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 Article
Analysis of marketing strategic issues at Amazon
Citation: Amiri, S., Vida, V. (2023). Analysis
of marketing strategic issues at Amazon. SEA
- Practical Application of Science, Year (volume)
XI, Issue (31), 3-13.
Received: 11th March, 2022
Revised: 29th March, 2023
Published: 30th March, 2023
Copyright: © 2023 by the authors. Published
by SEA Open Research.
This article is an open access article
distributed under the terms and
conditions of the Creative Commons
Attribution (CC BY) license (https://
creativecommons.org/licenses/by/
4.0/).
SEA - Practical Application of Science
Year (Volume) XI, Issue 31 (1 / 2023)
Sunaina AMIRI 1
Viktoria VIDA 1
Abstract: The objective of this study is to focus on analysing Amazon's current
marketing situation while taking into account its recent results, as well as
gathering information on the company and market's current situations, and
finally proposing an optimal marketing strategy in accordance with the
company's further documents and recommendations. The goal of this analytical
and interpretive case study is to figure out what marketing techniques are
required for success in a world where the pandemic is expanding, and
corporations are failing. Furthermore, the aim of this research is also to discuss
generic marketing plans and tactics that other corporations might adopt. The
main objectives of our research are to provide possible benefit to both the
scientific and business sectors, and to develop a market strategy that will be
effective in the future. By examining marketing techniques for Amazon
profitability, this qualitative study may contribute significant knowledge on how
executives might apply good business practices. Small business executives may
also be able to use the information gained from the research findings to enhance
business operations, as well as uncover and assess elements that encourage
innovative approaches to increase sales, efficiency, and market share. Executives
may be able to use the data produced from the data instrument to discover client
demands, assess market trends, and predict marketing and product plans for their
businesses based on the responses obtained from the data instrument.
Keywords: marketing strategy; IFE matrix; EFE matrix; IE matrix; CPM matrix;
SWOT and TOWS matrix
JEL Classification: M21; M30
1 University of Debrecen, Hungary, Faculty of Economics and Business
https://seaopenresearch.eu/Journals/spas/
SEA - Practical Application of Science
Year (Volume) XI, Issue 31 (1 / 2023)
INTRODUCTION
Amazon's marketing mix (the "7Ps of marketing")
consists of product, price, place, promotion, people,
process and physical evidence. Four categories are
used to group Amazon's products:
Product
Amazon is one of the world's largest e-commerce
platform and one of the five largest IT companies in
the world. Amazon sells all its products online,
where customers can place their orders by logging in
to the mobile app or website. Amazon started out as
an online bookseller but has now significantly
expanded its product range. Everything on
Amazon's website and mobile app, from vitamins,
health & personal care products, to gaming products,
to electronics, can be considered as its potential
product. This is not only something Amazon can do,
but other independent sellers have the chance to do
the same thing. The website and app design
(marketplace business model) generates huge profits
for Amazon. It also offers other services to a variety
of target groups. These include AWS services,
which offer web-hosting services to its customers.
Price
Amazon's pricing shows highly variable, constantly
changing its prices depending on the type of product,
but also changing them every month or even within
a given day. It generally uses pricing principles that
are based on the lowest possible cost, by pricing
below the competition. Another hand amazon use
differential pricing based on the location of the
customer. It can do this by having a separate website
in each country where it is present.
Place
Amazon as a website is known all over the world.
Products and services can be accessed through its
own website or mobile app. The steps of ordering
from Amazon are: first, the customer places the
order, then Amazon's centres purchase the goods,
then store the goods in their warehouses, and finally
deliver the goods to the final consumer via local
postal and delivery services. Its warehouses are
located in different places so that goods can easily
reach all destinations. In the future, Amazon plans to
set up its own delivery network, with the not hidden
aim of reducing its own costs.
