PROJECT REPORT

On
Amazon

M.Com IV Sem – Marketing Management

(Session 2020-21)

THE BHOPAL SCHOOL OF SOCIAL SCIENCES

Submitted To Submitted By

Dr. Amrita Sahu Arpita Shrivastava

Associate Professor Roll No.-19103011

Department of Commerce
 CERTIFICATE FROM THE PROJECT GUIDE

This is to certify that the Project Report titled “Business Analysis of Amazon ” is a bonafide work
of Arpita Shrivastava enrolment number R170911050024 undertaken for the partial fulfillment of
Masters in Commerce (M. Com) degree of Barkatullah University under my guidance. This project
work is original and has not been submitted earlier for the award of any degree or diploma of any
other University or Institution.

Signature of the Guide

Dr. Amrita Sahu

Associate Professor

Department of Commerce,

BSSS, Bhopal
 DECLARATION

I ARPITA SHRIVASTAVA son of Anand Kishore Shrivastava certify that the project report
entitled on “Business Analysis of Amazon”, Business analysis report on Amazon, prepared by me
is my personal and is authentic work under the guidance of Dr. Amrita Sahu, Associate
Professor, Department of Commerce.

Date: 15/06/2021 Signature of the Student

Place: BHOPAL Name: Arpita Shrivastava

Class: M.COM (IV SEMESTER)

Roll Number: 19103011

 INDEX

❖ Introduction
▪ History
▪ Branches
▪ Products and Services
❖ Objective of Analysis
❖ Problems
❖ Analysis
❖ Suggestions
❖ Conclusion
❖ References
INTRODUCTION
Amazon is an American multinational technology company which focuses on e-commerce, cloud
computing, digital streaming, and artificial intelligence. It is one of the Big Five companies in the
U.S. information technology industry, along with Google, Apple, Microsoft, and Facebook. 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.

Amazon is known for its disruption of well-established industries through technological

innovation and mass scale. It is the world's largest online marketplace, AI assistant provider, live-
streaming platform and cloud computing platform as measured by revenue and market
capitalization. Amazon is the largest Internet company by revenue in the world. It is the
second largest private employer in the United States and one of the world's most valuable
companies. As of 2020, Amazon has the highest global brand valuation.

Amazon distributes downloads and streaming of video, music, and audio books through
its Amazon Prime Video, Amazon Music, Twitch, and Audible subsidiaries. Amazon also has a
publishing arm, Amazon Publishing, film and television studio Amazon Studios, and a cloud
computing subsidiary, Amazon Web Services. It produces consumer
electronics including Kindle e-readers, Fire tablets, Fire TV, and Echo devices.
 ❖ History
Jeff Bezos founded Amazon in July 1994. He chose Seattle because of technical talent
as Microsoft is located there. In May 1997, Amazon went public. It began selling music and videos
in 1998, at which time it began operations internationally by acquiring online sellers of books
in United Kingdom and Germany. The following year, Amazon began selling items including
video games, consumer electronics, home improvement items, software, games, and toys.

In 2002, Amazon launched Amazon Web Services (AWS), which provided data on website
popularity, Internet traffic patterns and other statistics for marketers and developers. In 2006,
Amazon grew its AWS portfolio when Elastic Compute Cloud (EC2), which rents computer
processing power as well as Simple Storage Service (S3), that rents data storage via the Internet,
were made available. That same year, Amazon started Fulfillment by Amazon which managed the
inventory of individuals and small companies selling their belongings through the company
internet site. In 2012, Amazon bought Kiva Systems to automate its inventory-management
business, purchasing Whole Foods Market supermarket chain five years later in 2017.

In January 2021, Amazon invested with over $278 million by opening two new centers in Italy
(Novara and Modena) and creating over 1100 jobs.

On February 2, 2021, Amazon announced that Jeff Bezos would be stepping down as CEO and
transition to Executive Chair of Amazon's board in Q3 of 2021. Andy Jassy, who is currently CEO
of AWS, will succeed Bezos as CEO of the company.
 ❖ Branches

