IFAS Amazon PDF

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IFAS for Amazon...

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EXHIBIT 2 INTERNAL FACTOR ANALYSIS SUMMARY (IFAS) on Amazon

Internal Factors

Weight: Rating: Weighted Score

Comments

Strengths: S1: Strong Brand Name

.10

4

.4

Over the years, Amazon.com has been the leading firm in the online retail world. Their rapid growth of the business is mainly considered because of the brand recognition and confidence among the customers (Greenspan, 2019).

S2: Strong Financial Position

.15

4

.6

A strong financial position is another strategic competence that helps the company to accomplish different opportunities in the industry. According to the author Samuel (2019), “Amazon’s net profit for the year 2017 was $3.033 billion with an asset base of $131.31 billion”. Their strong financial position has indeed helped the company to boost itself up in the online retail sector.

S3: Customer Oriented

.20

4

0.8

The company is highly customer oriented and has the best CRM system. Amazon has a complex CRM system that helps the continual flow of details between the company and its customers. Also, the company has been advancing in the information communication technology to improve their CRM which helps the company to get back to the customer’s on time and enhance their service delivery (Samuel, 2019).

S4: Delivery on time

.15

4

.6

There is no company like Amazon in the retail world, who tends to deliver the product in the same day. Their fast delivery service is the main reason to attract the customers. In some areas, the company makes deliveries without the fees due to the ability to minimize distribution

Internal Factors

Weight: Rating: Weighted Score

Comments cost or the 2 days maximum time.

S5: Cost Leadership and Diversification

.15

4

.6

Cost leadership and Diversification is also the main internal strength of Amazon. Amazon has been continuing its business on thin profit margin which allows the sales maximization and allows competitive pricing (Samuel, 2019). Some companies’ beliefs in high- profit margin and some in low. And Amazon comes under those low margin companies and is the reason for their popularity. Likewise, the company also manages as a supplier of consumer electronics, online retail services, brick-andmortar services, including cloud-computing and other various services (Greenspan, 2019). It has been a common ground to buy all the products from one provider.

Weaknesses: W1: Narrow profit margin

.15

1.0

.15

The result in decreasing profit margin can hollow the company’s solid financial position. In a big country like India, the company has been losing their profit, which elevates the question of sustainability of thin profit margin (Samuel, 2019). The low-cost advantage has been a rising threat due to the increasing competition.

W2: Imitable business model

.05

2.0

.1

We cannot deny that Amazon has an easily imitable business model. For example, there are other companies like eBay and Alibaba that sells the same product as Amazon including the Barnes & Noble for Amazon’s Kindle.

W3: Limited Brick-and mortar presence

.05

1.0

.05

The company’s limited brick-and-mortar appearance is a blockade for the growth in the non-online market which means Amazon owns very limited physical stores and

Internal Factors

Weight: Rating: Weighted Score

Comments sometimes it repels the customers to buy products which are not available online (Greenspan, 2019).

Total Scores: 1.00

3.30

Here the overall score is (3.30) which is greater than (2.50). This indicates Amazon has strong internal performance that surpass its weakness.

Reference: Greenspan, R. (2019). Amazon.com Inc. SWOT Analysis & Recommendations. Panmore Institute. Retrieved from: http://panmore.com/amazon-com-inc-swot-analysis-recommendations Samuel. (2019). Amazon Internal and External Analysis and Strategic Options. Blue Ocean Outsource. Retrieved from: https://blueoceanoutsource.co.ke/amazon-internal-and-external-analysis-and-strategic-options/...