Amazon.com Inc.

’s
Generic Strategy, Intensive Growth
Strategies

Amazon’s e-commerce website showing deals to attract consumers. Amazon.com Inc.’s generic strategy
for competitive advantage (Porter’s model) and intensive growth strategies support the company’s
objectives in dominating the online retail market.

Amazon.com Inc.’s generic strategy for competitive advantage, based on Michael Porter’s
model, shows the approach that the organization uses to develop its business amid tough
competition in the online retail market. As the largest online retailer in the world, Amazon
proves to be highly competitive, even against giants like Walmart [Read: Walmart’s Generic &
Intensive Growth Strategies]. Amazon’s intensive growth strategies are responsible for business
growth and expansion. For instance, the company’s provision of its e-commerce services outside
the United States shows business plans for international growth. Through effective
implementation of its generic competitive strategy and intensive strategies for growth,
Amazon.com succeeds in the global e-commerce market.

Amazon’s generic competitive strategy enables the e-commerce business to offer goods and
services at affordable rates. The intensive strategies of Amazon.com Inc. support continuing
international growth.

Amazon.com’s Generic Strategy (Porter’s Model)

Amazon uses cost leadership as its generic strategy for competitive advantage. Minimization of
operational costs is the objective in this generic competitive strategy. For example, Amazon.com
uses advanced computing and networking technologies for maximum operational efficiency,
which translates to minimized costs. Considering the nature of e-commerce, the company
benefits from process automation, which is generally used in purchase processing, scheduling,
and other operational processes. These benefits enable Amazon.com Inc. to minimize the cost of
its online retail and other services.

A strategic objective linked to Amazon’s cost leadership generic strategy is to build e-commerce
competitive advantage through continuous improvement of information technology
infrastructure. In relation, the company also has the strategic objective of heavily investing in
research and development (R&D) to optimize the performance of its IT resources. In addition,
the cost leadership generic competitive strategy pushes Amazon.com Inc. to minimize its price
levels. This strategic objective impacts Amazon’s marketing mix. The low prices are significant
in attracting consumers. Thus, through the generic strategy of cost leadership, competitive
advantage is gained to support the fulfillment of Amazon.com Inc.’s mission statement and
vision statement, especially with regard to online retail global growth and leadership.

Amazon.com’s Intensive Strategies (Intensive Growth

Strategies)
Market Development. Amazon uses market development as its current primary intensive
growth strategy. Entry and growth in new markets is the main objective in this intensive strategy.
Amazon.com Inc. adds new countries where it offers its services. For example, the company
initially provided its online retail services to consumers in the United States. Amazon now
operates e-commerce websites in more than 10 countries, including Canada, the United
Kingdom, China and India. Each new country is considered a new market that creates growth
opportunities for the firm. Amazon’s generic strategy builds competitive advantage that allows
the company to implement this intensive strategy of market development. A strategic objective
related to this intensive growth strategy is for Amazon.com to establish new online retail
websites that correspond to new countries added to the company’s global market reach.

Market Penetration. Market penetration is a secondary intensive growth strategy in Amazon’s

online retail business. The objective of this intensive strategy is to generate more revenues from
the markets where the company currently operates. Amazon.com grows with increasing
consumerism. For example, as consumers develop increasing interest in online retail, the
company benefits from higher sales revenues, especially when considering the popularity of the
Amazon brand. Market penetration is responsible for the initial rapid growth of Amazon.com
Inc. in the United States. The company’s generic strategy creates the competitive advantage
necessary to penetrate markets based on low costs and prices. A strategic objective based on this
intensive growth strategy is to implement an aggressive marketing campaign to attract more
consumers to Amazon’s e-commerce website.

Product Development. Amazon.com Inc. applies product development as a supporting intensive

strategy for business growth. Developing and offering new products to gain higher revenues is
the goal of this intensive growth strategy. Amazon grows partly by developing new products
over time. For example, the company now offers AmazonBasics products and Amazon Web
Services (AWS). The company’s cost leadership generic strategy supports this intensive strategy
by providing the company with low-cost business processes to introduce new products. A
strategic objective related to this intensive growth strategy is to increase research and
development (R&D) investment for rapid product development and release to the online retail
market.

Diversification. Diversification is the least significant among Amazon’s intensive growth

strategies. Growth based on new business is the objective in applying this intensive strategy. For
example, Amazon grew through its acquisition of Audible, which is a producer of audiobooks
and related products. In this regard, the company partly uses acquisition to implement this
intensive growth strategy. Amazon.com Inc.’s cost leadership generic strategy enables the
organization to grow in diversification by applying the same approaches to minimize operating
costs and selling prices. A strategic objective associated with this intensive strategy is to grow
the e-commerce business through an aggressive acquisition strategy.

Amazon.com’s Corporate Vision Statement

Amazon’s corporate vision is “to be Earth’s most customer-centric company, where customers
can find and discover anything they might want to buy online.” This vision statement
underscores the business organization’s main aim of becoming the best e-commerce company in
the world. In this regard, the following characteristics are identifiable in Amazon’s corporate
vision statement:

1. Global reach
2. Customer-centric approach
3. Widest selection of products

The “global reach” component of Amazon.com Inc.’s vision statement is all about international
leadership in the e-commerce market. For example, in stating the “Earth” as the market, the
company shows that it aims to continue expanding globally. Thus, a corresponding strategic
objective is global expansion, especially through market penetration and market development,
which are included in Amazon.com Inc.’s generic strategy and intensive growth strategies. The
customer-centric approach in Amazon’s corporate vision statement shows that the company
considers customers as among the most important stakeholders in the online retail business. This
consideration agrees with Amazon.com Inc.’s corporate social responsibility strategy for its
stakeholders. Moreover, the corporate vision indicates continuing efforts to broaden the product
mix. These efforts contribute to business growth and to making the company’s services more
attractive to target consumers.
Amazon.com’s Corporate Mission Statement
Amazon’s mission statement is “We strive to offer our customers the lowest possible prices, the
best available selection, and the utmost convenience.” This corporate mission promises
attractive e-commerce services to satisfy target customers’ needs. The company focuses on the
variables of price, selection, and convenience. In this regard, the following characteristics are
identifiable in Amazon’s corporate mission statement:

1. Lowest prices
2. Best selection
3. Utmost convenience

The “lowest prices” component of the mission statement guides the pricing strategies included in
Amazon.com Inc.’s marketing mix or 4P. Low prices are a selling point that makes the
company’s e-commerce website and services attractive. A corresponding strategic objective is to
reduce operational costs to enable the business to minimize prices. Amazon’s corporate mission
statement also points to having the best selection. For example, the wide array of products on the
company’s website is a factor that attracts customers. Moreover, Amazon.com Inc.’s corporate
mission emphasizes convenience, such as in accessing the company’s products via the Internet.
This characteristic is a response to consumers’ use of “convenience” as a criterion when
evaluating the quality and attractiveness of online retail services.