Amazon is an American technology company that has a multinational presence with offices and
facilities around the world. The company is based in Seattle, Washington and has over 800,000
U.S. employees. Amazon's global headquarters are in more than 40 owned and leased buildings
spread across Seattle's adjacent South Lake Union, Denny Triangle,
and Downtown neighborhoods. The company was previously headquartered in rented space
within the Pacific Medical Center, located in the city's Beacon Hill neighborhood, from 1998 to
2011. On August 21, 2019, Amazon opened its largest campus in the world
at Nanakramguda in Hyderabad, India. It is the first Amazon-owned campus located outside the
United States and features the single largest Amazon-owned building in the world. The 9.5 acre
campus houses over 15,000 employees.
 ❖ Fulfillment and warehousing:-
Amazon fulfillment centers are large facilities with hundreds of employees, sometimes thousands.
Employees are responsible for five basic tasks: unpacking and inspecting incoming goods; placing
goods in storage and recording their location; picking goods from their computer recorded
locations to make up an individual shipment; sorting and packing orders; and shipping. A computer
that records the location of goods and maps out routes for pickers plays a key role: employees
carry hand-held computers which communicate with the central computer and monitor their rate
of progress. A picker may walk 10 or more miles a day.

Below is a list of Amazon’s fulfillment centres and warehouses:-

o North America
▪ United States
▪ Canada
▪ Mexico
o Europe
▪ France
 ▪ Germany
▪ Italy
▪ Poland
▪ Slovakia
▪ Spain
▪ United Kingdom
o Asia
▪ China
▪ Japan
▪ India
▪ Singapore
o Australia
o Brazil

❖ Products and Services

Amazon's product lines available at its website include several media (books, DVDs, music
CDs, videotapes and software), apparel, baby products, consumer electronics, beauty products,
gourmet food, groceries, health and personal-care items, industrial & scientific supplies, kitchen
items, jewelry, watches, lawn and garden items, musical instruments, sporting goods, tools,
automotive items and toys & games.

Amazon has separate retail websites for some countries and also offers international shipping of
some of its products to certain other countries. In November 2020, the company started an online
delivery service dedicated to prescription drugs. The service provides discounts up to 80% for
generic drugs and up to 40% for branded drugs for Prime subscribe users.

Amazon.com has a number of products and services available, including:

• Audible
• Amazon Prime
• Amazon Web Services
• Alexa
• Amazon Pay
• Amazon Drive
• Echo
• Kindle
• Fire tablets
• Fire TV
• Prime Video
• Kindle Store
• Music
• Amazon Digital Game Zone
• Amazon Studios
• Amazon Wireless
• Amazon Academy
OBJECTIVE OF ANALYSIS
Business Analysis can be understood as a research discipline that helps you to find the business
needs and identify solutions to business problems. These solutions may include the development
of a software or system component, improvements in process, organizational changes or strategic
planning and policy development. The purpose of business analysis is to identify solutions that
meet the need for improvement.

Business analysis models are useful tools and techniques that can help you understand your
organisational environment and think more strategically about your business. Dozens of generic
techniques are available, but some come to the forefront more frequently than others do. These
include:

• SWOT (strengths, weaknesses, opportunities, threats) analysis

• PESTLE (political, economic, social, technological, legal and environmental) analysis

• scenario planning

• Porter's Five Forces framework

SWOT analysis is a planning methodology that helps organizations build a strategic plan to meet
goals, improve operations and keep the business relevant. During SWOT analysis, organizations
identify strengths, weaknesses, opportunities and threats (the four factors SWOT stands for)
pertaining to organizational growth, products and services, business objectives and market
competition.

A SWOT analysis gives you a better insight into your internal and external business environment.
However, it does not always prioritise the results, which can lead to an improper strategic action.

One way to make better use of the SWOT framework is to consider the customer's perspective
when making strategic plans and decisions. It can be done by applying importance-performance
analysis (IPA) to identify SWOT based on customer satisfaction surveys.

PROBLEMS
As we know India’s population is equivalent to 17.7% of the world’s total population and it also
ranks 2nd in the list of countries by population. In order to grow and expand its business, and give
cutthroat competition to its rivals, it becomes very essential for Amazon to attract consumers from
each and every corner of the country.

In the year 2020, lockdowns became the new normal, businesses and consumers increasingly “went
digital”, providing and purchasing more goods and services online, raising e-commerce’s share of global
retail trade from 14% in 2019 to about 17% in 2020. Changing consumer spending habits as a result
of the coronavirus pandemic contributed to the spike in e-commerce sales last year, as statewide
lockdowns and fear of contracting the virus kept consumers out of physical stores.

As all the local markets were closed for a quite long period of time, the demand for some local
products, (which were preferred to be bought by the consumers from local markets only) was also
increased. However, Amazon had already opened their doors for the local sellers, still there was
something missing to attract more consumers for buying local products.