Promotion
To promote the brand, Amazon uses aggressive
marketing strategies. Amazon's ads are based on the
browsing habits of potential customers. It uses
online advertising, its printed ads also appear in
pg. 4
newspapers, but it also has an extremely strong
presence on social media. Additionally, Amazon
offers affiliate programs that allow website and blog
owners to promote Amazon products on their
websites and blogs.
In addition, Amazon also uses sales promotion to
persuade its consumers, offering discounts during
holiday and festival seasons, which results in
additional significant sales. Among its PR activities,
we find the launch of Amazon Smile, with which it
donates to charities, for example, it has a successful
campaign in India. Amazon also does direct
marketing campaigns for companies that provide its
web services.
People
Amazon values its employees. Regardless of the
field and position they work in, they can enjoy
different benefits (for example, discounted
shopping, vacation, health care, and financial
support).
Process
Amazon is a world leader in e-commerce and web
services because it uses the best available business
technology every day to serve consumers and
conduct personalized marketing activities. In order
to improve its efficiency, it strategically divides
warehouse centers and constantly communicates
with its customers.
Physical Evidence
As Amazon is an online store, it offers products and
services to its customers on its website and mobile
application. In addition to the web interface and
applications, in order to satisfy the needs of
consumers, it operates huge warehouses and service
units. Its logo, which can be found on its packaging,
is known worldwide.
MATERIALS AND METHODS
The main purpose of this paper is to show how can
be analysed the Amazon’s marketing environment
from different perspectives by using different
methods. For this research, we have chosen the most
important methods used by strategic management,
because an effective, well-chosen, future-focused
strategy combines external opportunities and
internal resources (Bittner et al., 2018). For the
external analysis, we choose the PEST analysis,
External Factor Evaluation (EFE) matrix,
Competitive Profit Matrix (CPM) matrix, for the
internal analysis we choose SWOT analysis, TOWS
SEA - Practical Application of Science
Year (Volume) XI, Issue 31 (1 / 2023)
analysis, Internal Factor Evaluation (IFE) matrix,
and IE matrix.
In the internal analysis of a company, its capabilities
must be taken into account, and we focus on how the
enterprise will be able to meet the expectations set
forth in the future (Madai et al., 2020).
The SWOT (Strengths-Weaknesses-Opportunities-
Threats) matrix is an important mapping tool that
helps leaders to create four types of strategies: SO
(Strengths-Opportunities) strategies, WO
(Weaknesses-Opportunities) strategies, ST
(Strengths-Threats) strategies, WT (Weaknesses-
Threats) strategies. Reconciling key internal and
external factors is the most critical part of building a
SWOT matrix and requires good sense, and
sometimes there is no one best match. (David,
2011). After formulating a SWOT, organizations try
to pursue strategies that exploit strengths and
improve weaknesses (David et al., 2021), this will
be the TOWS matrix.
Internal Factor Evaluation Matrix is a suitable
method for quantifying strengths and weaknesses
(Bittner at al., 2020).
The Internal Factor Evaluation (IFE) matrix is a
strategy building tool used to aggregate and assess
the key strengths and weaknesses of a key functional
area of a business, and provides a basis for defining
and assessing the relationships between these areas.
The formulation of the IFE matrix requires intuitive
judgement, so the appearance of a scientific view
should not be understood as an all-powerful
technique (David, 2011).
The internal-external matrix (IE matrix), used to
summarise the internal and external environment.
The IE matrix summarises the outcomes of the
assessment of the factors - the assessment of the
external factors (EFE matrix) and the assessment of
the internal factors (IFE matrix) (Chladkova and
Formankova, 2016).
In business connection, PEST analysis is the
analysis of the external business environment in
political (P), economic (E), social (S) and
technological (T) terms (Ho, 2014). PEST, as a
framework for the analysis of macro environmental
factors, is also referred to as STEP (Clulow, 2005),
or SEPT (Narayanan and Fahey, 1994), or STEEP-
analysis (Szigeti et al., 2011). STEEP analysis is
regarded as a powerful strategic analysis tool
because it provides a comprehensive picture of an
organisation's current environment and future risks,
with the assumption that if an organisation can
identify its gaps and assess all the factors that affect
its business environment (Szigeti et al., 2011). Some
references, e.g. Johnson et al. (2009), use instead a
more sophisticated framework called PESTEL
analysis, which contains six categories: political,
pg. 5
economic, social, technological, environmental and
legal.