Amazon.com’s Corporate Vision and Corporate Mission –

Recommendations
Amazon.com’s mission statement satisfies many of the conventional characteristics of ideal
mission statements. For example, the company includes target customers and market, variety of
products, and basic business aims (pricing and convenience) in the corporate mission. However,
the company does not include technology and the nature of the business and its operations. In
this regard, it is recommended that Amazon add details in its corporate mission to give
employees and investors a better idea of what the company is all about. This recommendation
should make the corporate mission statement more comprehensive, especially in representing the
company’s businesses, such as e-commerce, cloud-based computing services, digital content
delivery, software and hardware, and brick-and-mortar retail (Amazon Books).

Amazon.com’s vision statement possesses strong characteristics, such as the specification of the
company’s target market and an aspect of its marketing mix. However, this corporate vision
satisfies only some of the conventional characteristics of ideal vision statements. For example,
Amazon’s corporate vision is concise, clear, and abstract enough to ensure suitability in various
areas of the business. Still, this corporate vision is not stable enough to ensure its suitability in
the future of the business. For instance, Amazon’s business now includes cloud services and
brick-and-mortar bookstores. Yet, the company’s vision statement still focuses on e-commerce.
Thus, it is recommended that Amazon improve its corporate vision statement by adding these
details about such businesses to make the statement comprehensive in reflecting the future state
of the corporation.

PESTEL/PESTLE Analysis,
Recommendations
An Amazon Kindle. A PESTEL/PESTLE analysis of Amazon.com Inc. shows opportunities for
global expansion of the online retail business. (Photo: Public Domain)

Amazon.com Inc. effectively covers the issues shown in the PESTEL/PESTLE analysis of its e-
commerce business and remote or macro-environment. The PESTEL/PESTLE Analysis model is
a tool for identifying the external factors that shape the conditions of a company’s remote or
macro-environment. In the case of Amazon, the conditions of the online retail market are
considered. As the largest firm in the market, the company enjoys the benefits of high revenues
and a popular set of online services. However, the online retail market is dynamic, creating new
challenges for Amazon over time. It is essential for the company to maintain resilience and
competence in addressing such challenges. Through a tool like the PESTEL/PESTLE Analysis
model, Amazon can identify the most significant opportunities and threats based on external
factors in its remote or macro-environment.

A PESTEL/PESTLE analysis of Amazon.com Inc. reveals the significance of online retail

expansion in developing markets to support global business growth. Also, it is essential to ensure
security and integrity of Amazon’s information technology assets to optimize
customer experience.
Political Factors Affecting Amazon’s E-Commerce Business
Amazon.com Inc. operates alongside political influence. This aspect of the PESTEL/PESTLE
Analysis model focuses on governmental activity and effects on businesses and their remote or
macro-environment. In Amazon’s case, the following political external factors are important in
the development of the e-commerce industry:

1. Political stability of developed countries (opportunity)

2. Governmental support for e-commerce (opportunity & threat)
3. Increasing governmental efforts on cyber-security (opportunity)

Amazon benefits from political stability. This condition creates an opportunity for the company
to expand or diversify its business in developed countries. For example, Amazon could expand
its brick-and-mortar bookstore operations in the United States to complement its e-commerce
business. On the other hand, overall governmental support for e-commerce is also an
opportunity. Amazon could continue expanding in markets with such governmental support.
However, this external factor also threatens the company because of rising competition. For
example, with governmental support, Chinese online retail firms are expanding their operations.
Nonetheless, governments present improved business conditions through efforts in fighting
cybercrime. This aspect of the PESTEL/PESTLE analysis of Amazon shows major opportunities
that the company should exploit to increase its resilience in the remote or macro-environment of
the e-commerce industry.

Economic Factors Important to Amazon.com Inc.

Amazon’s performance depends on the situation of the economies where it operates its online
retail business. The effects of economic trends and changes on the remote or macro-environment
are considered in this aspect of the PESTEL/PESTLE Analysis model. In the case of
Amazon.com Inc., the following economic external factors are significant:

1. Economic stability of most developed markets (opportunity)

2. Increasing disposable income in developing countries (opportunity)
3. Potential economic recession of China (threat)

The economic stability of most developed countries increases the likelihood of success for
Amazon.com Inc. in these markets. Such a condition minimizes economic issues in the remote or
macro-environment, thereby minimizing risks to the company’s online retail business expansion.
Amazon has other growth opportunities in developing countries. For example, the increasing
disposable income in developing markets could boost the company’s financial performance.
However, the potential economic recession of China threatens Amazon’s business. The Chinese
market is one of the biggest markets that the company hopes to increasingly penetrate. Based on
the external factors in this aspect of the PESTEL/PESTLE analysis of Amazon.com Inc.,
opportunities for growth in developing countries must be included in strategy formulation.
Social/Sociocultural Factors Influencing Amazon
Social conditions determine Amazon.com Inc.’s performance as a leading online retailer. This
aspect of the PESTEL/PESTLE Analysis model identifies the impact of sociocultural changes or
trends on the firm’s remote or macro-environment. Amazon must consider the following
sociocultural external factors:

1. Increasing wealth disparity (threat)

2. Increasing consumerism in developing countries (opportunity)
3. Increasing online buying habits (opportunity)

The increasing wealth disparity refers to the increasing gap between the rich and the poor in
many countries. This condition threatens Amazon.com Inc. in terms of the potential stagnation of
disposable income levels and the corresponding stagnation of the remote or macro-environment
of online retail business. A higher disposal income level is more favorable in increasing potential
revenues of the e-commerce company. Nonetheless, an increasing degree of consumerism
creates opportunities for Amazon. For example, higher consumerism in developing markets
increases Amazon’s growth potential as the company looks to expand its global online retail
operations in these locations. In relation, the company stands to benefit from increasing online
buying habits, as more people around the world gain access to the Internet. The external factors
in this aspect of the PESTEL/PESTLE analysis of Amazon indicate the benefits of focusing on
market penetration and expansion in developing countries.