❖ Language Barrier
Also people from every state wanted to buy local products from e-commerce sites but weren’t able
to do so because of the language barrier. The local products were made available by the sellers but
it couldn’t be found by the purchaser on the online stores. This problem has arisen because the
online store could only be used in either English or Hindi language. As India is a very diverse
country, many states in southern India speak and write in their regional languages only. There is a
large part of population in India which didn’t know at least any one of the both languages stated
above. People wanted to find products in the online stores but didn’t know that what that particular
product is named in English.

The software so far in the country is English specific. But, in order to make e-commerce reach to
the small enterprises, it needs to be available in the languages (regional) of the owners of the small
enterprises to enable them to adapt e-commerce processes in their operations. Sooner it is done,
better will be it for small enterprises to adapt e-commerce.

ANALYSIS
Analysis is a research discipline of identifying business needs and determining solutions to
business problems. Solutions often include a software-systems development component, but may
also consist of process improvements, organizational change or strategic planning and policy
development. Business analysts do not work solely on developing software systems. But work
across the organisation, solving business problems in consultation with business stakeholders.
Whilst most of the work that business analysts do today relate to software development/solutions,
this derives from the ongoing massive changes businesses all over the world are experiencing in
their attempts to digitize.

Although there are different role definitions, depending upon the organization, there does seem to
be an area of common ground where most business analysts work. The responsibilities appear to
be:

• To investigate business systems, taking a holistic view of the situation. This may include
examining elements of the organization structures and staff development issues as well as
current processes and IT systems.
• To evaluate actions to improve the operation of a business system. Again, this may require an
examination of organizational structure and staff development needs, to ensure that they are
in line with any proposed process redesign and IT system development.
• To document the business requirements for the IT system support using appropriate
documentation standards.

In line with this, the core business analyst role could be defined as an internal consultancy role that
has the responsibility for investigating business situations, identifying and evaluating options for
improving business systems, defining requirements and ensuring the effective use of information
systems in meeting the needs of the business.

Business analysis as a discipline includes requirements analysis, sometimes also called

requirements engineering. It focuses on ensuring the changes made to an organisation are aligned
with its strategic goals. These changes include changes to strategies, structures, policies, business
rules, processes, and information systems.

Focuses on understanding the needs of the business as a whole, its strategic direction, and
identifying initiatives that will allow a business to meet those strategic goals. It also includes:

• Creating and maintaining the business architecture

• Conducting feasibility studies
• Identifying new business opportunities
• Scoping and defining new business opportunities
• Preparing the business case
• Conducting the initial risk assessment

Involves planning the requirements development process, determining which requirements are
the highest priority for implementation, and managing change.

There are a number of generic business techniques that a business analyst will use when facilitating
business change.
Some of these techniques include:

• SWOT (strengths, weaknesses, opportunities, threats) analysis

• PESTLE (political, economic, social, technological, legal and environmental) analysis

• scenario planning

• Porter's Five Forces framework

SWOT analysis
SWOT analysis is one of the most popular strategic analysis models. It involves looking at the
strengths and weaknesses of your business' capabilities, and any opportunities and threats to your
business.

Once you identify these, you can assess how to:

• capitalize on your strengths

• minimize the effects of your weaknesses

• make the most of any opportunities

• reduce the impact of any threats

A SWOT analysis gives you a better insight into your internal and external business environment.
However, it does not always prioritize the results, which can lead to an improper strategic action.

One way to make better use of the SWOT framework is to consider the customer's perspective
when making strategic plans and decisions. This can be done by applying importance-
performance analysis (IPA) to identify SWOT based on customer satisfaction surveys.

In addition to SWOT, other useful techniques include:

 • PESTLE analysis - a technique for understanding the various external influences on a
business.

• Scenario planning - a technique that builds various plausible views of possible futures
for a business.

• Critical success factor analysis - a technique to identify the areas in which a business
must succeed in order to achieve its objectives.

• The Five Forces - a framework for looking at the strength of five important factors that
affect competition - potential entrants, existing competitors, buyers, suppliers and
alternative products/services. Using this model, you can build a strategy to keep ahead of
these influences.

An overview of Amazon
Amazon’s popularity is widespread around the globe. It has over 310 million active users and 100
million subscribers worldwide. Being the world’s leading online retailer, Amazon bags many
achievements, eye-popping profits, and successful launches.

Jeff Bezos laid the foundation of Amazon in 1994. Originally, the company started as an online
bookstore but soon converted to a top online retailer selling almost everything from A to Z just
like its logo says.

Amazon is the world’s leading online retailer and its success has spurred other physical, brick, and
mortar retailers to have an online presence. It is often referred to as the online equivalent of Wal-
Mart because of its reach and global footprint as well as its aggressive pricing strategies.