On the other hand, PEST is not a well defined and
precise analytical framework. A large number of
variables can arise from each dimension, which can
make it difficult to write. Hence, it is necessary to
highlight those factors that have the greatest
influence on the industry, sector or country under
study (Peng and Nunes, 2007).
The elements of PEST can be considered as macro-
environmental factors and are useful because the
success of an organization or management cannot be
understood without information about the
surrounding business environment (Buchanan and
Gibb, 1998). The business environment can be
defined as all relevant social and physical factors
outside the organization that are taken into account
in the decision-making process (Duncan, 1972).
The External Factor Evaluation (EFE) matrix helps
to find the company's considered important
opportunities and threats, which are external factors.
The method is used to gather external information to
present economic, social, cultural, demographic,
environmental, political, governmental, legal,
technological and competitive issues (David, 2009).
The External Factor Evaluation (EFE) matrix helps
managers to collect and evaluate economic, social,
demographic, cultural, environmental, political,
legal, governmental, technological and competitive
information.
To understand the drivers of industry competition is
the first step for strategy development (Porter,
2008). The Competitive Profile Matrix (CPM)
identifies the company's main rivals and its specific
strengths and weaknesses. The weights and
weighted total scores in the CPM and EFE have the
similar meaning (David, 2011).
RESULTS AND DISCUSSION
External analysis is the process of examining
changes in the industry, market, or external
environment that may have an impact on the
company's operations. Businesses and corporations
conduct environmental analyses to keep up with
industry changes. External analysis is the
examination of the external environment in order to
gain insight into the opportunities and threats that
exist within a business environment. Businesses can
adapt to change and streamline their current
products to meet the needs of their client base with
the help of external assessments.
SEA - Practical Application of Science
Year (Volume) XI, Issue 31 (1 / 2023)
PEST analysis
Political factors: Amazon has benefited from the
political support to improve the efficiency of e-
commerce and cybersecurity. Amazon may also
benefit from the fact that the more developed a
country is, the more politically stable it is likely to
be. Government support in each country helps or at
least does not hinder the growth of online retailing.
Amazon also risks becoming a strong rival to big
brands, especially international companies entering
the US market. As this sector of the economy is
booming, Amazon could also risk facing
competition from big-name foreign brands entering
the online retail market.
Economic factors: A company's revenues depend
largely on economic factors such as interest rates,
GDP, unemployment and the price of raw materials.
The company uses a combination of economic
factors to set prices, develop supply, products and
services. Each of these factors affects the
profitability of the firm. The different tax rates are a
major problem for Amazon, especially in Asian
countries. On the other hand, it is worth considering
the purchasing power of the people in the country,
as it does matter what price you sell each product
for.
Among the economic factors, we should mention
that the Covid-19 epidemic has shaped our lives in
the past few years. It brought with it a lot of new
restrictions and strong regulations, and the
consequences of these have had to be managed with
each country, because it affecting our daily lives
(Vida and Popovics, 2020).
Social factors: Companies can assess the potential
market using social elements such as population,
demographics, education, religion and culture. From
a social point of view, Amazon may be vulnerable to
declining employment opportunities. Population
growth, rising per capita income in some countries
and the growing popularity of online shopping will
have a positive impact on the global expansion of the
business. Its products are suitable for different age
groups, different genders and different levels of
education, with a wide range of products to suit
everyone.
Technological factors: Among the technological
factors, technological innovation should be
mentioned first. Digitalisation, automation and other
technological advances make it easier to organise
production, sales and delivery. Amazon as a
business is constantly looking for efficient and
modern ways of selling, advertising and delivery.