Technological Factors in Amazon’s Business

Technological advancement directly affects Amazon, considering the centrality of technology in
its e-commerce business. The consequences of technologies and related trends on the remote or
macro-environment are covered in this aspect of the PESTEL/PESTLE Analysis model. The
technological external factors important in Amazon.com Inc.’s business are as follows:

1. Rapid technological obsolescence (threat & opportunity)

2. Increasing IT efficiency (opportunity)
3. Increasing cybercrime (threat)

Amazon.com Inc. faces the threat of rapid technological obsolescence, which imposes pressure
on the company to continuously develop its technological assets. However, this condition is also
an opportunity in optimizing the business. For example, the firm’s continued heavy investment
in information technology could boost its competitive advantage and protect its business from
new entrants in the e-commerce industry. Amazon also has opportunities to further improve its
performance based on the rapid increase of IT efficiency. For instance, new technologies can
maximize online retail productivity and minimize operational costs. However, the company also
faces the constant threat of cybercrime. This external factor threatens consumer experience as
well as the integrity of Amazon’s business. Thus, significant investment in appropriate
technological measures is critical to the company’s long-term survival despite technology-related
issues in the firm’s remote or macro-environment. Based on this aspect of the PESTEL/PESTLE
Analysis, Amazon needs to emphasize continuous improvement of its technologies.

Ecological/Environmental Factors
Even though Amazon.com Inc. is mainly an online retail business, its operations are subject to
the influence of the conditions of the natural environment. This aspect of the PESTEL/PESTLE
Analysis model presents how the company’s remote or macro-environment relates with
ecological changes. Amazon considers the following ecological external factors in its strategic
formulation:

1. Rising interest in environmental programs (opportunity)

2. Rising emphasis on business sustainability (opportunity)
3. Increasing popularity of low-carbon lifestyles (opportunity)

Amazon has opportunities to improve its environmental impact in response to the rising interest
in environmental programs. For example, based on this external factor, an improvement in
Amazon’s corporate social responsibility strategy could significantly contribute to satisfying
such interest. In relation, there are major opportunities in business sustainability. For instance,
the company could implement higher sustainability standards to further enhance its strong brand
image as an e-commerce organization [Read: SWOT Analysis of Amazon]. Moreover, the
increasing popularity of low-carbon lifestyles provides opportunities for Amazon.com Inc. to
boost its corporate image. The company could implement extensive energy-saving policies in its
operations for this purpose. This aspect of the PESTEL/PESTLE analysis of Amazon shows the
significance of a comprehensive corporate social responsibility strategy to increase the
company’s competence in its remote or macro-environment.

Legal Factors
Amazon.com Inc.’s e-commerce operations must adhere to legal requirements. The effects of
regulations on the remote or macro-environment are determined in this aspect of the
PESTEL/PESTLE Analysis model. In Amazon’s case, the following legal external factors are
significant:

1. Rising product regulation (opportunity)

2. Easing of import and export regulations (opportunity)
3. Rising environmental protection regulations (opportunity)

Rising product regulation is seen as a result of societal demands on business organizations. This
external factor creates opportunities for Amazon.com Inc. to intensify its efforts in reducing
counterfeit sale on its online retail website. Also, the company has opportunities to grow, based
on the external factor of easing import and export regulations. For example, Amazon can expand
its global operations to exploit the increasing ability of sellers to access overseas supplies.
Moreover, the company has opportunities to strengthen its brand image through appropriate
corporate social responsibility policies that address rising environmental protection regulations.
Such effort can increase business competitiveness in the remote or macro-environment. Based on
this aspect of the PESTEL/PESTLE Analysis model, Amazon can ensure long-term e-commerce
success through regulatory compliance.

Amazon’s PESTEL/PESTLE Analysis – Recommendations

Amazon.com Inc. remains the top player in the online retail market. The company has shown
resilience despite increasing competition with companies like Walmart [Read: PESTEL/PESTLE
Analysis of Walmart]. This PESTEL/PESTLE Analysis of Amazon identifies key issues that are
critical to the company’s long-term success. A recommendation is for the company to expand its
operations in developing markets, which present rapid economic development and high e-
commerce growth potential. Also, the company must address IT security issues by continuing
and enhancing its current strategies for IT security and integrity. Such issues affect consumer
confidence and the stability of the firm’s remote or macro-environment. In addition, based on the
external factors in this PESTEL/PESTLE analysis, it is recommended that Amazon must boost
its brand strength through a corporate social responsibility strategy that addresses current issues
linking business and the natural environment.

Marketing strategy of Amazon – Amazon

marketing strategy

Segmentation, targeting, positioning in the Marketing

strategy of Amazon
E-commerce giants like Amazon uses demographic &
psychographic segmentation to segment the markets. Amazon’s
segmentation is based on actual purchase behaviour: not what
people might have expressed interest in, but what they actually
did. Amazon’s micro-level segmentation targets each customer
individually, allowing the company to convert visitors into long-
term, high-value customers.
E-commerce segmentation often involves creating personas who
will buy in a certain way & certain products. Similarly Amazon
targets the middle class & upper class people who have got
hands on experience in the basic technology but don’t have time
or prefer convenience over shopping from the physical outlets.
Amazon has successfully positioned itself as a Glocal (Go
global Act local) e-commerce giant where one can buy anything
& get it delivered at any remote locations. Using the catchphrase
#AurDikhao in its most recent campaign in India, it has further
helped them carve a distinct space in the consumer’s mind.

Marketing mix
Amazon.com Inc.’s Products (Product Mix)
In this component of the marketing mix, Amazon’s products or product mix is considered. As the
top player in the online retail industry, the company offers a wide selection of products. Such a
product mix supports Amazon.com Inc.’s mission statement and vision statement. Through
continued expansion and diversification, the company’s products now include not just online
retail, but also a variety of other products that address market needs:

1. Retail service
2. Retail goods
3. Amazon Prime
4. Consumer electronics
5. Digital content distribution service
6. Amazon Video
7. Amazon Web Services (AWS)
8. Amazon Publishing
9. AmazonFresh
10. Amazon Prime Pantry
11. Amazon Dash
12. Video Direct

Amazon is primarily an online retail business. As such, its main product is retail service. The
company provides such service through its e-commerce website. Some of the retail goods
available on the website are also the company’s, such as those sold under the AmazonBasics
brand. In addition, the firm offers Amazon Prime, which is a membership product that includes
shipping service for purchases on Amazon’s online retail website. The company has also
expanded its product mix to include consumer electronics like the Amazon Kindle e-book reader
and the Kindle Fire tablet. Such expansion led to an improvement of the effectiveness of the
company’s marketing mix in getting a bigger share of the e-commerce market. Further
broadening of the firm’s product mix involved the distribution of digital content, including music
and e-books. Amazon Video is an on-demand video streaming service offered to customers in
some locations in the United States, Europe and Japan. On the other hand, Amazon Web
Services (AWS) is a set of online services, including cloud storage. Amazon Publishing offers
book-publishing service using a number of imprints. Moreover, AmazonFresh and Amazon
Prime Pantry are the company’s services for orders and delivery of grocery items. Furthermore,
the company has integrated additional technology in the purchasing process. For example,
Amazon Dash involves a device that enables customers to purchase household items by simply
clicking a button that connects to the Internet. Video Direct enables sale or ad-supported free
viewing of user-generated videos. These product lines indicate the company’s efforts in
continually broadening its product mix. Amazon.com Inc.’s marketing mix increases in
effectiveness as more products are added to these e-commerce offerings.

