, including its strong brand, large customer base, extensive product selection, and successful business models. However, it also faces weaknesses such as an easily imitable business model and negative publicity over tax practices. Opportunities for Amazon include expanding into new countries and acquiring other companies. Threats include increased government regulations and competition from other major retailers.
Amazon has several strengths as the global e-commerce leader, including its strong brand, large customer base, extensive product selection, and successful business models. However, it also faces weaknesses such as an easily imitable business model and negative publicity over tax practices. Opportunities for Amazon include expanding into new countries and acquiring other companies. Threats include increased government regulations and competition from other major retailers.
Amazon has several strengths as the global e-commerce leader, including its strong brand, large customer base, extensive product selection, and successful business models. However, it also faces weaknesses such as an easily imitable business model and negative publicity over tax practices. Opportunities for Amazon include expanding into new countries and acquiring other companies. Threats include increased government regulations and competition from other major retailers.
Amazon has several strengths as the global e-commerce leader, including its strong brand, large customer base, extensive product selection, and successful business models. However, it also faces weaknesses such as an easily imitable business model and negative publicity over tax practices. Opportunities for Amazon include expanding into new countries and acquiring other companies. Threats include increased government regulations and competition from other major retailers.
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Amazon’s Strengths
Strong brand name: Being a global e-commerce leader, Amazon has
a solid position and fortunate brand image in the market. Brand Value: Amazon holds #2 position with a brand value of $200 billion according to Interbrand’s Global Brand Ranking 2020. Customer Intended: Amazon serves to a huge number of customers for daily needs at very affordable prices, which lead to made it a customer-oriented brand. Largest Merchandise Choice: Amazon owns immense product mix which captivates online customers to make their majority of purchases from them rather than buying from other online merchandise. Amazon.com has sold nearly 570 million products as of 2018. Large number of third-party sellers: Amazon offers easy to use services for third-party sellers, due to this many such sellers have joined Amazon to sell their merchandise. According to Fulfillment by Amazon (FBA), there are more than 2 billion items available by third- part vendors. Go Global and Act Local: This strategy proved to be the best for Amazon. Amazon believes in having partnership with local vendors/supply chain companies that helps them to compete against other e-commerce rivals. As they understand the local needs, they have launched various campaigns in different countries. For example, the very famous and successful campaign launched in India by Amazon was “Aur Dikhao”. 3 Key Business: Amazon Web Services (AWS), Amazon Prime, and Amazon Marketplace are the 3 key profitable businesses of Amazon.
Amazon’s Weaknesses
Simply imitable business model: Online businesses are trending
these days in this digital world. So copying Amazon’s business model for competitor firms is not so tough. Some businesses have already started giving tough time to Amazon, few examples are eBay, Netflix, Barnes & Noble, Azure. Losing Margins in few area: In some areas where Amazon has provided free shipping like in India has faced the risks of losing margins. Product failures: Fire phone and Kindle are the big failures in US launched by Amazon. Tax Prevention Controversy: Tax prevention in US, UK, and Japan has led to negative publicity of Amazon and same was criticized by earlier President Donald Trump. Biased use of third party data: Biased trade practices spoils trust and increases legal risks. Amazon is cladding antitrust charges in European Union. Employees strike: Strikes can crush Amazon’s operations to a stop. Employees in Germany went on strike due to unsafe working environment and disabled operations in six different centers.
Amazon’s Opportunities
Business expansion: Amazon has gained the opportunity to
expand its operations in various developing countries. Penetrating physical stores: By improving competiveness against its business rivals, Amazon can engage their customers with the help of their physical stores. More Acquisitions: More number of acquisitions of e-commerce firms can grow the Amazon’s share value and lessen the competition. Background Integration: Extending its in-house production of brands such as Amazon’s Basics can help in doing background Integration which further lead to improve profit margins. Self-Driving Technology: Recently Amazon acquired California- based startup company Zoox Inc. Now they have the opportunity to leverage autonomous technology to meet the demands for ride- hailing services and improve its own delivery services. Launch of electric rickshaws: Keeping in mind regarding positive impact on the environment, Amazon is planning to provide 10,000 electric rickshaws in India in near future.
Amazon’s Threats
Government Regulations: In few countries, government
regulations do not allow Amazon to pursue their operations such as Cuba, Sudan, Syria, Iran, and North Korea. Aggressive Competition: Competition with big retail companies like eBay and Walmart can give Amazon a hard time in the near future. In addition to this, there are many more competitors in the market. For examples, in video streaming services, Apple Tv+, Netflix, Disney+ are the biggest competitors, in logistics, FexEx is the rival. Fake Products: The increase in counterfeiting products threatens Amazon’s brand image. Recently Amazon was caught in a legal case for selling fake Valentino shoes. Economic Recession: Amazon is not exempted to economic recession. Recent example is 2020 pandemic situation has also huge impact on Amazon operations. Exploitative Labor: Amazon is one of the giant retail e-commerce site and they are facing audit from the US department for sustaining labor resources linked with human right abuses. This results the company to economic, legal, and reputational risks. Fake Reviews: Amazon has massive amount of fake reviews, and this was worsened during pandemic. Product reviews are critical factor for the customers to purchase items and to check the authenticity of the products.
Improvement Areas
SWOT Analysis explains the current status of Amazon. It clarifies the picture for further improvements to overcome the lacking and strength its market position. Few recommendations are given below: The brand needs to focus more on client commitment and retention via secured payment gateways, consumer rights, and complete data management strategies. Amazon should continuously monitor the competitive market. Strategic planning for its growth will help the brand to enter in many developing countries. Focusing on the technological measures will help to address issues of counterfeit sales and cybercrime. Uplifting its marketing efforts, promotional undertakings, and competitive benefits should help them to make more profits and improve its brand image.
Conclusion The artistry to conduct SWOT analysis with excellence is an expertise every marketer and business owner should have. SWOT Analysis lets you easily identify what is right and what is wrong, what are the opportunities and obstacles coming your way. It guides in strategic planning on which the organization can perform and take the advantage of external environment. Looking at the Amazon’s SWOT Analysis, gave us more clarity regarding the whole process.
