Amazon is an e-commerce company that is rated as one of the four biggest hi-tech companies in the world with 566,000 employees (2018). The brand was founded in 1994 by Jeff Bezos. Amazon is a versatile brand that focuses on e-commerce, cloud computing, digital streaming, and artificial intelligence. The enterprise is termed as the first company that offered online products to customers. In the year 2017, Amazon earned US$140.235 billion from online sales. Currently, the company is based in Seattle, Washington. Amazon is a popular online e-commerce website that offers diversified items like DVDs, music, video games, electronics, clothing and much more. Each marketing learners or scholars need to know the Amazon SWOT Analysis.
SWOT of Amazon | Amazon SWOT Analysis
Strengths
Lowest Operating Cost and Structure
Amazon is said to be the 2nd largest online retailer with extraordinary growth. Amazon has been phenomenal in reducing operations costs. The enterprise retail physical channels have high operational costs than online channels. Therefore, the Amazon market structure allows it to sell more products online with low operational costs. This feature allows existing customers to get a reduced price on various items.
Leverage of Choice:
Amazon is currently selling more than 562.3 million items online. It is the largest store with a huge list of versatile items. From a customer point of view, all items should be available under a single platform. Amazon is an enterprise that offers a vast range of products through online channels.
Online Traffic:
Amazon’s marketing strategy is a key factor in generating business. Amazon’s marketing policies are way better than their competitors. Right now, third parties sellers are more interested in selling through Amazon because of its incoming online traffic. Amazon can generate traffic from other links. In comparison, Amazon competitors in the market are weaker in their marketing domain.
Amazon Services:
Ecommerce websites heavily rely on online customers and web services. Amazon has top of the line website that offers quick services to all. The web-page loading time and speed are just amazing in terms of the response. At Amazon, customers can purchase any item they like without any kind of delay.
Wide Distribution Network:
For distribution network plays an important role in reaching the customers. Amazon is ahead of its competitors with the largest structured distribution network. Any product purchased online can be delivered to a customer at any remote location.
Acquire Other Companies:
Amazon is expanding its business not only with the sales targets but also acquiring other companies. The e-commerce brands like Zappos.com, Junglee.com, IMBD.com, woot.com are already purchased by Amazon. The e-commerce giant has proved to be a value-added service in online purchasing portals.
SWOT of Amazon | Amazon SWOT Analysis
Weaknesses
Free Shipping:
At Amazon, there are no charges for delivery at all. With free delivery services, the margin of profit can shrink to a remarkable level. As a company, shrinking margins can be quite alarming because it can lose the capacity of generating and expanding the business.
Tax Controversy:
Amazon suffered a lot with the tax controversy. It is said that Amazon avoided tax in the US and UK. Due to this controversy, amazon has lost a great number of customers in Europe.
Limited Physical Stores:
Amazon largely relies on online sales. There are limited physical stores available to customers. Most of the buyers suffer a lot because of some items not sellable online. In that case, there are physical stores available. With Amazon, there are limited physical stores for customers.
Failed Products:
Amazon is not restricted to third party product sales. There are Amazon products available online. Likewise, Amazon recently launched its first fire phone. It turns out to be a disaster for the company. Fire phone had unattractive features and design. Online buyers didn’t show any interest in the product at all. There are several other Amazon products that also failed to gather the attention of the customers.
SWOT of Amazon | Amazon SWOT Analysis
Opportunities
Backward Integration
Amazon can have back integration as it can play an important role in expanding the business. There are multiple advantages to acquiring successful businesses. It is beneficial in reducing items cost. Backward integration also improves efficiency. The margins of profits increase with the reduction in transportation costs.
Revamp Policies
Some measures required for revamping the policies. Technological improvements can reduce fake sales and services. Over the years, people found unrealistic sales at Amazon. To handle these issues, Amazon can review its policies to a certain level.
Limited Physical Stores:
The physical stores are in a few locations. Most of the stores are in the US only. There is a need to establish stores in other parts of the world to increase sales.
More Acquisitions
Buying more e-commerce companies can increase the customer base. Moreover, market share is expandable by taking other enterprises. With acquisitions, Amazon can reduce competition with lots of other opportunities.
SWOT of Amazon | Amazon SWOT Analysis
Threats
Shrinking Margins:
There is tough competition between the companies dealing in online sales. Due to competitive pricing, the margin of profit can shrink to a minimum level.
Brand Image:
Amazon hit the news in the year 2010 for selling a controversial book online. These controversies can damage the overall brand image of the company.
Regulations Threats:
For any business enterprise changing regulations is always a threat. For business proceedings, these regulations must be flexible and appropriate. Amazon shipments restricted in some countries due to governmental policies.
Data Security:
For an online retail company, data is of core importance. For secure and safe data, Amazon must have to invest in data security. It is critical for company operations all over the world. You can hire professional resources to deal with data security and integrity.
About the Author
The Wiselancer Platform is ready to help students, large and smaller enterprises in the development of Quality Content, Marketing Strategy, SWOT Analysis, and Pestle Analysis or else. According to Bill Gates, “Content is King” This is a well-known phrase used in the marketing world. Thus, for a high success rate, flawless marketing, and its implementation, our team is ready to provide SEO Optimized Quality Contents. It will help to get a solid growth foundation with the latest promotional tools. For any kind of professional help, we always welcome clients who are looking for diversified marketing experiences.
After having worked for 32 years for famous organizations and during the tenure, he worked on different positions. During his working life, he visited 30+ counties of the world in 4 continents and stayed 2 years in Genève (Switzerland)
Shamsul began blog https://wiselancer.net/ & the cooking website https://www.cookawesome.com/ and writing for Freelancer.com regularly.