Place/Distribution in Amazon’s Marketing Mix

The venues used to reach target customers are identified in this component of the marketing mix.
Amazon.com Inc. is a mainly online business organization. Nonetheless, the company uses the
following places to reach its e-commerce customers:

1. Official e-commerce websites

2. Amazon Books
3. Others

Amazon uses its official e-commerce websites as its primary places for transacting with
customers. These websites include Amazon.com, Audible.com (a subsidiary), and a number of
other sites with specific target markets. In addition, the company operates a physical bookstore
named Amazon Books in Seattle. This location enables the company to reach out to customers
who want to physically evaluate products before purchase. Moreover, the firm uses other venues
to temporarily transact with customers. For example, the annual Amazon Web Services (AWS)
Summit held in various locations enable the company to reach potential customers and persuade
them to pay for its e-commerce services. In this regard, Amazon’s marketing mix significantly
relies on the strong online presence of the organization in reaching its target customers.

Amazon’s Promotion (Promotional Mix)

This component of the marketing mix involves the strategies and tactics that a company uses to
communicate with its target market. Amazon.com Inc. aims to persuade its customers to visit its
websites and pay for its online services. The following strategies and tactics are used in such
promotional mix, arranged according to importance in the company’s e-commerce business:

1. Advertising (most important)

2. Sales promotions
3. Public relations
4. Direct marketing
Advertising functions as the primary means for Amazon to communicate with its target market.
For example, the company has an affiliate program for website owners or online publishers to
earn revenues by displaying advertisements and corresponding links to products sold on the
Amazon.com website. This strategy widens the company’s market reach. Also, Amazon.com
Inc. applies sales promotion as a secondary strategy to attract customers and persuade them to
purchase goods and services on the website. For example, the company occasionally uses
discounts and special offers to generate more sales. On the other hand, the firm strengthens its
brand image through public relations programs, such as Amazon Smile, which donates a
percentage of sales to charitable organizations. These programs enhance consumer perception
about the corporation [Read: Amazon’s Stakeholders & Corporate Social Responsibility
Strategy]. Moreover, in using direct marketing, the company directly communicates with
businesses to offer its online services, such as publishing and digital content distribution. In this
component of Amazon.com Inc.’s marketing mix, advertising is the main determinant of the
organization’s marketing communication effectiveness.

Amazon’s Prices and Pricing Strategies

This component of the marketing mix focuses on the price levels and pricing strategies a firm
uses in selling its products. Amazon.com Inc. uses low prices as a way of attracting customers to
its e-commerce website and product offerings. Nonetheless, given the variety of the company’s
products, the following pricing strategies are used:

1. Market-oriented pricing strategy

2. Price discrimination strategy
3. Value-based pricing strategy

Amazon uses market-oriented pricing as its primary pricing strategy. For example, the company
evaluates competitors’ prices as basis for pricing AmazonBasics products. The advantage of this
pricing strategy is that it makes selling prices more competitive, affordable and attractive to
target consumers. On the other hand, the price discrimination strategy involves setting different
prices for the same product. Amazon applies this pricing strategy through its different websites.
For instance, the company’s prices for the same products are different between the United States
and the United Kingdom, which has its own Amazon website (amazon.co.uk). This strategy is
advantageous because it enables the company to adjust its prices based on national market
conditions, perceived value of products, and consumer preferences and expectations. In relation,
Amazon.com Inc. uses the value-based pricing strategy, which involves price levels based on
product value, considering consumers’ perception of value. Thus, the company’s marketing mix
reflects flexibility in adjusting to current market prices.
 SWOT analysis
*Strengths in the SWOT analysis of Amazon
1. Strong background and deep pockets – Built on its early successes with books,
Amazon now has product categories that include electronics, toys, games, home and
kitchen, white goods, brown goods and much more. Amazon has evolved as a global E-
commerce giant in the last 2 decades.
2. Customer centric: Company’s robust CRM has created customer centric processes in
order to carefully record data on customer’s buying behavior. This enables them to offer
individual items, related items or bundle them as an offer, based upon preferences
demonstrated through purchases or items visited. Also, the company claims that 55% of
their customers are repeat buyers resulting in low cost of acquisition of new buyers.
3. Cost leadership: In order to differentiate itself, company has created several strategic
alliances with other companies to offer superior customer service. The most important
strategic tie ups are with logistics providers who control costs. This contributes in a
strong Value chain. Because of playing on economies of scale, Amazon is able to lower
the inventory replenishment time.
4. Efficient delivery network: With its strategic partners & due to its Amazon fulfilment
centers, Amazon has created a deep & structured distribution network in order to make
the product available even at remote locations. It also has free of cost delivery charges in
certain geographies.
5. GLOCAL strategy: By using the strategy of “Go global & act local”, Amazon is able to
fight with domestic E-commerce companies through absorbing & by forming / partnering
with supply chain companies. The branding too is done as per local taste. For example –
In India, Amazon is currently using the “Aur Dikhao” campaign to encourage users to
browse more of their products.
6. Acquisitions: Acquiring companies like Zappos.com, Junglee.com, IMBD.com,
woot.com etc. has proven to be a successful and revenue generating step for the E
commerce giant.

