Amazon Analysis (Updated) PDF

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Introduction: Amazon is a customer-focused organization. They put great resources into developing their system in order to enhance the user's experience and inspire them to return to the website. Amazon.com was founded by Jeffery Bezos in response to the increasingly rising popularity of the internet in the year 1994. Amazon continues to outperform its competitors by focusing on maintaining low cost for its customers. The low-cost differentiation approach is Amazon's generic market positioning strategy. The business prioritized profitability and adopted a rigorous overall operational plans to offer all of its goods at a lower cost than any rival.

1: SWOT Analysis: Strengths  Amazon is global giant in e-commerce, amazon has a strong position and a successful brand image throughout the world.  Amazon is recognized as the world’s most trustworthy company by fortune 100.  Amazon is customer oriented company and they focus relentlessly to large number of customers’ needs and wants.  Innovation is at the core of Amazons operations as they are constantly coming up with new and innovative ways to improve its service offerings and product line.  Amazon has maintained low cost structure by selling everything online, Amazon avoids the costs of maintaining physical inventory.  It has a well-developed value chain mechanism, which aids in the maintenance of a low-cost structure.

Weaknesses  The expansion plans of Amazon places a significant strain on the management, financial and operational resources.  Amazon is not always been able to forecast the growth rate as they estimates the investment levels and expenses based on the sales. The investment and expenses are fixed and they are not always been able to adjust it when the sales are less that forecasted.  Amazon has very limited penetration in the developing markets.  Amazon has acquired and invested in number of companies these transactions has made disruption in the ongoing business including the loss of focus on existing business.  Amazon do not have any “key person” life insurance policy, they rely on the existing skilled personnel but do not have any plan for

the future. Amazon has high traffic of third party sellers which aids to the diverse products offering of the company. Opportunities Threats  Amazon could be able to break into or extend  Easily imitable business model of Amazon as in today's digital world, online retail its operations in emerging markets and also in businesses have become very popular. As a the developing countries. result, competing businesses will easily  Amazon can boost its competitiveness against imitate Amazon's business model. the giant rivals and engage consumers with  Competition is intense as some of its current the brand by expanding its physical stores. and potential competitors have longer  Amazon can use backward integration to histories, great resources, more customers and distinguish its products and raise profit greater brand image, they may secure better margins by expanding production of in-house terms with vendors and may adopt more brands such as Amazon basics. aggressive pricing. 

(Table#1)

1.2: VRIN Analysis:

Brand Image Trust Worthiness Customer

Valuable Yes Yes Yes

Rare Yes No No

Imitable No Yes Yes

Organization Yes Yes Yes

Orientation Innovation Low cost structure Value Chain Third Party Sellers

Yes Yes Yes Yes

Yes Yes Yes No

No Yes No Yes

Yes Yes Yes Yes

(Table#2)

1.3: IFAS Analysis: Key Internal Factors

Weight

Rating

Weighted Score

0.15

4

0.60

Strengths 1. Brand Image

2. Trust Worthiness

0.05

3

0.15

3. Customer Orientation

0.1

4

0.20

4. Innovation

0.15

4

0.6

5. Value Chain

0.05

3

0.15

6. Low cost structure

0.05

3

0.15

1. Expansion plan strains

0.05

4

0.2

2. Forecasting growth rate

0.1

3

0.30

3. Low penetration in developing markets

0.2

4

0.8

4. No “key person” life insurance policy

0.1

3

0.3

TOTAL

1.00

Weaknesses

3.45

(Table#3)

2.1: Mission: The mission statement of Amazon is “to continually raise the bar of the customer experience by using the internet and technology to help consumers find, discover and buy anything, and empower businesses and content creators to maximize their success.” Many of the typical features of ideal mission statements are present in Amazon mission statement, for example, it involves the company's target customers and industry, product range, and specific business goals. The company, on the other hand, excludes technology as well as the essence of the business and its operations in its mission statement.

