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Amazon.com Incl. SWOT Analysis

Jonathan Croghan

Lindsey Wilson College

BUSI- 2903

Dr. Cathy Boatright

11/04/2021
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Amazon.com Incl. SWOT Analysis

Introduction

On July 5th, 1994, Jeff Bezos formed Amazon.com, Inc. (or simply Amazon) in

Bellevue, Washington. The company began as a book-only online marketplace. However, as the

company grew, it began to sell electronics, furniture, jewelry, and just about everything else.

Amazon's performance can be seen around the world. It has over 290 million daily active users

and 100 million customers worldwide, (Ratnasingham, 2016). Amazon, as the world's largest

online retailer, has a long list of accomplishments, record sales, and successful releases. The

company's greatest achievement came in 2015, when it outperformed its largest supermarket

rival in the United States, Wal-Mart, in terms of market capitalization. Amazon is also the

world's third largest brand and the fourth most valuable business in terms of market

capitalization, (DONICI, et, al, 2012).

SWOT Analysis

The fact that Amazon.com Inc. is a market leader in the online shopping industry

suggests that the company has addressed the problems identified in this SWOT analysis. The

SWOT Analysis model includes an internal analysis that identifies the strengths and weaknesses

(internal strategic factors) of the e-commerce sector, as well as an external analysis that identifies

risks and opportunities (external strategic factors). This Amazon SWOT review demonstrates

how the company uses its strengths to transcend its vulnerabilities and mitigate challenges to its

business in order to optimize the benefits of leveraging global market opportunities. Given the

global reach of an e-commerce company's activities, the industry situation is complicated.

Amazon continues to resolve the issues rose in this SWOT Analysis in order to maintain a long-
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term competitive advantage, (Ratnasingham, 2016). The company's strategic management

strategies are in response to changes in the retail, consumer goods, consumer electronics, and

Internet-based services industries. Amazon.com Inc.'s general competitive advantage approach

and intense development strategies are focused in part on the internal and external factors

identified in this SWOT analysis.

The need for a good brand image, as well as other strengths relevant to the online market,

is highlighted in this Amazon SWOT analysis. Given the rapid advancement in technology, the

organization must continue to strengthen its positions. These advantages could counteract the

impact of Amazon.com Inc.'s fierce rivalry, as revealed by Porter's Five Forces review. To

overcome the problems identified in this SWOT report, the e-commerce business must retain

strategic coherence.

Amazon’s Strengths (Internal Strategic Factors)

The e-commerce success of Amazon.com Inc. is based on the successful use of market

strengths, (Pandit, & Poojari, 2014). This part of the SWOT Analysis process enumerates the
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Amazon's internal strategic considerations for maintaining and improving its operations in the

online retail, technology goods, and online services sectors. Amazon's performance and

continued development was bolstered by the following strengths:

• High capability for rapid technological innovation, especially in online services • 

• High capability for rapid technological innovation, especially in online services 

• Cutting-edge pricing

• Brand assessment

• Innovation and differentiation

• The Most Extensive Merchandise Selection

• There are a lot of third-party vendors.

• The "Think Global, Act Local" approach

• Involved in three key businesses – Amazon Marketplace, Amazon Web Services (AWS), and

Amazon Prime are three of Amazon's key businesses that collaborate and support one another.

• Extensive logistics and distribution networks

In the online market, Amazon.com Inc. has the most powerful brand. When it comes to

brand awareness and consumer trust, this strength is partly responsible for the company's rapid

growth, particularly in its early years. In this Amazon SWOT review, one of the strengths is

moderate market diversification. For example, the company also offers consumer electronics,
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online retail services, brick-and-mortar (non-online) retail services, private-label products, and

information technology services, such as cloud computing services, (DONICI, et, al, 2012).

Amazon.com Inc. has a diverse set of operations that complement each other and make it a

formidable competitor. Furthermore, the business's high capability for rapid technological

advancement improves its capacity to react to developments, at least technologically. Internal

factors like these are important in this part of the SWOT analysis because they help Amazon

achieve its corporate objectives and strategies.

Amazon’s Weaknesses (Internal Strategic Factors)

Amazon's weaknesses pose obstacles that limit the company's ability to succeed and

expand. This section of the SWOT Analysis model details the internal factors that obstruct the

company's growth or improvement. The following weaknesses are the most relevant in Amazon's

case:

• Imitable business model

• Controversy over Tax Avoidance

• Inappropriate use of third-party data

• Excessive reliance on distributors

• Employee industrial strikes

Amazon.com Inc. has a simple business model that everyone can copy. Many businesses,

for example, can set up e-commerce websites to sell almost anything, (Kenny, 2019). This
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internal aspect is a flaw in the SWOT analysis system that allows other companies to compete

more effectively against the e-commerce behemoth. Amazon's limited presence in emerging

markets is also a flaw that prevents the company from benefiting from these markets' rapid

economic growth. The company's small brick-and-mortar presence, on the other hand, is a

roadblock to rapidly expanding in the non-online industry. Despite this, Amazon is on track to

expand its non-online operations following its acquisition of Whole Foods Market. Overall, the

internal factors in this section of the SWOT analysis present challenges to the group, especially

in terms of growth in existing and new e-commerce markets, (Kenny, 2019). To address these

issues, Amazo.com Incl. will need to change its organizational structure and design, as well as

make strategic planning and management adjustments.