**Amazon’s Strengths (Internal Strategic Factors)

Amazon.com Inc.’s e-commerce success relies on its notable strengths. In the SWOT Analysis
model, this aspect enumerates the internal strategic factors that the company uses to grow its
business. The following strengths support the success and ongoing growth of Amazon:

1. Strong brand
2. Extensive product mix
3. Highest revenues in the industry

Amazon.com Inc. has the strongest brand in the online retail market. This strength is partly
responsible for the rapid growth of the business in its early years. Also, an extensive product mix
makes it easy for customers to find what they need or want on the company’s website, fulfilling
Amazon’s vision statement and mission statement. This strength supports service attractiveness,
which is crucial in maintaining the firm’s success. In addition, having the highest revenues in the
industry is one of Amazon’s strengths. For example, it enables the company to invest in new
business ventures or in new product development. This aspect of the SWOT Analysis shows that
Amazon.com Inc. has the strengths necessary to maintain its e-commerce market position.

Weaknesses in the SWOT analysis of Amazon

1. Shrinking margins: Due to extensive delivery network & price wars Amazons margins
are shrinking, which is resulting in even losses. In India, Amazon had a loss of $359 crs
in the year 2013-14.
2. Tax Avoidance issue: Amazon has attracted negative publicity on account of Tax
Avoidance in countries like U.S & UK. Most of its revenue is generated from these well
established markets.
3. High Debt: In many developing nations Amazon is still struggling to make the business
profitable thereby affecting the overall profitability of the group resulting into High debt.
4. Product flops – Amazon launched the fire phone in the US which was a big flop. At the
same time, Kindle fire did not pick up as strongly as Kindle did. Thus, there were several
product flops which caused a dent in Amazon’s deep pockets.

Amazon’s Weaknesses (Internal Strategic Factors)

Amazon’s weaknesses present challenges that limit its e-commerce business. This aspect of the
SWOT Analysis model outlines the internal strategic factors that impose difficulties in growing
the business. In the case of Amazon, the following weaknesses are most significant:

1. Easily imitable business model

2. Limited penetration in developing markets
3. Limited brick-and-mortar presence

Amazon.com Inc. has a business model that others can easily imitate. For example, other firms
could easily establish an online retail website that sells just about anything. Also, Amazon
generates most of its revenues from developed countries, such as the United States. When other
firms become fully established in developing markets, it would be difficult for Amazon to
penetrate and compete in such markets. The company’s limited brick-and-mortar presence also
limits the ability to attract customers to certain product types that are more sellable in physical
stores than in online stores. Based on this aspect of the SWOT Analysis, Amazon.com Inc. must
strategically maintain online and offline competitive advantage to overcome the negative effects
of its weaknesses.
Opportunities in the SWOT analysis of Amazon
1. Backward Integration: Amazon can come up with its In-house brands in different
product categories. They can also differentiate their offering. This will help them make
profits in highly competitive E-commerce market.
2. Global Expansion: Expansion mainly in Asian & developing economies will help
Amazon because those are the markets with low competition in E-commerce industries &
are not saturated like developed economies.
3. Acquisitions: By acquiring E-commerce companies it can decrease the competition level
& also can use the specialized capacity of the other company.
4. Opening physical stores outside U.S: By doing this Amazon can help the customers to
engage with the brand, resulting in increase in repeat purchases & increase in loyal
customer base.

Opportunities for Amazon.com Inc. (External Strategic

Factors)
There are a variety of opportunities available to Amazon.com Inc. In the SWOT Analysis model,
this aspect identifies the external strategic factors that the firm could use to grow its business.
Amazon has the following opportunities related to the e-commerce market:

1. Penetrate developing markets

2. Expand brick-and-mortar business
3. Boost measures to reduce counterfeit sales

Amazon has the opportunity to penetrate developing markets. This move should establish the
company’s presence before other large online retail firms take root, thereby giving Amazon the
advantage of a stronger competitive edge. The company also has the opportunity to open more
brick-and-mortar stores to improve competitiveness against large retailers with significant brick-
and-mortar presence, such as Walmart [Read: SWOT Analysis of Walmart]. Moreover, one of
the issues facing Amazon.com Inc.’s e-commerce website is the continuing sale of counterfeit
items, which are generally against customer expectations. This condition presents an opportunity
for the company to improve its technological measures and organizational policies to address
counterfeit sales. For example, an automated process for consumer reports and product
evaluation could help reduce the amount of counterfeit products sold on the website. In this
aspect of the SWOT Analysis, Amazon has major opportunities for growth.

Threats in the SWOT analysis of Amazon

1. Low entry barriers of the industry: Low entry barriers affect the current player’s
business as more & more company means tough competition, price wars, shrinking
margins & losses resulting into questioning the sustainability of the players.
 2. Government regulations: Not having clarity on the issues related to FDI in multi brand
retail, has been a big hurdle in the success of the E-commerce players in many
developing nations.
3. Local competition – India has snapdeal and Flipkart who are local E commerce retailers
and are taking away majority of the market. Similarly, there are many local players who
take bites from the market share thereby making it hard for a big player like Amazon to
make profits.

Threats Facing Amazon.com Inc. (External Strategic

Factors)
Amazon faces a number of significant threats in the online retail market. External strategic
factors that reduce business performance are considered in this aspect of the SWOT Analysis
model. Amazon.com Inc. must address the following threats in the online retail industry
environment:

1. Cybercrime
2. Imitation
3. Aggressive competition with large retail firms

Cybercrime threatens practically every online retail company. Amazon must keep stringent
measures to counteract cybercrime attacks against its online operations. For example, the
company must intensify its network security efforts. Also, Amazon.com Inc. faces the issue of
imitation, considering that its business model is easily imitable. The materialization of this threat
could reduce the company’s market share. Moreover, aggressive competition is an issue against
Amazon. Large retail firms, such as Walmart, are continuing their efforts in improving their
online retail presence. Thus, based on this aspect of the SWOT Analysis, Amazon.com Inc.
needs to strengthen its marketing efforts and competitiveness.

Amazon.com Inc.’s SWOT Analysis – Recommendations

Amazon.com Inc. has the necessary strengths to continue its e-commerce dominance. However,
the company faces a variety of concerns. For instance, Amazon has limited presence in
developing markets. It is recommended that the company must increase its strategic entry into
developing countries, which present major growth opportunities based on rapid economic
development. Also, to address the issue of competition against retail firms like Walmart,
Amazon must consider increasing its brick-and-mortar stores, which help increase market reach
and brand popularity. Another recommendation is for Amazon to address counterfeiting and
cybercrime through intensified information technology measures for organizational and
consumer security and protection.
Competitive advantage in the Marketing
strategy of Amazon
In order to differentiate itself, company acquired many IT & e-
commerce start-ups like pets.com, audible.com, Junglee.com,
IMBD.com, Zappos.com, Woot etc. which helped them in providing
high value to their customers using existing technology of the
acquired partners at low cost. Amazon has also achieved economies of
scale through extensive product offerings which include electronics, toys
and games, apparels, DIY and many more.

