Amazon Five Forces Analysis

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MIS Midterm Exam Yihan Wang 1. Using Porter’s Five Forces Model as a base, discuss how the computer application ‘Amazon’ can be used to help insure business success and maintain a competitive advantages. Porter’s Five Forces analysis is a framework for industry analysis and business strategy development. The porter’s five forces contain established industry rivals, customers, suppliers, potential entrants, and substitute products. For Amazon, the rivalries of the Amazon are Barnes & Noble, E-bay, Walmart. For Barnes & Noble and Walmart, they adopt “Brick and click” mode. While Amazon and E-bay adopt “completely online” mode. Especially Amazon has the “one click” patent to attack and retain customers. However, Amazon still face high industry rivalry established bookstores have well customer base, great brand recognition, brand awareness and so forth. Moreover, the established bookstores extend business to the Internet make industry rivalry greater. Also, for the completely online companies like Amazon, E-bay themselves, they have intense rivalry between each other. The threat of new entrants is high since it is inexpensive to set up an online store compared to set up a physical bookstore. Also, the bookstores can easily expend their business to the Internet since they have resources that obtain their physical store business. However, because the Amazon has “one click” shopping technology and brand recognition make competitors difficult to compete with Amazon. The bargaining power of customers is high because customers have a lot of choices. For example, if you want to buy a book, you can go to Barnes & Noble, E-bay or other websites, even many physical bookstores. This kind of intense competition makes Amazon price their p... ... middle of paper ... ...ly. They are willing to put their ads to Google. The advertising by Google generates about $22 billion a year. These advertising money that Google can offer all various products and services at no charge to users. with the rapid growth in the number of users on the Internet and the advent of mobile telecommunications, google is increasing develop. In addition, Google’s ad targeting is sufficiently robust-many of advertisers will pay a premium to get their ads on Google, and the premium id s substantial. Ads are very targeted to specific interested users. That is clearly made the advertising more relevant to the users. That is a very powerful combination. In addition to advertising, Google also runs YouTube, Motorola, Android operating system and so forth. They are the other sources of revenue for Google. But Google still, at its core, an online advertising business.
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