Opportunities for Amazon.com Inc. (External Strategic Factors)

There are many ways to increase Amazon.com Incl. performance and service quality.

External factors that a company may use to boost its market, such as expansion in the global e-

commerce sector, are identified in this section of the SWOT Analysis model. Amazon.com Incl.

has the following options in this case:

• Market expansion in emerging markets

• New partnership with other firms, especially in emerging markets • Expansion of brick-and-

mortar business operations

• Self-Driving Vehicles
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• Increasing the number of e-commerce companies acquired will help the business gain market

share and minimize competition.

Amazo.com Inc. has an opportunity to get into emerging markets, (Majed, et.al, 2018). This

move could give the business a competitive advantage by allowing it to establish its presence

before other major e-commerce firms. In relation to the flaws found in this SWOT study, there is

an opportunity to enhance Amazon.com Inc.'s brick-and-mortar operations. This external

concern leads to potential cost carrier based that comes with establishing a stronger presence

through multiple brick-and-mortar outlets in addition to Amazon Go sites that are already open.

Furthermore, as an external strategic feature, the company will use its ability to establish new

partnerships with other companies to expand its role in the international e-commerce market,

(Majed, et.al, 2018). Amazon.com Incl.'s corporate social responsibility strategy and

management control efforts can be aided by collaborations with companies that have a strong

reputation for corporate governance. These external factors would aid the company's market

expansion and revenue growth. As a result of this element of the SWOT study, Amazon will

continue to expand amid rising market saturation.

Threats Facing Amazon (External Strategic Factors)

As a result of its operations in a number of industries and markets, Amazon is exposed to a

variety of threats. External factors that limit or prevent business growth and performance, such as

in e-commerce activities, are considered in this part of the SWOT Analysis framework,

(Onyusheva, & Seenalasataporn, 2018). The following risks to Amazon.com Inc.'s industry

climate must be addressed:

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• Online and non-online companies competing aggressively

• Cybercrime

Imitation of business models and goods

• Amazon's business practices could be jeopardized by government legislation in a few key

countries.

• Counterfeit Products

• Economic Downturn

Competition remains one of Amazon.com Inc.'s most significant obstacles, with rivals

such as Wal-Mart among others. This intense competition reflects the organizational

development challenges in the markets for consumer electronics, retail, e-commerce, digital

online content distribution, cloud-based services, and other technical services. Cybercrime is also

important to Amazon.com Inc.'s SWOT analysis, (D'Agostino, 2018). Cybercriminals endanger

the company's security and credibility, as well as client’s confidence. This vulnerability is

identified as one of the technological developments impacting the industry by Amazon.com

Inc.'s PESTEL/PESTLE review. Another danger is imitation, which is an external force that can

decrease an e-commerce firm's market share and brand equity. Amazon's marketing mix, or 4P,

tends to mitigate the threat's negative impact. Overall, the external strategic factors presented in

this section of the SWOT review indicate that stronger steps are needed to strategically resolve

challenges in the e-commerce, retail, consumer electronics, consumer goods, and information

technology services industries.

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Conclusion

Large corporations, such as Amazon, may be elevated to the status of being "resistant to any

potential threat." The shortcomings and achievements of any organization, however, cannot be

seen without a detailed examination of its inner workings. As a result, a SWOT review is an

essential method for your organization to use in order to eliminate risks and maintain potential

success. Amazon.com's sales model, which is built on low prices, a wide range of products,

convenience, customer loyalty, product reviews, and fast delivery, hits a variety of high-demand

features in today's retail environment. Therefore, Amazon.com Incl. may dominate the online

selling market for a quite long period of time unless otherwise.

References
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D'Agostino, J. L. (2018). The Impact of E-commerce on Brands: An Analysis of Amazon and a

Plan for the Future (Doctoral dissertation, University of Oregon).

DONICI, A. N., MAHA, A., IGNAT, I., & MAHA, L. G. (2012). E-Commerce across United

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Odeh, M., Warwick, K., & Garcia-Perez, A. (2015). The impacts of cloud computing adoption at

Higher Education institutions: a SWOT analysis. International Journal of Computer

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Onyusheva, I., & Seenalasataporn, T. (2018). Strategic Analysis of Global E-Commerce And

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Pandit, V., & Poojari, A. (2014). A study on amazon prime air for feasibility and profitability: A

graphical data analysis. IOSR Journal of Business and Management, 16(11), 06-11.

Kenny, S. E. (2019). Strategic Audit of Amazon. com, Inc.

Majed, S. Z., Nuraddin, S. H., & Hama, S. V. S. (2018). Analyzing the amazon success

strategies. Journal of process management. New Technologies, 6(4), 65-69.

Ratnasingham, P. (2016). A SWOT analysis for B2C e-commerce: the case of Amazon.

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