These offerings help Amazon to keep its prices low thereon passing on
the benefits to the consumers. Amazon’s robust customer centric
approach to analyse the customer buying behaviour based upon
preferences has helped them to have competitive edge over their
competitors. More than 50% of the consumers are the repeat buyers at
Amazon.com. Further more, Amazon is one of the longest players to be
present in the online sector and has a solid hold in European countries
and US. This bottom line is helping the company to expand in new
markets.

BCG Matrix in the Marketing strategy of

Amazon
On BCG matrix Amazon have certain businesses which are cash cows while others are stars &
question marks.

E-books, movies on demand & Amazon prime are practically cash cows giving the maximum
margins to Amazon. In fact, Amazon was a book store before it started electronics.

Kindle, VOD (Video on demand) & Amazon web services are question marks because with the
advent of technology these services have become obsolete & have low demand.

Electronics and other consumer durable products are stars for Amazon because these products
have high growth rate but the market share of Amazon is also high for these products.
Amazon.com Inc. Five Forces Analysis &
Recommendations (Porter’s Model)
Updated on Updated on February 20, 2017 by Roberta Greenspan
An Amazon delivery box. A Five Forces Analysis (Porter’s model) of Amazon.com Inc. shows
external factors that highlight competition, consumers and substitutes as strong forces in the
online retail industry environment. (Photo: Public Domain)

Amazon.com Inc. continues to lead the online retail market as a result of integrating the issues
identified in this Five Forces Analysis into the firm’s strategies. Michael Porter developed the
Five Forces Analysis model as a tool for the external analysis of firms. In the case of Amazon,
the external factors define the conditions of the e-commerce industry environment, with focus on
the online retail market. The company remains the biggest player in this market. To keep this
position in the long term, Amazon must regularly evaluate the external factors in the online retail
industry environment, such as through the use of tools like the Five Forces Analysis model.

Amazon.com Inc. enjoys the top position in the online retail market. Nonetheless, external
factors identified in its Five Forces Analysis must be considered and included in Amazon’s
strategic formulation.

Overview: Amazon’s Five Forces Analysis

Amazon.com Inc. competes against a variety of firms, including smaller online retail stores and
large firms like Walmart [Read: Five Forces Analysis of Walmart]. The global scope of the e-
commerce business also exposes Amazon to a diverse set of external forces. Thus, the company
must ensure that it remains resilient amid changes in the conditions of the online retail industry
environment. The following are the intensities of the external factors affecting Amazon, based on
Porter’s Five Forces Analysis model:

1. Competitive rivalry or competition (strong force)

2. Bargaining power of buyers or customers (strong force)
3. Bargaining power of suppliers (moderate force)
4. Threat of substitutes or substitution (strong force)
5. Threat of new entrants or new entry (weak force)

Recommendations. Amazon must address the major forces of competition, consumers and
substitutes, based on the Porter’s Five Forces Analysis of the business. It is recommended that
the company must address the strong force of competitive rivalry by emphasizing competitive
advantage and strengths of the e-commerce organization. For example, the company must
continue boosting its brand image, which is among the strongest in the industry. Amazon.com
Inc. can address the external factors linked to the strong force of the bargaining power of buyers
by focusing on service quality. For instance, counterfeit reduction can improve customer
experience in using Amazon’s e-commerce website. Another recommendation is for Amazon to
counteract the threat of substitution by making its service more attractive. For example, the
company must continue enhancing the usability of its website to optimize user experience. These
recommendations aim at increasing Amazon’s competitiveness and potential for long-term
success in the online retail industry environment.

Competitive Rivalry or Competition with Amazon.com Inc.

(Strong Force)
Amazon competes against strong competitors. This aspect of Porter’s Five Forces Analysis
model tackles the effects of firms on each other. In the case of Amazon.com Inc., the following
external factors are responsible for the strong intensity of competition or competitive rivalry in
the online retail industry environment:

 High aggressiveness of firms (strong force)

 High availability of substitutes (strong force)
 Low switching costs (strong force)

Retail firms are generally aggressive, and they exert a strong competitive force against each
other. For example, Amazon.com Inc. directly competes against giants like Walmart, which has a
significant and expanding e-commerce website. Amazon also experiences the strong force of
substitutes because of their high availability. For instance, Walmart’s physical or brick-and-
mortar stores are substitutes to Amazon’s online retail service. Other brick-and-mortar
bookstores and smaller retailers also compete against Amazon. Furthermore, low switching costs
impose a strong force on the company. Low switching costs correspond to low barriers for
consumers to transfer from one retailer to another, or from one company to a substitute provider.
Based on the external factors in this aspect of the Five Forces Analysis of Amazon, competition
must be a strategic priority to ensure the company’s long-term competence.

Bargaining Power of Amazon’s Customers/Buyers (Strong

Force)
Amazon.com Inc.’s vision statement and mission statement highlight the company’s customer-
centric approach to e-commerce business. This aspect of Porter’s Five Forces Analysis model
determines the influence of consumers on firms and the industry environment. The following
external factors support the strong intensity of the bargaining power of customers in affecting
Amazon:

 High quality of information (strong force)

 Low switching costs (strong force)
 High availability of substitutes (strong force)

Consumers have access to high quality information regarding the services of online retailers and
the products they sell. This external factor affects Amazon.com Inc. in terms of the ability of
customers to find alternatives to Amazon’s online retail service. In relation, the low switching
costs make it easy for consumers to transfer from Amazon to other firms, such as Walmart. Also,
the high availability of substitutes further empowers consumers to shift from one retailer to
another. For example, instead of purchasing on Amazon’s e-commerce website, a customer can
easily go to one of Walmart’s stores, which are strategically located throughout the United
States. The external factors in this aspect of the Five Forces Analysis show that Amazon must
consider the strong bargaining power of buyers as a major factor in addressing business
challenges in the online retail industry environment.

Bargaining Power of Amazon’s Suppliers (Moderate Force)

Suppliers control the availability of supplies or materials Amazon.com Inc. needs for its e-
commerce operations. The influence of suppliers on the online retail industry environment is
outlined in this aspect of Porter’s Five Forces Analysis model. Amazon experiences the moderate
intensity of the bargaining power of suppliers based on the following external factors:

 Small population of suppliers (strong force)

 Moderate forward integration (moderate force)
 Moderate size of suppliers (moderate force)

The small population empowers suppliers to impose a strong force on Amazon.com Inc.’s e-
commerce business. For example, changes in prices of equipment from a small number of large
suppliers could directly impact the company’s online retail operational costs. However, the
moderate forward integration limits suppliers’ actual effect on Amazon. Moderate forward
integration equates to a moderate degree of control that suppliers have in the sale of their
products to firms like Amazon. Moreover, the moderate size of most equipment manufacturers
limits their influence on the company. Based on this aspect of the Five Forces Analysis of
Amazon, the external factors emphasize the moderate significance of suppliers as a strategic
determinant in the online retail industry environment.

