Amazon Inc

Amazon Inc
External Environment
External Analysis
Environment Analysis
Introduction:
Amazon Inc in a glance:

Acquired 128
Earth’s
Amazon Inc Went to public in Diversified into entities, launched
Everything
founded by 1997, Operated in many other its own products
Store and
Jeffrey P Bezos as losses up to 2001 product lines and and platforms like
World’s
a online book services Prime, Alexa, fire
largest e-
selling store in etc
1994 commerce
retailer

External Environment Analysis:

Analyses the numerous forces and
influencing factors of the evolving world

Early Warning System identifies potential

risks threats opportunities from the evolving
world

Helps in building strategy to deal

profitability, volatility and growth of the
firm
Competitors
Threats and competition from Walmart:
• Exceptional Brick and mortar Stores
• Stores proximity to 90% of Us population
• Minimal shipping operation costs
• Motivated vast workforce
• Tough competition in e-retail with its resources.

Threats from Meta:

• Developing a 7 layered AI - Virtual world metaverse.
• Gaming and content making takes a new shape.
• Content creators may shift from amazon live to meta.
• Ecommerce take a shift with its Hyper personalized experience.
Competitive Advantages:
Brand Value:
• Crucial factor to penetrate into audience.
• Sells only good products to build customer trust as its branding.
• Extraordinary customer service.
• Brought its array of value adding products.
• strives to live up to the tagline "most customer-centric organization“
• Developed Excellent systems to address complaints, tracking and addressing the issues.
Innovation & Technology:
• Exceptional IT Systems
• Gigantic investment in R&D
• Dedicated to innovate continuously to bring new range of own products like Alexa, Kindle etc.
• Buys necessary entities to strengthen the existing entities.
• Uses AI, Cloud computing to run remarkable logistics chain.
Competitive Advantages:
Other Important Competitive Advantages
• Growth
• Customer Base
• International Presence
• Brick and mortar presence by retail store chains acquisitions
• Collaborative and use friendly platform for sellers for vast customer base
• Investments in new technologies
• Sound financials
• Human resources
• Technological advancement in inventory management.
Porter’s five Forces analysis
Threat of new entrants: (Very Low):
• Amazon experiences Very low threat of new entrants.
• Although replication of Amazon model is intense, reaching its economic status is impossible.
• Impossible for start-ups or new entrants to hugely invest in inventory, logistics, marketing.
• Impossible to raise the capital and reach the magnitude of amazon.

Threat of Substitutes: (High):

• Amazon product catalogue is not unique and has numerous substitute products from different retailers online and offline.
• Customers will leave Amazon just after single negative encounter due to the cheap and simple availability of substitutes.
• Amazon's largest challenge is Customers can easily switch from Amazon to others due to the cheap switching costs in the market.
Porter’s five Forces analysis
 Bargaining power of buyers – High:
• Amazon focuses to be a customer centric company
• Customers aspires high quality products at lowest price due to the immense substitutes in
the market.
• Due to the high bargaining power & Price sensitive nature of customers , Amazon need to
sell products with low margins else it loses to substitutes.
• Amazon should focus more on customers for good long run.
 Bargaining Power of Suppliers – Low: 
• Being a well established firm amazon can dictate terms like payment cycles to the suppliers.
• Inventory can be sourced from Multiple suppliers.
• moderate forward integration
• Hence bargaining of power of suppliers is very low.
Porter’s five Forces analysis
 Rivalry Among Existing Competitors- High
• The rivalry and competition are very high due to vast number of players ofline and online.
• The main competitors of Amazon are Walmart, Flipkart, Alibaba, eBay,metaverse,Netflix,Microsoft,google,
and many more.
• Low switching costs, numerous substitutes poses threat from the rivals.
• Well established entities in the newly entered businesses of amazon restricts amazon piece of market share.
• Hence the market competition is everlasting and very high that amazon need to take careof for its existence.