Strengths And Weaknesses Of Amazon

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Recommended: Internal analysis of Amazon

CORPORATE OVERVIEW. Since opening for business as "Earth 's Biggest Bookstore" in July 1995, Amazon.com has expanded into a number of other product categories, including: apparel, shoes and jewelry; electronics and computers; movies, music and games; toys, kids and baby; sports and outdoors; home and garden; tools, auto and industrial; grocery; health and beauty; and digital downloads. AMZN has virtually unlimited online shelf space, and can offer customers a vast selection of products through an efficient search and retrieval interface. The company personalizes shopping by recommending items which, based on previous purchases, are likely to interest a particular customer. Key Web site features also include editorial and customer reviews, manufacturer product …show more content…

However, AMZN faces intense price competition from bricks and mortar retailers as well as other Internet retailers. Other challenges and weaknesses inherent in Amazon 's business model include low switching costs for consumers when shopping online, and search engines that simplify and enable comparison shopping. Strengths of the company, in our view, include: strong brand name recognition; the breadth and depth of the company 's product lines; a user feedback feature that we believe helps to build trust and increase customer loyalty; what we see as a strong balance sheet, with over $17 billion in cash and marketable securities and no long-term debt; and efficient deployment of capital on technology to help promote a fast, user-friendly shopping experience. We believe the size of the market represents an opportunity for AMZN. In 2014, only about 6.5% of total U.S. retail sales were estimated to be e-commerce transactions, totaling $305 billion, according to the U.S. Department of Commerce. Meanwhile, Forrester Research expects e-commerce sales to increase at a compound annual growth rate (CAGR) of 9.5% over the next several years, reaching about $414 billion by

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