Threat of Substitutes or Substitution (Strong Force)

Amazon.com Inc. competes with substitutes in the online retail market. This aspect of Porter’s
Five Forces Analysis model identifies how substitutes affect the industry environment. In the
case of Amazon, the following external factors support the strong intensity of the threat of
substitution:

 Low switching costs (strong force)

 High availability of substitutes (strong force)
 Low cost of substitutes (strong force)

Amazon continually addresses the strong force of substitutes, which threaten the e-commerce
company’s performance. The low switching costs show that customers can easily transfer from
the company to other retailers. For example, consumers can easily decide to buy from Walmart
stores or other retail establishments instead of buying from Amazon.com Inc. The high
availability of substitutes and the low costs of their product offerings further increase the
influence of substitutes against the company. Thus, the external factors in this aspect of the Five
Forces Analysis of Amazon.com Inc. show that substitution is among the priorities in the
company’s strategies for long-term success in the online retail industry environment.

Threat of New Entrants or New Entry (Weak Force)

New firms potentially reduce Amazon’s market share in online retail. The effects of new entrants
are considered in this aspect of Porter’s Five Forces Analysis model. Amazon.com Inc.
experiences the weak intensity of the threat of new entry based on the following external factors:

 Low switching costs (strong force)

 High cost of brand development (weak force)
 High economies of scale (weak force)

Amazon’s consumers can easily transfer to new firms, thereby empowering new firms to impose
a strong force against the company. This condition is due to low switching costs, or the low
negative effects of transferring from one provider to another. However, the high cost of brand
development in online retail weakens the influence of new entrants on the performance of
Amazon. For example, it would take years and billions of dollars to create a strong brand that
directly competes with the Amazon brand. In addition, Amazon benefits from high economies of
scale that make its e-commerce business strong. As such, new entrants need to achieve similarly
high economies of scale to compete against the company. Based on the external factors in this
aspect of the Five Forces Analysis, new entrants are a minor strategic issue in Amazon’s
performance in the online retail industry environment.

Distribution strategy in the Marketing strategy of Amazon –

Amazon realizes that the most important thing that customers want is the quick delivery of
products they order. This is where Amazon’s extensive distribution system has come into
play. Amazon now has more than 55 fulfilment centres exceeding 43 million square feet.

This does not include Amazon’s new “under-the-tent” strategy of using existing vendor
warehouse space for consumer-packaged goods to more quickly serve customers. Their
aggressive strategy of infiltrating warehouses and improving their distribution lines brings
Amazon to new areas and customers.

Amazon had created a deep & structured network in order to make the product available at
remote locations that too free of cost delivery charges up to certain limit. Amazon has developed
an extensive global distribution network that continues to grow at frenzied rate.
Brand equity in the Marketing strategy of Amazon
From being merely an e-book provider to emerging as the 2ndlargest e-commerce company in the
world, Amazon.com has steadily increased its spending on advertising and promotion to make
its brand stronger and have a higher brand equity.

By April 2015, the brand of Amazon.com was worth US$ 176 billion. “A brand for a company is
like a reputation for a person. You earn reputation by trying to do hard things. With more than
55% repeat buyers, the numbers tells everything about the brand. It is among 13 world’s most
valuable brand” (Forbes list).

Competitive analysis in the Marketing strategy of Amazon

Short listing the competitors of Amazon depends on what business sector of Amazon is being
considered. Apple would be the largest competitor when considering book or content related
delivery such as books, movies, magazines, and audiobooks. The itunes store will always be a
threat to the amazon store because of Apples devices like the ipad, iphone, and Macbook. When
considering web services Google would emerge as the largest competitor.

Walmart is the biggest threat to Amazon in US as reports roll in of various attempts to compete
with the large online retailer. Reports of Walmart testing a locker system for consumers where
shoppers can order and pay online and pickup at their convenience are surfacing.

Walmart is also still testing same-day delivery in four cities and remains the fourth largest online
retailer. Walmart rakes in about $9 billion in Internet sales, which Amazon more than doubles in
a quarter. However, Amazon does not have the physical structure base that Walmart has to start
with.

In developing countries as well as in developed, there are many local portals which give tough
competition to Amazon. For example – Snapdeal, Flipkart are some of the competitors of
Amazon. Similarly, groupon, first cry (targeted towards moms) are specialised e-commerce
portals which take away traffic from Amazon. Thus, these local competitors of each country also
react strongly to Amazon’s presence.

Market analysis in the Marketing strategy of Amazon- The global E-commerce market is still in
the evolving phase. With the adaptation of technology in the developing economies customers
are now becoming more comfortable with online shopping. Fierce competition from Biggies like
Alibaba, Ebay, start-ups & local ecommerce players like Flipkart, Snapdeal is more of resulting
into overall growth of the industry which is good for the industry.
Customer analysis in the Marketing strategy of Amazon
Amazon customers consist of upper & middle class social groups who have inclination towards
using E-commerce portals and are comfortable with online shopping. Majority of the customers
are professionals or businessmen who are busy with their business/Job & find it convenient to
purchase anything online rather than visiting the physical outlet in order to save time & money.

Amazon.com Inc.’s Organizational Culture

Characteristics (An Analysis)

Amazon.com Inc. has an organizational culture that enables business capacity to respond to the
demands of the e-commerce market. A company’s organizational or corporate culture sets the
traditions and values that influence employees’ behaviors. For example, Amazon’s corporate
culture pushes employees to go beyond traditional limits and conventions to develop bright ideas
and solutions. As the world’s top-performing online retailer, the company continues to seek fresh
talent. However, to maintain a capable workforce, Amazon must reinforce its organizational
culture to shape the development of human resources for long-term competitive advantage.

Amazon’s organizational culture is seen as a critical factor in the success of the online retail
business. The corresponding cultural characteristics define the capabilities of Amazon.com
Inc.’s human resources and, in turn, the e-commerce organization.