2.2: Vision:

The vision statement of Amazon is to be “We aim to be Earth’s most customer centric company.” The vision statement of Amazon includes clear characteristics, such as a summary of target market and a part of its target market. However, only a few of the traditional features of ideal vision statements are met by this corporate vision. Amazon's corporate vision is succinct, straightforward, and abstract enough to be relevant throughout the board. Even so, this corporate vision is not stable enough to guarantee its suitability for the company's future.

2.3: Objectives: The objectives of amazon are the following 

Customer Obsession



Passion for invention



Commitment to long term thinking



Operational excellence

(Chart#1: Organizational Chart)

3: Stakeholder Analysis from Ethical Perspective View: Amazon acknowledges the stakeholder’s ability in the organizational growth. Since the organization's global scope, Amazon's stakeholders have a broad

range of interests. This situation necessitates the company's ethical and corporate and social responsibility to provide a reliable service to its stakeholders all over the globe. Amazon gives the highest priority to its customers who are one of the most important stakeholders and affect the revenue of the organization. Equal pricing, ease of operation, and online protection in transactions with the organization are all important to these stakeholders. Amazon meets most of these expectations by focusing on customer service and technological advancements. Amazon gives values to its employees and establish an ethical and social responsibility policies for its employees. The company's human resource management make it easier to come up with new strategies to improve business

productivity.

Amazon

meets

the

requirements

of

these

employees by investing in career planning and a reward system that is consistent with the company's good prospects. Amazon also gives and equal importance to the communities and have corporate social responsibility programs for these communities. These stakeholders are important because they have an impact on how public perceives the company's products. Communities' priorities include support in development of infrastructure and development of society, such as schooling, childcare, and sustainable development. This approach enables Amazon's corporate social responsibility policy to have a far-reaching impact

in meeting the needs of communities as a key stakeholder in the retail marketplace. Amazon includes the stakeholder interest in its policies and think carefully about these interests while making decisions. The inclusion of customers, employees and communities in its corporate social responsibility programs are also the ethical strength of organization.

4: Corporate governance: A key indicator of Amazon's performance would be the long-term shareholders value that Amazon generates. Amazon's attention has always been on the long run, and as a result, it can make decisions and assess tradeoffs significantly from most businesses. As a result, shareholders must consider Amazon's underlying governance and decision-making strategy in order for equity investors to ensure that it is compatible with their investing ideology. 

Amazon main focus is on the customers.



Make ambitious financial choices based on long-term leadership instead of short-term profit margins.



Focus on cash: Amazon take the cash flows if Amazon have to pick between enhancing the appearance of GAAP accounting and optimizing the current value of potential free cash flow.

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Amazon is working hard to spend wisely and maintain Amazon culture: We recognize the value of instilling a cost-conscious mindset in our employees.

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Focus on hiring and retaining employees, Amazon prioritizes recruiting and retaining versatile and creative staff, and their salary is focused on substantial equity holdings rather than monetary rewards.

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The long-term objectives of shareholders are inextricably connected to the desires of our clients, according to Amazon. If Amazon does its job correctly, today's consumers will purchase more tomorrow, resulting in more customers, and this will result in more income and long-term profits for stakeholders.

5: Recommendations: Boost marketing campaigns, promotional events, and strategic advantages to cement market supremacy. Deal with global scandals in a strategic manner. Open physical stores outside of the United States to extend its small footprint. Improve its strategic entry into developing nations, where there are numerous growth opportunities. Boost Amazon's competitive advantages and widen the gap between it and its main rivals. Upgrade security measures to address counterfeit sales and cybercrime problems.

References About Us: Who we are. (2021, March). Retrieved from Amazon.com: https://www.aboutamazon.com/? utm_source=gateway&utm_medium=footer AMAZON.COM. (2018). FORM 10-K. AMAZON.COM, INC. Amazon.com. (2019). Amazon Annual Report. Amazon.com. Amazon.com. (2021, March). Mazon: Corporate Governance. Retrieved from Amazon.com: https://ir.aboutamazon.com/corporate-governance/default.aspx...