SWOT Analysis of Amazon.com

Amazon.com Inc (AMZN) is a leading multinational electronic commerce company and one of the most trafficked Internet retail destinations worldwide. The company is headquartered in Seattle, Washington. Amazon.com, Inc was founded by Jeff Bezos in 1994. Initially the company name was Cadabra which was later on changed to Amazon.com.  Amazon directly sells a very broad range of products, including books, music, videos, consumer electronics, clothing and household products. The SWOT Analysis of Amazon.com Inc is given below:

 

Strengths

 

  1. Amazon.com is the U.S. largest online retailer, with almost 3 times the internet revenue of the runner up, Staples, Inc.
  2. Amazon.com is a highly diversified company including online bookstore, selling CDs, DVDs, MP3 downloads, video games, computer software, furniture, electronics, apparel, furniture, toys and food.
  3. Amazon.com has offices, customer service centers, software development centers and fulfillment centers throughout the Latin America, North America, Asia and Europe.
  4. Amazon focused on building innovative technology and research centers. In 2006, Amazon invested $662 million in the Research and Development.
  5. Amazon had enormous acquisitions which result in faster delivery of products.
  6. Viewers’ assessment is used to distribute information and gives feedback about that information that assists in increasing revenue.
  7. Amazon is known as the major on-line seller of media products which entertain and educate.

 

Weaknesses

 

  1. Amazon’s retained earnings were negative $1.8 billion, $1.4 billion, $730 million and $172 million respectively in the period of 2006-09.
  2. Amazon highly depends on outsource delivery firms and receives 40% of its revenue from partner marketing known as Amazon Associates.
  3. Price bias was found on Amazon. It was identified that Amazon offered same DVD on different prices to some buyers. 
  4. Amazon has been divisive for its charged use of copyright as a competitive barrier.
  5. In 2008, Amazon was criticized for stopping publishers from straight selling at concession from their own websites.
  6. Amazon does not give priority to those customers which distract capital from the firm’s core markets. It has reduced services to its major customers.
  7. Strong reliance on particular suppliers and U.S. market.

 

Opportunities

 

  1. Amazon has to invest in upholding the customer beliefs which will endorse the customer’s loyalty towards the company.
  2. Expanding into technology is desired for all phases of interface with the buyers which will enhance company’s credibility.
  3. Ventures in execution will offer an enlarge level of real customer service meeting consumer expectations.
  4. Partnerships in the community sector such as with the British Library. It will offer community with the service of being capable to search for antique books.
  5. Amazon must have joint-ventures, partnerships and acquisitions to improve the delivery time.
  6. Partnerships with firms looking for on-line retailing proficiency
  7. Promotional activities and seasonal stuff will attract the new customers. 
  8. Amazon can target niche customers by providing stuff in different cultures and religions.

 

Threats

 

  1. Amazon composes customers wait days to take delivery of books that they can get immediately from their area bookstores, and give a deliverance charge for the concession.
  2. Internet trade attracts competitors speedily, and it is hard for Amazon to uphold their stuff differentiated.
  3. Increasing transportation costs impact the end user which will result in negative image of the company.
  4. New alliances, partnerships, networks, shaped by competitors have strengthened competition.
  5. High delivery time and cost may divert customer to the local bookstore.
  6. Incapability to manage some costs, such as delivery and bank charges.

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