preview

Swot Analysis Of Amazon

Good Essays
• Customer Centric- Amazon’s focus is to be the “Earth’s Most Customer-Centric Company” (Thompson, 2016, para. 3). This has always been the focus of Jeff Bezos from day 1. Since Amazon is an online shopping site, they can provide personalized recommendations based off of what customers buy. There is always a review system that helps customers to make the right purchasing decisions. Being customer-centric is one of Amazon’s biggest strengths because it’s what helps it to be successful. • Low cost structure- Amazon has a low cost structure business model, where they provide their customers with products at the lowest price possible. By offering customers cheap products with fast shipping, this leads to a jump in sales (Yarow, 2013). Amazon is…show more content…
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. • Diversification-moving away from core competence- At the beginning, Amazon’s focus was selling books online and they have now moved onto difference ventures. While branching out helps the company to grow, they may be doing too much and losing their strategic advantage. If they don’t focus in on what made them successful, they could get lost in the shuffle and open themselves up to…show more content…
There can be identity theft as well as hacking in to customer data which is a concern for Amazon’s huge customer data base (“SWOT Analysis of Amazon”, 2016). Amazon has to ensure customers that their information is secure when shopping with them. • Competition- Amazon has many competitors they are up against. They have the retail market competitors like Wal-Mart and Target, the online competitors like Ebay, and then various other businesses depending on the product category. For Jeff Bezos, he wants the business to focus on the customer (Bishop, 2013). While other businesses are distracted with trying to get ahead of Amazon, Amazon is focused on the customer and not the competition. • Low entry barriers to industry- Since Amazon is an online retailer, there are low barriers of entry. Anyone who wants to can set up an ecommerce website and start selling their own products. This is a potential threat to Amazon because anyone can start their own website and achieve to sell more than Amazon. This would take a good amount of time to even try to accomplish, but it is still a looming
Get Access