The tech giant has “a reputation for providing customers with everything that they need, all in one place. Efficient customer relationship management practices also belong to the list of strengths possessed by Amazon. Accordingly, Amazon has been justly described as “a brutal competitor for brick and mortar merchants due to their large and growing cost advantages and a maniacal commitment to having the lowest prices anywhere”. Physical retailers can’t do that and if they drop prices online they risk cannibalizing their own sales and driving margin down while having all the same overhead costs.” This advantage is gained by the company thanks to an extensive exploitation of the economies of scale. “Amazon can operate on razor-thin margins and still make money on the transaction. The e-commerce giant efficiently utilizes its lean cost structure as one of its main sources of competitive advantage. Strong and growing ecosystem is a considerable strength for online retail behemoth to achieve long-term growth.ģ.
Moreover, Amazon smart glass is based on Alexa voice assistant and can be used only if the device is linked to a user’s smartphone. Amazon products and services within the ecosystem are highly compatible with each other and as such, the usage of one product or service within the ecosystem encourages the usage of other related products and services.įor example, Amazon smart security camera that is compatible with the Echo smart speakers allows users to stream live video from the camera on the Echo Show or through the Alexa smartphone app. Specifically, the ecosystem of the tech giant comprises retail, payments, B2B, entertainment, hardware, logistics, cloud computing and other segments. Amazon possesses a strong and growing ecosystem of products and services. Furthermore, the more products and services Amazon sells, the more customer-specific information the company has to feed its Artificial Intelligence (AI) systems to help generate more sales.Ģ. Current market leadership position grants the tech giant upper hand in the competition in a number of ways such as economies of scale and brand recognition. Dubbed as The Everything Store, Amazon sells hundreds of millions of products of its own and third-party sellers. The e-commerce giant generated USD 386 billion revenues and earned a net income of USD 21,3 billion in 2020 alone. Amazon is an undisputed market leader in online retail and cloud computing segments. Andy Jassy failing to fill Jeff Bezos shoes effectivelyġ. Patent infringement and other lawsuits against the companyĤ. Developing more local sites in international marketsġ. Increasing physical presence of the brandĤ. Increasing focus on own brand products and servicesģ. Diversification of e-commerce business segmentĢ. Working conditions for warehouse workersġ. Damage to the brand image due to tax avoidance controversies in USA, UK and Japanĥ. Weak competitive position of Amazon’s Fire PhoneĤ. Cost leadership due to efficient cost structureģ. Strong ecosystem of products and servicesģ. The following table illustrates Amazon SWOT analysis:Ģ.
Moreover, it is important for the company to take advantage of opportunities and adopt a proactive approach in dealing with threats in the marketplace.
Amazon, as the e-commerce and cloud computing company worldwide needs to build upon its strengths at the same time reducing negative impact of its weaknesses on the bottom line. SWOT is an acronym for strengths, weaknesses, opportunities and threats related to organizations.
0 kommentar(er)