Their customer service is always available thanks to
the live chat function, which greatly helps to solve
customer problems and provide efficient customer
support.
pg. 6
External Factor Evaluation Matrix (EFE)
An External Factors Evaluation matrix evaluates key
external factors that affect the company. In our
assessment of Amazon, we have identified the
following elements that affect Amazon's revenue
and profitability in our analysis of the company
(Table 1.).
According to the weights provided in Table 1, it can
be inferred that the rise in internet users, online
shoppers, the intensity of the rivalry, which is fierce
and ever-increasing, and other related factors are
likely the most significant influences on the online
retail sector as a whole and Amazon's company in
particular. A weighted score of 2.65 (above average
and midpoint 2.5) demonstrates that Amazon has
been able to take advantage of opportunities and
counter threats. Amazon also performing rather well
and can still take advantage of possibilities and
mitigate challenges that it has not been able to
manage, such as the foreign currency market and
expanding its corporate operations in Asia.
Competitive Profit Matrix (CPM)
Different organisations obviously have different
strengths and weaknesses. For example, one
organisation may have the best cost base due to its
excellent supply chain; another may have the best
product quality and a third company may have the
best customer service. One of the important pillars
of the analysis that confirm the strategy is the
matrix-based assessment of competitors (CPM)
(Nábrádi et al., 2021). A Competitive Profile
Matrix's benefit is that it enables you to rank both
yourself and your rivals.
The main two competitors of the amazon are the
Alibaba and the Walmart. Alibaba offers a cloud
computing service similar to Amazon's named
Alibaba Cloud. The second rival is Walmart, which
also offers comparable goods and services to
Amazon. In Table 2 we can see 12 different critical
success factors, along which we compare Amazon
with its two main competitors.
After looking at Amazon, Walmart, and Alibaba, we
were able to find the ratings and scores for each
company, which are shown in the CPM up above
(Table 2). By our opinion, the main success factors
for the Amazon are the product variety, the
competitive pricing, the high-quality products, email
marketing, and simple checkout procedures. The
most important factor for Amazon, Walmart and
Alibaba was product diversity. Alibaba was 0.02
points ahead of Amazon in the global market
penetration category, while Walmart and Amazon
scored the same. When comparing the combined
weighted scores of the three companies, Amazon
SEA - Practical Application of Science
Year (Volume) XI, Issue 31 (1 / 2023)
scored roughly one point higher than Walmart and
Alibaba.
SWOT analysis
Strengths
Amazon has grown remarkably over the last few
years, so Amazon is in a good financial position.
One of Amazon's many strengths is its extremely
wide range of products. Although it does not have
the lowest prices, there is not a big difference
between Amazon's prices and the price of its
competitors. It has built up a strong brand image
because of the wide range of products and low
prices. With a continuous expansion of products and
services (including Amazon prime), customers can
take advantage of extra benefits. Benefits include
unlimited Prime Video movie and video streaming
as well as free two-day shipping on qualifying
orders. In general, Amazon's rising popularity is a
result of the successful customer engagement it has
achieved. In fact, when it comes to top-notch
customer service, Amazon is regarded as a pioneer.
To sum up, the main strengths of the Amazon are
strong worldwide network of sellers, strong brand
image, excellent customer service, a wide range of
products, and the focus on customer convenience.
Weaknesses
Despite its high sales volume, Amazon's profit
margin is a weak point compared to its rivals.
Amazon's wide range of products may be
responsible for the company's declining profit
margin. As Amazon's sales have increased recently,
its shipping costs have also risen significantly,
which has affected its profit margin. The large
number of third-party merchants on Amazon makes
customers more likely to buy counterfeit goods. By
selling counterfeit goods, Chinese sellers have
reduced the quality of the products Amazon offers.
