External Environment : Opportunities And Threats Essay examples

External Environment : Opportunities And Threats Essay examples

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EXTERNAL ENVIRONMENT: OPPORTUNITIES AND THREATS
1. THREATS
a. Online security.
i. Amazon stores its online shoppers’ personal information, such as bank account details, which is a target for online thefts.
ii. The more online customers Amazon has, the more attractive as a target it becomes.
b. Lawsuits.
i. The business has already attracted much negative attention from UK and U.S. authorities for tax avoidance and is subject for litigations and fines
ii. Lawsuits are costly and consume time.
c. Strategic alliances.
i. Although Amazon is a massive online shopping mall and can’t be easily surpassed by small competitors, it faces serious challenges from strategic alliances.
ii. For example, the strategic alliance between Apple and e-books content providers allowed the content providers to demand that Amazon would sell e-books for higher price or that they will sell their e-books through Apple store only.
iii. Without the strategic alliance, content providers were unable to compete against Amazon’s bargaining power.
d. Legislation against tax avoidance.
i. There are growing concerns over how huge multinational companies, such as Amazon, avoid paying taxes for the countries they operate in. Eventually, governments will pass a legislation requiring that all companies would pay a fair share of taxes.
ii. In this case, Amazon’s profits would be significantly affected.
e. Regional low cost online retailers.
i. Regional low cost online retailers could outrival Amazon on faster and cheaper shipping, localized product offering and better knowledge about home market.
2. Opportunities
a. Online payment system.
i. Amazon could extend its current payments system and introduce the service similar to PayPal.
ii. Amazon’s payment system ...


... middle of paper ...


...bstitutions for Amazon’s products. Being an online store can be an advantage and also a disadvantage. People prefer a physical presence of the products. There is a substitute for the entire website of Amazon in the UK called Argos. The books, music, furniture, technology, and apparel Amazon offers can all be purchased through physical stores. Although, Amazon still has the upper hand due to their low prices and diligent service.

5. Competitive Rivalry: HIGH
a. Rivalry among competitors is high because of its countless competitors such as eBay, Barnes and Nobles, etc. Amazons search engines compete with google, yahoo, and ask.com. The competition should not threaten Amazon’s growth and success. Thanks to Amazon’s high prestige, it has gained many customers on their side. Due to its popularity and remarkable service, Amazon is likely to remain customer’s favorite.

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