Amazon had a business model that was posed to expand its strategy to include partnerships with established retailers who wanted to streamline their online capabilities. Under this model, Amazon acted as a logistics provider and helped such companies upgrade their online distribution systems. These 3rd party partnerships with large retailers would broaden Amazon’s service offerings and create allies with retailers ... ... middle of paper ... ...’s typically harder to be aware of how to be competitive and what growth demands are on the horizon. An alternative option available to Amazon.com is to provide customers with greater value for their money through utilizing a best cost provider strategy. Amazon has the information available to them.
An economical factor that Amazon has to deal with is that consumers usually want to purchase goods and services in their local stores as they are accessible, other than online shopping. This is because they would rather get their product instantaneously when it’s in stock, than buying that particular product online and having to wait for a standard 3-5 working days for it. Also the foreign exchange fluctuations can cause problems as there are different currencies in the European market which weigh against the US dollar (Stockport, 2009), which can diminish their pricing strategy and bring on further costs. Amazon’s social factors are that currently the ... ... middle of paper ... ...take over the tablets market and gain a competitive advantage over its rivals. Since e-books and tablets are associated to the Kindle, Amazon has the ability to provide even more awareness to other target markets (Amazon, 2012).
Benefits for Amazon – From its modest beginnings as the "World 's Largest Bookstore," till date Amazon has dominated many segments of retailing, to the extent that it has helped cause the extinction of a number of brick-and-mortar retailers. Amazon 's extended marketplace of individual vendors, to the fulfillment and warehousing services it offers to its partners, to its very convenient returns policy, to Prime itself, Amazon has constantly innovated both horizontally (across product areas and business policies) and vertically (over supply chain and distribution). Amazon is taking efforts with every measure possible to make the Amazon name synonymous with retail, whether it 's online or offline. Amazon’s intensive growth strategy to develop
With the website being so accessible, a customer can get everything they need in one stop and not have to interact with a live person (Morris, 2013). With the help of product reviews and the website being mostly frustration free, shopping at Amazon.com is a satisfying customer experience. Weaknesses • Low Profit Margins- Amazon does has a lack of profitability from having such low-profit margins. There is around 1% profitability but Amazon seems to say that this is their strategy and it is used to deter the entry of new businesses into the market (“Here’s Why Amazon’s Profitability is So Low”, 2014). With how much they invest in the long term, the profitability will remain low for Amazon and could deter future investors with the low margins.
PESTEL analysis is the technique where political, economic, socio-cultural, technological, environmental, and legal factors are evaluated to identify external forces that impact market’s growth or decline. Assessment of the external environment helps to recognize key drivers and create a development strategy for the company. Political Factor International regulations are slowing Amazon’s expansion. Some countries’ regulations limit possibilities of internet purchases. However, internet providers bring faster and more affordable internet to more consumers which enable more consumers to shop at Amazon.
In this case, Amazon is quite competitive in term of its prices, and has strategic approaches of staying up front of its market competitors (Chevalier and Goolsbee 2003). For instance, when a person is considering to purchase a particular book, Amazon has options whether that individual would prefer a new copy or a used one, and it also presents the prices for these books together with their conditions. A further proposal is to pay to create a premium account, where the items purchased would be delivered quicker. Amazon’s competitive prices also results from the minimum number yet well skilled employees, thus the customers are actually benefitting from the reduced cost of overheads, hence, the low prices of Amazon
SUMMARY Amazon.com, Inc. (hereafter referred to as “Amazon”, “it”, “the business”, or “the company”), is an online retailer that has branched into content creation and web services. Its main competitors include retail giants Wal-mart and Target, as well as entertainment providers Netflix and Barnes and Nobel. Recently, it has found itself competing with technology giant Apple as ventures into cloud services. Amazon was incorporate in 1994 and was offered publically in 1999. It has grown rapidly into the world’s number one online retailer, with millions of products.
It was 1995 when Amazon opened its virtual doors for business. Since its inception Amazon has become the world’s largest e-commerce retailer by diversifying its portfolio. Amazon operates retail sites for twelve different countries. (Amazon.com, 2014) Amazon consists of over fifteen lines of business such as AmazonPrime, AmazonSupply and AmazonWarehouse Deals. Amazon reports their income in American and International segments.
Amazon Inc. is an e-commerce corporation that happens to be one of the sustainable online retailers in the United States. Just last year, it was reported that Amazon has exceeded Wal-Mart as the most valuable retailer in the United States. Starting off as an online bookstore, the company has grown since 1994 when the CEO Jeff Bezos introduced it. Over the years they have branched out to selling electronics, food, clothes, toys, and furniture. They have also developed their own line of products such as the Amazon Kindle, Fire Phone, and Fire TV.
Suggest and evaluate one possible strategy for Amazon.com, using the Value Chain methodology. According to Webb and Schlemmer (2008) the firm’s infrastructure related to Amazon.com is that they consist of having the utilisation of technology so that they can connect with services in worldwide locations which cut costs and investment. Customer data is stored in warehouses where details can be saved in their data banks, although there has been a case when customer data has been lost so it’s not too reliable (Webb and Schlemmer, 2008). According to the Amazon strategic plan of the value chain, for the Human resources, Amazon grant their employees fringe benefits such as holiday pay, relocation allowances health insurance etc. This means that these types of benefits has the capability to be a focus for workers who have an ambition of working for Amazon that are vastly experienced, and also the hourly wage of an average of $10 dollars would also appeal to them (Webb and Schlemmer, 2008).