Although Amazon is still dealing with these
allegations, the brand's reputation has undoubtedly
suffered. Despite mobile commerce growing three
times faster than e-commerce, Amazon has done
little to improve its customers' mobile shopping
experience. Shoppers see the same interface and
design when they shop on their website, so a certain
percentage of mobile users are not reached because
they do not get the special treatment that competitors
do when they shop on a mobile device.
Opportunities
As previously noted, Amazon is regarded as the
biggest online retailer in the United States, and it
offers millions of products to its customers across a
number of product categories. Although Amazon is
well known throughout much of the world, their
pg. 7
success is not as great as it is in America.
Diversifying the company's operations into new
markets can aid in the brand's rapid expansion.
Amazon may experience greater growth in the Asian
regions, where it must concentrate on serving
customers' demands. Finding out what the demands
of the local customers are and finding a means to
meet them while respecting cultural variations are
crucial for breaking into these international markets.
As the Asian market is more traditional and may
value products that meet higher product quality
standards, Amazon may need to change its
marketing strategy to appeal to this market.
Furthermore, Amazon needs to concentrate on
maintaining a low-price strategy since the more
affordable a brand is in the emerging markets, the
more appealing the brand is. Additionally, Amazon
might also increase its market share by purchasing
rival companies. Previous years they have bought
businesses including Twitch, Zappos, and most
recently the Whole Foods supermarket chain.
Amazon might extend its reach by utilizing its
physical locations, currently only it has three
distribution centres. With its physical locations,
Amazon may also be able to provide its customers
freshness in their online grocery orders and to
expand its same-day shipping service to other
regions of the United States. Given that, clients
would only need to wait a few hours for their
deliveries, same-day delivery services have proven
to be an extremely effective approach to draw in new
customers. Technology innovation will continue to
be key to Amazon's success as the company looks to
develop new, faster delivery operations using drones
that could help lower shipping costs. Additionally,
Amazon might extend its reach by utilizing its
physical locations; the physical storefronts can assist
the company in reaching customers who like to shop
in-person.
Threats
The major threat can be that the Amazon has faced
new rivals as the e-commerce industry has been
expanding at a rapid rate. Walmart, which is seen as
Amazon's major rival, has expanded its online sales
by adding thousands of new items to their website,
endangering Amazon with its low prices. E-bay is
one of Amazon's other top rivals, also offer a huge
selection of things at affordable prices. Despite
being smaller, local firms like Alibaba and Flipkart
pose a serious challenge. Furthermore, E-bay poses
a serious threat too. Another threat could be that
apparel businesses and other retailers are lowering
their operational costs by adopting Amazon's model
and shifting their sales strategy efforts to e-
commerce. Any shift in transportation costs could
SEA - Practical Application of Science
Year (Volume) XI, Issue 31 (1 / 2023)
have an impact on Amazon as well, for instance, the
price of oil. If the price of oil rises, it is possible that
shipping costs will rise as well, lowering the profit
margin. Changing consumer habits is also a major
challenge. Younger people's shopping habits have
altered because of Amazon's e-commerce, but some
people still choose to make in-person purchases
because they dislike the online shopping experience.
These clients might like trying items out before
purchasing them, they might prefer speaking with a
salesperson, and they might not feel at all secure
when making purchases online. Customers do not
like posting their personal information online, such
as name, birth date, address, and credit card
information, because they fear fraud and want to
preserve their privacy in the event of a data breach.
TOWS analysis
A TOWS analysis is a newer version of a SWOT
analysis that combines threats, opportunities,
weaknesses, and strengths. This is a valuable way to
analysing the Threats (T), Opportunities (O),
Weaknesses (W) and Strengths (S) of Amazon's
existing market environment (Nyarku and
Agyapong, 2011). The TOWS matrix used by
Amazon helps you analyse opportunities and
identify important tactics. Compared to the standard
SWOT analysis, it provides a deeper analysis by
combining individual factors. A TOWS analysis
(see Table 3) directs attention toward maximizing
strengths, minimizing weaknesses, seizing
opportunities, and managing risks.