The darkness of COVID-19 still looming, 2020 seems a grim time for conducting a SWOT analysis
for most businesses – but not Amazon. In this Amazon SWOT analysis, we will see why 2020 has
been a challenging yet rewarding year for Amazon.
SWOT analysis is a contextual review of the strengths, weaknesses, opportunities, and threats.

Let’s discuss this online retail giant in a little depth and understand the company’s business
scenario with the help of Amazon SWOT analysis.

▪ Strength: Internal factors enabling Amazon’s growth

▪ Weaknesses: Internal factors hindering Amazon’s success
▪ Opportunities: External factors fueling Amazon’s rise
▪ Threat: External factors retarding Amazon’s progress
What are Amazon’s major strengths?

o Strong brand name – As a global e-commerce giant, Amazon has a strong position
and successful brand image in the market.

o Low cost structure. By mainly selling online, Amazon doesn’t incur huge costs
related to running physical retail outlets. Online marketplaces also potentially allow
for selling more units without any increase in marginal costs.Amazon constantly
invests in both additional fulfillment centers and to existing centers to enable a
reduction in order fulfillment times and shipping costs. These time and cost savings
result in lower prices that are passed on to consumers.

o Third party sellers. Amazon’s business model includes accommodating third

party sellers who are able to offer their own merchandise on Amazon’s sites and
whose products therefore compete against Amazon’s. At the beginning, third party
sellers were mainly attracted to the Amazon Marketplace because of the high traffic
to its stores. Now the main drivers are such programs as ‘Fulfilled by Amazon’ and
Prime. Third party sellers often offer products that are not available through
Amazon’s retail division.
o Customer oriented – Amazon caters to a large number of customers for everyday
needs at inexpensive prices. This has made it a customer-oriented brand.
o Go Global and Act Local strategy – This strategy has benefitted Amazon the
most. Amazon develops partnerships with local supply chain companies that help
it in competing against domestic e-commerce rivals. It understands the local needs
and launches its services as per the country’s culture.
What are some of Amazon’s weaknesses?

• Work Culture: Employees describe Amazon’s work culture as hyper-competitive,

critical, insensitive, and unfair. They also cite a lack of praise, disregard for work-life
balance, and lack of benefits as other aspects with which they aren’t satisfied.
• Quality Focus: Amazon has its eyes on optimizing product search, ease of buying, and
delivery speed. As a result, Amazon is not able to monitor the validity of claims or the
quality of products sold on its platform. This could result in people migrating to platforms
with higher reliability.
• Limited brick-and-mortar presence – Amazon owns very limited physical stores. This
sometimes hinders to attract customers buy things which are not sellable on online stores.
• Tax Avoidance Controversy – Tax avoidance in Japan, UK and US has sparked negative
publicity for Amazon. President Trump criticized Amazon over taxes on social media.
• Losing Margins in Few Areas – In few areas such as India, Amazon has faced losses.
It’s free shipping to customers can be one of the reasons that expose the risks of losing
margins in some markets.
• Language Barrier- the online store could only be used in either English or Hindi language.
As India is a very diverse country, many states in southern India speak and write in their
regional languages only. There is a large part of population in India which didn’t know at
least any one of the both languages stated above.
Amazon’s Opportunities:-

• By expanding physical stores, Amazon can improve competitiveness against big box
retailers and engage customers with the brand.
• More acquisitions of e-commerce companies can increase the company’s market share
and reduce the competition level.
• Launch of electric rickshaws in India– Amazon pledges to make a positive impact on
the environment. With this vision in mind, Amazon plans to deploy 10,000 electric
rickshaws for delivery in India by 2025.
• Amazon Alexa, a cloud-based voice service that powers Echo range of smart speakers,
also understands proper nouns in various languages such as Hindi, Marathi, Gujarati,
Kannada, Bengali, Tamil, Telugu, among others.

Amazon’s Threats:-

• Increasing cybercrime can affect the network security system of the company.
• Government regulations can also threaten the business proceedings of Amazon in some
critical countries. Amazon does not ship to Cuba, Iran, North Korea, Sudan, and Syria.
• Economic Recession – Amazon is not immune to an economic recession. If economic
uncertainty worsens, it can impact Amazon’s sales.
• Fake reviews – Amazon has an overwhelming amount of fake reviews, and the problem
has worsened in recent times due to the pandemic. Product reviews are a critical indicator
of quality and authenticity, and customers rely heavily on reviews to make purchases.

