STRATEGIC

MANAGEMENT END
SEMESTER EXAM
The company have chosen is Amazon.com, Inc. they are a multinational Internet-based
company that sells books, music, movies, housewares, electronics, toys, and a variety of other
items directly or as an intermediary between other shops and Amazon.com's millions of
consumers. Its Web services division rents out data storage and processing power via the
Internet, a practise known as "cloud computing." The company has been referred to as one of
the most influential economic and cultural forces in the world, as well as the world's most
valuable brand. Overall, Amazon's goal and vision statements are quite good. Amazon works
hard every day to ensure that these statements are met, which has contributed to the
company's great success. "We seek to offer our clients the lowest possible prices, the best
available selection, and the utmost convenience," reads the company's current mission
statement, which touches on the core wants and requirements of its customer base and covers
all of its target markets.
QUESTION 1
Amazon's long-term competitive advantages are derived from the company's fundamental
skills. Long-term competitive advantages are built on the foundation of four resources or
competencies. The Amazon.com brand, for example, has a lot of value in the worldwide
market. The corporation uses this brand to attract people to its present and new items. This
kind of brand property is unusual and valuable in the market. This high level of brand
ownership is also difficult to duplicate, particularly in countries where the firm already has a
large presence. Amazon capitalises on its core expertise by arranging its company around it
and using the brand for a variety of items. The fact that Amazon has a large market
capitalization is a long-term competitive advantage. Due to its huge market value, the
corporation is one of the most valuable enterprises in the world. Amazon.com Inc. benefits
from this core skill since it allows the company to fund and engage in business development
and diversification. Furthermore, this amount of market capitalisation is unusual and difficult
to replicate for most market participants. Amazon, based on its history of acquisitions and
commercial initiatives, is well-positioned to take advantage of this competitive advantage, as
seen by its purchases of Twitch and Whole Foods Market.
Another one of amazons greatest core competencies are its partners/affiliate network.
Affiliates in the Amazon.com Associates programme are compensated for sharing links to
items sold on the company's website. The programme helps to total income while also paying
affiliates a portion of the profits. Because it is beneficial in supporting the e-commerce
industry and because its worldwide magnitude is unusual and difficult to locate, this core
capability offers Amazon with a long-term competitive advantage. The business is likewise
structured on the use of this core expertise and the expansion of the affiliate network.
Amazon.com Inc.'s artificial intelligence skills are another core competency and source of
long-term competitive advantage. The company's AI capabilities, which include Alexa, help
to improve product quality and customer experience, making it an attractive platform for
customers. This situation reinforces the corporation's strategic position as a significant
technological company and worldwide market influencer.
QUESTION 2

EFE MATRIX
KEY EXTERNAL FACTORS WEIGHTS RAITING WEIGHTED
SCORE
OPPORTUNITIES
Construction of an executive community of buyers 0.03 3 0.09
Positive changes in the business model of the book 0.05 4 0.2
market
Internet taxes prohibited 0.1 3 0.3
Growth of internet users in the next 5 years especially 0.15 3 0.45
international market
E commerce expansion 0.1 3 0.3
Several product categories with high penetration of 0.12 4 0.48
retail online sales
13% jump of foreign market going online in 2003 0.05 2 0.1

THREATS

eBay, Barnes & Nobles and Wal-Mart 0.12 3 0.36

Possible rejection to online sales in international market 0.03 3 0.08

if taxes are levied
Population segment not targeted to online sales due to 0.05 2 0.1
lack of internet access in some areas
Weak economic performance of some countries 0.08 2 0.16