Features of Amazon.com’s Organizational Culture

Amazon is known for a corporate culture that pushes employees to explore ideas and take risks.
This cultural condition is responsible for the company’s capacity to seek new opportunities to
utilize data-intensive processes to provide efficient online retail service. Amazon.com Inc. states,
“We’re a company of pioneers. It’s our job to make bold bets, and we get our energy from
inventing on behalf of customers. Success is measured against the possible, not the probable.
For today’s pioneers, that’s exactly why there’s no place on Earth they’d rather build than
Amazon.” This statement shows that Amazon’s organizational culture has the following
characteristics:

1. Boldness
2. Customer-centricity
3. Peculiarity
Boldness. Amazon promotes boldness among its workers. This characteristic of the corporate
culture is seen in how the company pioneered to sell a wide array of items online, initially
starting with books, through data-intensive information technology. In relation, Amazon.com
Inc.’s employees are encouraged to take risks, such as in considering new ideas to do business.
In emphasizing boldness, the company also facilitates openness toward new ideas based on an
organizational diversity policy. This feature of the organizational culture enables Amazon to
identify the best possible ideas to solve problems or improve the e-commerce business.

Customer-Centricity. Amazon.com Inc.’s vision statement highlights the centrality of

customers in its business. This factor is also included in the company’s organizational culture.
For example, Amazon reinforces workers’ focus on customers’ needs and demands. The
company continually strives to determine trends and changes in consumer preferences, and
applies these preferences in its online retail and related services. Through this characteristic of
the corporate culture, Amazon maintains its effectiveness in satisfying customers as the e-
commerce business expands.

Peculiarity. Amazon.com Inc.’s organizational culture also involves peculiarity. In particular,

this cultural characteristic refers to the idea of challenging conventions. For example, Amazon
motivates its employees to view themselves and their work as different from conventional ways
of doing business. The company believes that conventions impose limits on potential business
growth. Thus, through this feature of the corporate culture, Amazon motivates employees to
think outside the box to bring the e-commerce business to its maximum potential.

Amazon’s Organizational Culture Implications, Advantages

& Disadvantages
Amazon’s corporate culture reinforces the company’s pioneering efforts in this type of online
retail business, as espoused in the vision of CEO and founder Jeff Bezos. The firm’s cultural
characteristics have the advantage of supporting innovation. For example, boldness and
peculiarity directly promote new ideas to improve Amazon.com Inc.’s e-commerce business.
Another advantage of this organizational culture is its focus on the customer, ensuring that the
company always satisfies consumer expectations and preferences. However, a disadvantage of
Amazon’s organizational culture is that it imposes a strain on human resources, especially in
pushing employees to take a bold and peculiar non-conventional approach in doing their jobs.
 Amazon.com Inc.’s Organizational
Structure Characteristics (An Analysis)
Amazon.com Inc.’s organizational structure enables extensive control on global e-
commerce operations. An organizational or corporate structure establishes the design
and system of interactions among members of the firm. For example, Amazon’s
corporate structure determines how managers direct and influence operational activities
in various business areas. As the leading online retail business in the world,
Amazon.com must maintain an organizational structure that adequately supports its
expanding market reach. An evolving corporate structure could even benefit Amazon as
the company adds more products and gradually diversifies its business.

Amazon’s organizational structure enables managerial control. The characteristics of

this structure also provide support necessary for Amazon.com Inc.’s new product
launches in the e-commerce market.

Features of Amazon.com’s Organizational Structure

Amazon.com Inc. has a functional organizational structure. This structure focuses on
business functions as bases for determining the interactions among components of the
organization. The following characteristics are the most significant in Amazon’s
corporate structure:

1. Global function-based groups (most significant feature)

2. Global hierarchy
3. Geographic divisions

Global Function-Based Groups. Function-based groups are the strongest characteristic

of Amazon’s organizational structure. Each major business function has a dedicated
group or team, along with a senior manager. The strategic objective in having this
structural characteristic is to enable Amazon.com to facilitate successful e-commerce
operations management throughout the entire organization. Considering its ongoing
global expansion, the company grows through this feature of the corporate structure in
terms of ease of establishing operations in new markets [Read: Amazon.com Inc.’s
Generic & Intensive Growth Strategies]. The following are the major function-based
groups in Amazon’s organizational structure:

1. Office of the CEO

2. Business Development
3. Amazon Web Services (AWS)
4. Finance
5. International Consumer Business
6. Accounting
7. Consumer Business
8. Legal and Secretariat
 Global Hierarchy. Hierarchy is a traditional organizational structural characteristic. In the
case of Amazon.com Inc., such characteristic is expressed in terms of a global system
of vertical lines of command and authority that influence the online retail firm. For
example, senior managers’ directives are applied throughout the organization, affecting
all relevant offices of the company worldwide. The strategic objective of this feature of
the corporate structure is to facilitate managerial control of Amazon’s entire
organization.

Geographic Divisions. Amazon’s organizational structure also involves geographic

divisions. In this structural characteristic, groups are based on geographic regions and
related business goals. For example, Amazon.com Inc. uses geographic divisions to
make it easier to manage the e-commerce business based on economic conditions of
certain regions. The strategic objective in having this characteristic of the organizational
structure is to enable the company to address issues or concerns relevant to each
geographic region, considering differences among regional markets. Amazon has a
simple approach for this structural feature, involving the following geographic divisions
in its operations:

1. North America
2. International

Amazon.com’s Organizational Structure Implications,

Advantages & Disadvantages
Amazon’s corporate structure is effective in supporting international growth in the e-
commerce market. The company’s continuing success in expanding its business is an
indicator of the suitability of this organizational structure. An advantage of function-
based groups and hierarchy is that they enable Amazon.com Inc. to rapidly and
effectively implement managerial directives. Also, geographic divisions are
advantageous in supporting focus on online retail market concerns and related
economic conditions in certain regions, such as North America.

A disadvantage of this organizational structure is that it has limited flexibility and

responsiveness. The dominance of the global function-based groups and global
hierarchy characteristics reduces the capacity of Amazon to rapidly respond to new
issues and problems encountered in the e-commerce business. Thus, a
recommendation is for the company to consider reducing the dominance of these
structural characteristics. Amazon could also establish higher flexibility and
responsiveness by increasing the empowerment or degree of autonomy of regional or
local offices.
 Financial analysis
Income statement
https://www.stock-analysis-on.net/NASDAQ/Company/Amazoncom-Inc/Financial-
Statement/Income-Statement

Financial Position, Assets

https://www.stock-analysis-on.net/NASDAQ/Company/Amazoncom-Inc/Financial-
Statement/Assets

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