SWOTT

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SWOT ANALYSIS IN AMAZON
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SWOT ANALYSIS IN AMAZON 2
Amazon is an American worldwide technology company which focuses on e-commerce,
cloud computing. Digital streaming as well as artificial intelligence.it started as a market place
for books but later expanded in to multiproduct company. SWOT analysis investigates the
strengths, weaknesses and available opportunities as well as threats that may make the operation
of the firm vulnerable to failure. Bearing in mind that the company is operating at close to zero
profit margin for over last 5 years the analysis can be used to improve its operation.
Strengths of amazon.
The first strength is that the company has a strong brand name which is well recognized
across the globe and it also makes up an important part in global e commerce landscape. The
brand name has a high value ranked as the second in Interbrand’s global brand Ranking 2020
being worth $200 billion. Secondly amazon is customer focused serving huge number of
customers daily cheaply. Again, the company broaches in existing products and services
regularly. Through that innovation they are able to differentiate themselves from their
competitors. Amazon has formidable board of directors who are proficient in business
management skills hence the company is still flexing its boundaries 28 years after it
start(Baboolal-Frank2021). Furthermore, since the company sells everything online it has avoided
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the overhead cost of operating physical retail shops. The company also enjoys economies of
scale which enables it to regulate expenses and decrease inventory replenishment time. The
company has also enjoyed enormous profits from its several numerous successful acquisitions
for example zappos .com and woot.com. lastly amazon is the market leading company in the
online retail industry with a market value worth over $1trillion and annual revenues over
$386billion.
Weaknesses of amazons
These are restricting factors that the company has the full or partial control and include
the following. Employees reduced morale. Sources have reported that there have been strikes and
demonstration by warehouse workers calling for greater health care and hazard compensation as
well. Again, the company has focused on improving product search and ferrying speed. hence it
does not check the quality of products sold on its market place therefore their customers may
switch to other reliable platforms in future. Thirdly since employees experience at amazon is
exhibited in form of intense competition critical feedback and insensitive practices employees
feel that they are not praised and that there are no benefits as work life balance is disfavored
(Cheng et.,al2021) Fourthly overreliance on distributers subjects the company to a variety of risks.
Also, unethical business practices lower confidence and rises legal risks. this can result to
imposition of huge fines on the company if found guilty. again, some of products offered by the
company are harmful to their customers like pesticides therefore for the sake of customers safety
it is expected to maintain highest standards of safety. lastly few physical shops make it difficult
for buyers to purchase items that are not available in online stores. Tax evasion and loss of
margin in some areas are becoming a major concern in some markets.

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Amazons success depends on its innovations. Some of the new opportunities are; firstly,
is integration of podcast service into its amazon music system. Secondly its self-driving
technology which may beef up its delivery network. Thirdly the company can reduce the degree
of competition by acquiring e- commerce enterprises. Fourthly amazon can prevent counterfeit
sales by coming up with technical measures and organizational control programs. lastly their
package delivery will enable the dominate their market over 10 years. Recently amazon has been
confronted by the following threats. First are counterfeit goods which has made the government
to hold them culpable for the harm caused by counterfeit products sold by third party sellers.
Secondly government prohibition of non-essential products has made the company to suffer huge
loss worth $398 million thus putting the company’s expansion at danger. Thirdly antitrust
investigations as well as inadequate accountability and oversight can reduce its trust. Fourthly
company’s security system can be affected by the growing cybercrime. lastly amazons’ corporate
operations in some important countries has been jeopardized by government rules enforced in
such countries. The above SWOT Analysis may act as future guide and also a road to follow in
future.
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REFERENCES
Baboolal-Frank, R. (2021). Analysis of amazon: Customer centric approach. Academy of Strategic
Management Journal, 20, 1-16.
Cheng, L. C., Chen, K., Lee, M. C., & Li, K. M. (2021). User-Defined SWOT analysis–A change mining
perspective on user-generated content. Information Processing & Management, 58(5), 102613.
Sadq, Z. M., Sabir, H. N., & Saeed, V. S. H. (2018). Analyzing the Amazon success strategies. Journal of
process management and new technologies, 6(4).

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1

SWOT ANALYSIS IN AMAZON

Submission Due Date

SWOT ANALYSIS IN AMAZON 2

Amazon is an American worldwide technology company which focuses on e-commerce,

margin in some areas are becoming a major concern in some markets.

of competition by acquiring e- commerce enterprises. Fourthly amazon can prevent counterfeit

Baboolal-Frank, R. (2021). Analysis of amazon: Customer centric approach. Academy of Strategic

Management Journal, 20, 1-16.

perspective on user-generated content. Information Processing & Management, 58(5), 102613.

process management and new technologies, 6(4).

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