As with any other company, Amazon has flaws that
must be fixed around, but overall, they have had
more successes than failures. Amazon is a high-risk
company that does not hesitate to experiment with
new ideas and expand its business. Amazon is
attempting to reach its customers in new ways by
leveraging new channels in an industry that is rife
with opportunity.
Internal Factor Evaluation Matrix (IFE)
The internal-external (IE) matrix presents the
different departments of the organization on a nine-
cell screen. The IE matrix is similar to the BCG
matrix in that both tools involve the representation
of organizational divisions on a schematic diagram;
therefore, both are called “portfolio matrices”. In
this study, we focuses on IE Matrix, because it
requires more information about the divisions than
the BCG Matrix (David, 2011). Amazon’s Internal
Factor Evaluation Matrix created based on internal
strengths and weaknesses, we gave them weights,
rate, and calculate the weighted scores. The result
we can see in Table 4.
pg. 8
The strong brand names and recognition are the
online retail market's key strengths, but corporate
culture, sales, and after-sale services also play a
significant role. The biggest weakness of this sector
is the high cost of transportation for certain goods.
A strong internal position is shown by a weighted
score of 3.02 (higher than 2.5), but there are still
problems to be resolved. Like Amazon, high product
diversity and entry into new product markets
resulted in expensive expenses, and even though net
sales increased from 2019, net income declined
significantly. Amazon's website has few languages
for potential customers in different countries, which
has a significant impact on their sales, especially in
Asian market.
In abroad, Amazon has potential to expand its
market. The company should enter the markets of
developing countries in which online shopping is not
yet significant, as there would be no obstacles to
rapid expansion here. New markets offer growth
opportunities as there is less threat of new entrants
and less competition than in more developed
markets such as the United States or Europe.
Amazon needs to enter new industries to take
advantage of current business prospects that have
not been achieved due to the high costs of innovation
and technology integration. To strengthen the brand,
Amazon should invest more money in opening
physical locations in emerging areas.
IE Matrix
The IE Matrix is based on two key dimensions: on
the x-axis we can see the total weighted score of IFE
and on the y-axis the total weighted score of EFE
(David, 2011). The following IE matrix would be
determined from Amazon's External Factor
Evaluation and Internal Factor Evaluation scores:
External Factor Evaluation: 2.65 = Medium
Internal Factor Evaluation: 3.02 = Strong
The result of the IE matrix is Hold strategy; we can
see it in Table 5.
The marketing analysis of the Amazon demonstrates
the steps taken to create value and obtain a
competitive advantage. Given how aggressive
Amazon is as a business, maintaining their position
depends on product and market development.
Amazon is exceeding expectations in terms of
market share both domestically and internationally,
demonstrating its strong industry position and
commitment to its clients.
The firm's long-term goal is to make sure that
customers can purchase any product they desire,
whether it is made by the company itself or one of
its subsidiaries. With this tactic, the company hopes
to keep its current clientele while expanding into
new markets.
SEA - Practical Application of Science
Year (Volume) XI, Issue 31 (1 / 2023)
The business also plans to collaborate with other
businesses that make comparable or unrelated goods
and present them in their web stores so that buyers
can choose the goods from the businesses they
choose.
Customer satisfaction and loyalty are one of
Amazon's top values. According to our proposal,
customer commitment could be further strengthened
by creating an own brand. Both their competitive
advantage and industry power would increase,
giving them an advantage over their competitors.
In order to increase its profitability and competitive
advantage, Amazon needs to take advantage of its
low-cost structure. By investing in technologies
designed to provide efficient services to customers
at a reasonable price (compared to competitors such
as Walmart), the aforementioned corporation would
strengthen its position as the cost leader in the
industry. Amazon's low-cost business model will
grow both its customer base and market share, and
compete effectively with competitors. In order to
improve overall efficiency, Amazon must also think
about maximizing economies of scale. There are
different levels of indicators to measure the
efficiency (partial, complex, social, corporate,
regional and national) (Nábrádi et al., 2008). The
company can maintain its strong market position in
the international market by taking advantage of the
opportunity to expand the product range and
continue to apply its low-cost strategy. Amazon
remains profitable even if it offers the lowest prices
compared to its competitors because the sales
volume is high. The company is threatened by both
competition and substitute products, reducing
substitutes by developing private brands and using a
low-cost structure.