Increase in competition due to low barriers to entry in 0.12 3 0.36

the market
TOTAL 1 2.99

SWOT ANALYSIS
STRENGHTS
1. Amazon has a solid position and a good brand image in the market as a worldwide e-
commerce behemoth.
2. Customer-centric — Amazon serves a vast number of consumers for daily necessities
at low pricing. As a result, it has become a customer-focused brand.
3. Differentiation and Innovation - Amazon is always coming up with new and inventive
product and service concepts, such as the ambitious drone delivery service and the
 Withing’s Aura Smart Sleep System. This distinguishes the company from the
competition.
4. Cost Leadership — By selling everything online, Amazon avoids the overhead of
operating physical retail shops. Amazon effectively manages prices and reduces
inventory replenishment time because to economies of scale.
5. Largest Merchandise Selection - Amazon offers a diverse product offering that draws
online shoppers to make the majority of their purchases there rather than at other
online merchants. Amazon's Amazon.com Marketplace has sold 562.3 million goods
as of 2018.
6. A huge number of third-party merchants — Due to Amazon's enormous traffic
volume, a significant number of third-party sellers have joined the platform to offer
their own products. According to data from Amazon's Fulfilment by Amazon, there
are over 2 billion goods accessible from third-party vendors.
7. Several successful purchases - Amazon's successful acquisitions of Whole Foods,
Zappos.com, woot.com, Junglee.com, IMBD.com, and others have resulted in large
sales and profits.
8. Amazon is divided into three primary companies: Amazon Marketplace, Amazon
Web Services (AWS), and Amazon Prime. These three businesses collaborate and
support one another. They produce significant earnings and benefits for the
organisation as a whole.
WEAKNESS
1. Easily replicable business model — In today's digital age, online retail firms have
become extremely widespread. As a result, competitor companies may easily copy
Amazon's business model. A few firms are even competing with Amazon. Barnes &
Noble, eBay, Netflix, Hulu, and Oyster are just a few examples.
2. Amazon is losing margins in a few places, including India. Free delivery to clients
may be one of the factors that exposes some sectors to the danger of losing
profitability.
3. Product Fumbles and Failures — Its Fire Phone launch in the United States was a
flop, and its Kindle Fire gadget failed to gain traction.
4. Controversy Over Tax Evasion - Amazon has received poor press due to tax
avoidance in Japan, the United Kingdom, and the United States. President Trump
chastised Amazon for its social media levies.
5. Limited physical presence — Amazon owns just a few physical storefronts. This
might make it difficult to get buyers to buy items that aren't available in internet
retailers.
6. In July 2018, Vox reported scathing revelations about Amazon's treatment of
employees and working conditions. Employees have complained about poor air
conditioning, scheduled restroom breaks, and continual camera surveillance. Such
things have an impact on Amazon's market reputation.
OPPURTUNITIES
1. Amazon may be able to break into or grow its business in underdeveloped markets.
2. Amazon can increase its competitiveness versus large box retailers and engage people
with the brand by adding physical locations.
 3. To prevent counterfeit sales, Amazon has the chance to strengthen technology
safeguards and organisational rules. When Amazon offered a phoney My Critter
Catcher, it exposed an instance of counterfeit sales. The item was sold for $1 less than
it was originally.
4. Can leverage backward integration to distinguish its offers and increase profit margins
by expanding manufacturing of in-house brands such as Amazon essentials.
5. More e-commerce firm acquisitions can improve the company's market share and
minimise competition.
6. In India, electric rickshaws are being introduced. Amazon has pledged to have a
beneficial environmental impact. Amazon aims to deploy 10,000 electric rickshaws
for delivery in India by 2025, with this objective in mind.
THREATS
1. Government laws may potentially jeopardise Amazon's corporate operations in
several key nations. Cuba, Iran, North Korea, Sudan, and Syria are among the
countries that Amazon does not ship.
2. Amazon is one of three retail behemoths under investigation by the US State
Department for maintaining supplier networks and labour sources linked to human
rights violations. This puts the ecommerce behemoth at danger from a
reputational, economic, and legal standpoint.
3. The rise in cybercrime may have an impact on the company's network security
system.
4. Amazon may face stiff competition in the future from large retailers such as:
Walmart and eBay
Apple TV+, Netflix, and Disney+ are among the video streaming services
available.
FedEx is a logistics company they face competition from
Tesla, Uber, and Ford are leaders in self-driving technology.
5. Economic Recession - Amazon is not immune to the effects of a downturn in the
economy. If the economy continues to deteriorate, Amazon's sales may suffer.
6. Fake reviews abound on Amazon, and the problem has only become worse in
recent months as a result of the epidemic. Customers rely extensively on product
reviews to making purchases since they are a vital indicator of quality and
authenticity.
QUESTION 3
The market amazon is served by is the e commerce market. E-commerce or electronic
commerce is the buying and selling of goods and services, or the transmitting of funds or
data, over an electronic network, primarily the internet. These business transactions occur
either as business-to-business (B2B), business-to-consumer (B2C), consumer-to-consumer or
consumer-to-business.
Monopolies prevail in a blue ocean because of their unrivalled product/service capabilities,
value propositions, product differentiation, and comparatively inexpensive pricing attained
via economies of scale. With the Kindle, Amazon established a Blue Ocean where
competition was rendered irrelevant owing to the unrivalled value delivered at an unbeatable
price. Amazon Web Services (AWS) is a complement to Amazon's Blue Ocean Strategy, in
which competition is catching up but Amazon remains the leading Cloud Services provider.
Amazon accounts for 45 percent of overall E-Commerce market revenues, which amount
235.8 billion dollars. They shook up the retail sector, and they're still looking for ways to
shake up their own business model. Customer attention, enthusiasm for innovation,
operational excellence, and long-term thinking are stated as business values. They did away
with the requirement for actual storefronts, allowing them to work with lesser investments in
pricey square-foot real estate because they are not physically situated in major cities.
Furthermore, they are available to serve their customers 24 hours a day, seven days a week.
The most difficult aspect of e-commerce, however, is the delivery time. Going in the other
direction of the market, Amazon has been able to lower delivery times to the point where you
can now buy anything and have it delivered to your house in two days at no extra charge.
This was accomplished by Amazon Prime, a premium membership programme that began in
2005 and costs its subscribers a yearly subscription fee of US$119. According to Jeff Bezos,
they had more over 100 million subscribers on their annual investor letter in 2018. Amazon
will be able to invest over $12 billion in the supply chain as a result of these inflows. With
one-click buying, user feedback, and quick receipt verification through email, Amazon set a
new bar for consumer happiness. Amazon is more convenient and easier to use than Alibaba
which was their closest competition. Furthermore, the items are imported from China, which
takes longer to reach the United States. Product quantities and pricing are not clearly stated
on the website. As a result, Amazon dominates the market.