• Competitors- Walmart-owned Flipkart had introduced Hindi interface for customers last
year, and added Tamil, Telugu and Kannada in July last year. Smaller rival Snapdeal app
is now available in eight languages, including Hindi, Tamil, Kannada, Telugu, Malayalam,
Gujarati, Punjabi and Marathi, in addition to English.
 ❖ Marketing strategies according to consumer needs and
situation.

E-commerce giant Amazon India has added four new Indian languages to its platform, a move that
will help expand access to online shopping to 200-300 million customers. Amazon India customers
can select their preferred language in a few simple steps across Android and iOS apps, mobile and
desktop sites. The addition of four languages -- Kannada, Malayalam, Tamil and Telugu -- comes
ahead of the festive season that accounts for a significant chunk of e-commerce sales in the
country.

Amazon.in had launched Hindi shopping experience in 2018.

Hundreds of thousands of Amazon customers from tier I, II and III cities across Uttar Pradesh,
Bihar, Maharashtra, Rajasthan, Punjab, Chhattisgarh, Jharkhand, Telangana, Himachal Pradesh
have switched to the Hindi shopping experience.

"With this launch, Amazon.in customers can now discover great deals and discounts, read detailed
product information, manage their account information, place and pay for their orders including
bill payments, recharges, money transfers, track their orders and view order history in the language
of their preference," Amazon India’s Director, Customer Experience and Marketing, Kishore
Thota told PTI.

He added that Amazon India customers can select their preferred language in a few simple steps
across Android and iOS apps, mobile and desktop sites.In the past five months, the adoption of
Hindi shopping experience has grown by 3X, he added.

Thota said the company has worked with expert linguists to develop an accurate and
comprehensible experience in each of the languages on the platform.

The team has chosen commonly used terms over perfectly translated words to make the shopping
experience authentic, easily understandable and seamless for customers, he added.
"We have been innovating to expand the e-commerce opportunity to both customers and
businesses in the areas of vernacular, voice and video enabled initiatives for the past few years,"
he said.

In March this year, Alexa was introduced on the Amazon shopping app for Android devices to
help users shop using voice commands.

Amazon Alexa, a cloud-based voice service that powers Echo range of smart speakers, also
understands proper nouns in various languages such as Hindi, Marathi, Gujarati, Kannada,
Bengali, Tamil, Telugu, among others.

Last year, Amazon also launched an automated messaging assistant in Hindi, while customer
service is available in five Indian languages, including English, Hindi, Kannada, Telugu and
Tamil.
SUGGESTIONS
Amazon is the world’s leading online retailer and its success has spurred other physical, brick, and
mortar retailers to have an online presence. It is often referred to as the online equivalent of Wal-
Mart because of its reach and global footprint as well as its aggressive pricing strategies.

Amazon can leverage on several opportunities in the emerging markets and can ensure that its
global supply chain of networked warehouses deliver substantial value for itself and its
stakeholders.

Few recommendations are given below:

• Increase its limited presence through opening physical stores outside the U.S. This will
augment brand popularity and market reach.
• Enhance its strategic entry in developing countries where many growth opportunities are
available.
• Increase competitive edges and enlarge the gap between Amazon and its biggest
competitors.
CONCLUSION
Amazon has its task cut out as far as its future strategies are concerned and this SWOT Analysis
can provide a guide and a roadmap that the company can implement going forward. The key take
away from this SWOT Analysis is that Amazon has to focus on profitability and not volumes alone
if it has to be competitive in the future where volumes and market leadership are not alone to add
value to its stock.

SWOT analysis clarifies the current standing of Amazon. Few necessary improvements are needed
to be done to administer the lacking and reinforce its market position.

In short, Amazon needs to strengthen its key areas, minimize its weaknesses, avail opportunities,
and counteract threats for future progress.

• The highly competitive ecommerce world of today requires online sellers to be able to
provide their buyers with the best possible shopper and user experience. This also applies
to your international customers. Make this extra effort and localize your product listings to
benefit from global sales.
• Inspire your customers with a feeling of confidence and trust: this is strongly related to
being able to communicate in their native language.
• Don’t assume that everybody speaks English as they may lose interest in your offer due to
the extra linguistic hassle.
References

https://www.business-standard.com/article/companies/amazon-india-adds-4-languages-to-
woo-shoppers-ahead-of-festive-season-120092201145_1.html

https://www.digitalcommerce360.com/2021/02/15/ecommerce-during-coronavirus-
pandemic-in-charts/

https://www.nibusinessinfo.co.uk/content/swot-pestle-and-other-models-strategic-analysis

https://en.wikipedia.org/wiki/Amazon_(company)