Amazon could gain new markets by moving to
expand its market by introducing and expanding its
grocery delivery service. Although Amazon is in a
high position, it must employ several competitive
techniques to maintain its position.
In order to keep loyal customers, product quality
must be continuously maintained and new
innovation opportunities must be sought. For
instance, to improve customer experience, the
company might make its website more user-friendly.
More money must be spent on the organization's
research and development initiatives in order to
implement customer-centric innovation. To
accomplish the strategy, for instance, the present
R&D budget should be increased by 30% over the
course of the next five years.
pg. 9
CONCLUSIONS
The main conclusions of the SWOT and TOWS
analysis are that Amazon has strengths and
opportunities that it can use in the future for its
growth and international expansion. At the same
time, they can focus on reducing potential risks and
dangers and develop the weaknesses. The
suggestions in this article show how Amazon can
make the most of its growth strategy by maximizing
its opportunities and strengths (offensive strategy)
and minimizing its weaknesses and threats
(defensive strategy) to improve its market position
in the global market.
Both domestically and internationally, Amazon has
a strong brand that it can use to expand its markets
abroad. Amazon will continue to expand its
customer base globally and create new items
through an already well-known international brand.
We have covered many of the options that Amazon
can use to enhance its marketing tactics and assist in
helping the company make better judgments in this
research. With the help of this analysis, one may
determine what is best for the future and understand
Amazon's existing positions. Additionally, it can aid
in developing strategies that would increase revenue
while minimizing risk and loss.
It is clear from a thorough analysis; the Amazon has
the following opportunities for strategy: create new
product or service, market penetration,
diversification or integration. Additionally, it can be
seen that Amazon has been actively participating in
and pursuing these tactics since the beginning. A
proposal is for Amazon to create more brands that
are private, because the company currently has
industry strength and more of their own brands will
help their brand. Amazon would become a more
competitive corporation if it had more brands that
are private. Another recommendation is to enter the
food industry, which would increase their market
share by expanding their existing range with new
products.
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SEA - Practical Application of Science
Year (Volume) XI, Issue 31 (1 / 2023) pg. 11

LIST OF TABLES

Table 1
External Factors Evaluation Matrix (EFE)

Weights Rating Weighted

scores
0.0 to 1.0 1 to 4
Opportunities
1. Increasing the numbers of web customers. 0.08 3 0.24
2. Improvements in the bookselling industry. 0.06 3 0.18
3. An increase in web users, mostly in global markets. 0.11 2 0.22
4. The growth of e-commerce in different regions (Asia and the 0.11 2 0.22
Pacific).
5. Adding more products or services. 0.08 4 0.32
6. The acceptance of new technology and innovative ideas by young 0.05 4 0.2
people.
7. A weaker dollar will boost the value of other currencies. 0.04 2 0.08
Threats
8. Strong competitors (eBay, Barnes & Noble etc.). 0.15 3 0.45
9. Online sales may be rejected due to various taxes. 0.05 3 0.15
10. Low market entry barriers have led to increased competition. 0.11 2 0.22
11. Government restrictions and political unpredictability's effects on 0.06 2 0.12
online commerce globally.
