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Competitive SWOT Analysis – Amazon

Competitive SWOT Analysis – Amazon

Amazon SWOT Analysis

Internal Attributes External Factors
Strengths

·         Strong brand

·         Expanding business diversification

·         Technological innovation in the area of business services

 

Opportunities

·         Investing in developing markets

·         Creating new partnerships, especially with players in developing markets

·         Expanding brick-and-mortar presence

Weaknesses

·         Amazon’s business model is easily imitated.

·         Limited presence in developing markets.

·         Limited mortar and brick presence

 

Threats

·         Increasing rivalry between online and physical enterprises

·         Exposure to cybercrime

·         Product and business model imitation

SWOT Recommendations

According to Greenspan (2019), Amazon’s success is attributed to its strong global brand. It is easy for the business to diversify to other international markets with such recognition. Besides, Amazon stands to benefit from its diversified business model. The company can invest in consumer electronics, online retail businesses, and IT services.

One of Amazon’s weaknesses that requires the most attention is its limited brick-and-mortar presence. The online retailer’s acquisition of Whole Foods is one of the moves to address the limitation (Greenspan, 2019). Although the Whole Foods merger is failing, there must be consistent efforts to establish a physical presence.

On the other hand, Amazon has many opportunities to enhance service delivery and overall performance. A significant opportunity is to penetrate developing markets (Greenspan, 2019). Unlike traditional markets such as the US, emerging markets are characterized by consistent market growth.

Finally, among the potential threats facing Amazon is its vulnerability to cybercrime. Clients’ personal information is subject to being targeted by cybercriminals. Some clients have lost significant money after these cybercriminals accessed their credit card information. It is incumbent upon the company to adopt network security measures to address these cybersecurity vulnerabilities.

Summary Business Strategy

Regularly entering new niches is one of the key Amazon business strategies. The company started as a mere online bookstore but has since expanded to sell diverse merchandise and services. Currently, Amazon is associated with multiple industries, including entertainment, cloud computing, B2B, artificial intelligence, and consumer electronics (Dudovskiy, 2020). Diversifying into these business areas will help the company enhance revenue.

Some of Amazon’s innovations occurred accidentally as the company was looking for internal solutions. A good example is the Amazon Web Services (AWS) (Dudovskiy, 2020). The company was experiencing internal operational challenges caused by the massive scale of client traffic. It developed an internal web solution, AWS. Amazon later noticed other big companies were experiencing similar challenges and adopted AWS for business.

Also, Amazon’s customer-centric approach is another core business strategy of the company. Amazon does not focus on short-term profits that may compromise customer loyalty. Instead, it would rather sacrifice short-term profits to safeguard customer benefits (Dudovskiy, 2020). As a result, the company is not excessively bothered by the competition; rather, it focuses on innovation to boost its market profile.

References

Dudovskiy, J. (2020, March 23). Amazon Business Strategy: cost leadership & customer centricity – Research-Methodology. Research-Methodology. https://research-methodology.net/amazon-business-strategy-benefiting-cost-leadership-diversification/

Greenspan, R. (2019, June 22). Amazon.com Inc. SWOT analysis & recommendations – Panmore Institute. Panmore Institute. http://panmore.com/amazon-com-inc-swot-analysis-recommendations

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Question 


Competitive SWOT Analysis - Amazon

Competitive SWOT Analysis – Amazon

When conducting strategic planning, the SWOT analysis is commonly used to assess internal attributes and external environmental factors across four dimensions: organizational strengths, organizational weaknesses, opportunities for the organization, and threats to the organization. In this assignment, you will conduct a SWOT analysis to evaluate one of your company’s competitors.

 Instructions

  1. Choose a company that competes with your organization; conduct research about the company using any resources that contain relevant information
  2. Use a SWOT template to evaluate the company
    • Describe the company’s current strengths, weaknesses, opportunities, and threats
    • Project the company’s long-term (future) strengths, weaknesses, opportunities, and threats
  3. Based on your research findings and the results of your SWOT analysis, use critical thinking to make and defend at least one recommendation for ways the company can improve its strategy in each of the four dimensions:
    • Maximizing current organizational strengths
    • Minimizing current organizational weaknesses
    • Increasing the number or quality of potential opportunities for the organization
    • Minimizing the number or severity of potential threats to the organization
  4. Based on your findings and the results of your SWOT analysis, summarize the business strategy of the chosen company and use examples to support your conclusions
  5. In 275 words, double-spaced, respond to Questions 3 and 4 and submit with your SWOT analysis

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