12. A strong U.S. dollar will devalue other currencies. 0.05 2 0.1
13. Lack of computer skills. 0.05 3 0.15
Totals 1 2.65
Source: Based on own calculations and assumptions, 2022

Table 2
CPM Matrix

Amazon Walmart Alibaba

Critical Success Factors Weight Rating Score Rating Score Rating Score
Selection of products 0.20 4 0.80 3 0.60 3 0.60
Competitiveness of prices 0.14 4 0.56 2 0.28 2 0.28
Customer care/service 0.10 3 0.30 1 0.10 2 0.20
Quality of products 0.09 4 0.36 2 0.18 3 0.27
Customer loyalty 0.05 2 0.10 2 0.10 3 0.25
Delivery time 0.10 3 0.30 2 0.20 2 0.20
Profit 0.02 4 0.08 4 0.08 4 0.08
International market penetration 0.02 3 0.06 3 0.06 4 0.08
Market share 0.05 3 0.15 4 0.20 4 0.20
Email marketing 0.04 4 0.16 2 0.08 3 0.12
Brand 0.09 4 0.36 4 0.36 3 0.27
Simple payment 0.10 4 0.40 3 0.30 2 0.20
Total 1.00 3.63 2.54 2.75
Source: Based on own calculations and assumptions, 2022
SEA - Practical Application of Science
Year (Volume) XI, Issue 31 (1 / 2023) pg. 12

Table 3
TOWS Matrix

Strengths:
1. R&D-centric approach.
2. Acquiring new competencies.
3. Robust IT system.
4. A large variety of products at
competitive costs.
5. A powerful brand image.
6. Consumer contentment.
Weaknesses:
1. Poorly performing Chinese
market.
2. High shipping fees.
3. Purely online presence
employee satisfaction.
4. Product differentiation is
minimal.
5. Low margins of profit.
Source: Based on own calculations and assumptions, 2022
Threats:
1. Dependence on vendors.
2. Easy imitation/competition.
3. Privacy and security issues.
4. Reliance on customers.
S-T strategy
Amazon's strong IT systems (or
the tools to build them) are key
to preventing data breaches
because the company only
conducts business online.
W-T strategy
Setting up physical storefronts
will aid in diversifying (moving
away from 100% online) and
fending off competition.
Find new suppliers to increase
your vendor diversity.
Opportunities:
1. Establishing a physical presence.
2. Expansion through acquisitions and
brand integration from the past.
3. Diversification.
4. Enlarging the market for technology
services.
5. Expansion of cloud computing.
S-O strategy
Involving new areas, new products,
new customers using strong brand
awareness.
W-O strategy
Involvement of Asian markets,
especially China. By establishing a
physical presence, like a chain store,
they would be able to access a new
market while lowering the threat to
online security.

Table 4
Internal Factors Evaluation Matrix (IFE)

Weights Rating Weighted

0.0 to 1.0 1 to 4 Scores
Internal Strengths
1. Powerful brand name 0.13 4 0.52
2. Business culture 0.11 4 0.44
3. Effective leadership group 0.08 3 0.24
4. Customer support services 0.09 4 0.36
5. Reliable post-purchase assistance 0.11 4 0.44
6. New and improved technology: hardware and software 0.06 3 0.18
7. Excellent shipping quality 0.07 4 0.28
Internal Weaknesses
8. A decline in profit from 2019 to 2021 0.09 1 0.09
9. The risk of diversification into unrelated fields 0.08 2 0.16
10. Some offered items have expensive delivery costs 0.05 1 0.05
11. Free shipping by the company could have an impact on future 0.06 2 0.12
financial results
12. Lack of different languages on websites 0.07 2 0.14
Totals 1 3.02
Source: Based on own calculations and assumptions, 2022
 SEA - Practical Application of Science
Year (Volume) XI, Issue 31 (1 / 2023) pg. 13

Table 5
IE Matrix
IFE total weight
Strong Average Weak
(3.0-4.0) (2.0-2.99) (1.0-1.99)
EFE total weight
High (3.0-4.0) Grow And Build
Medium (2.0-2.99) Hold And Maintain
Low (1.0-1.99) Harvest And Divest
Source: Based on own calculations and assumptions, 2022

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