ITS - Individual Assessment (Amazon Prime Video Streaming PDF

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Amazon Prime Video (APV) Streaming Business Strategy (SWOT) Introduction to Strategy Individual Report

Executive Summary Strengths

APV's global reach is a strength since having customers from over 200 countries boosts not only brand awareness and international reputation, but also income and profits due to the company's larger customer base. Prime membership's competitive pricing strategy, value chain, and extensive service/product range add value by allowing Prime members to access Amazon's diverse range of services; in comparison to other streaming companies, where users must purchase separate memberships for each service.

Weaknesses APV's engagement in unethical business strategies and practices, such as APV's unfair use of third-party data, unjust treatment of employees, disregard for OH&S policies, failure to accommodate employees with disabilities and injuries, and reports of dangerous working conditions in their facilities, is a major CSR issue that inhibits consumer retention. Moreover, APV’s self-upload option is ill-advised because it allows amateurcontent comprising offensive, explicit, and misleading content that didn't match APV's user-friendly content criteria to flood the site, potentially harming the company's brand and integrity.

Opportunity APV’s most significant opportunities are third-party entry points. Greenspan (2019) examined that APV sees third-party entry points for their platforms, such as devices, smart TVs, and projectors, as a huge opportunity e.g modern smart TVs and streaming devices feature APV as an easily accessible app. Additional opportunities like interfacing innovative technologies to optimise streaming capabilities, such as 5G and cloud systems, provide chances for APV to provide optimal streaming services to its users.

Threats As more streaming services join the industry, there will be a strain on content and pricing. As a result, users are becoming increasingly dissatisfied with the difficulty of navigating the plethora of streaming options whilst keeping expenses in check. Existing consumers' "subscription Fatigue" is a major danger to APV, causing members to cancel their memberships. Additionally, cybercrime poses a threat to the organization's security and integrity, as well as consumer trust in the company. The switch to streaming has opened up a new, profitable assault route for cybercriminals, with cybercriminals using malware and programmes to steal user information.

Recommendations

● APV should incorporate the Corporate Social Responsibility (CSR) framework into their operations, to address unethical business practices and strategies surrounding employee treatment and exploitation of third-party consumer information. ● Amazon could integrate technological breakthroughs such as 5G technology into their streaming services, as well as third-party entry points for viewing their platforms on modern devices such as smart TVs, projectors, and mobile technologies. This can boost customer appeal by improving the quality and performance of their streaming services. ● It’s recommended that Amazon utilise its membership benefits to drive and market Amazon’s range of products and services. Prime-Video’s platform acts as a driver of Amazon's other products and services and a means of consumer retention e.g. enticing consumers to consume Amazons business extensions e.g. amazon finance, electronics and retail.

Table of contents

Executive Summary

2

Table of contents

3

Introduction

4

Analysis Strengths Weaknesses Opportunity Threats

5 5 7 8 9

Recommendations

10

Conclusion

11

References

12

Appendices Appendix 1A: Amazon Prime SWOT analysis

14 14

Introduction

Amazon Prime Video’s (APV) is a video-on-demand subscription-based streaming service, offered as either a standalone service or part of Amazon’s Prime subscription service which enables members to access exclusive shopping, discounts, and entertainment services. Prime members can access Amazon’s exclusive original films and shows. This report will examine APV through SWOT analysis and examine the company's strengths, weaknesses, opportunities, and threats to determine its capabilities and resources, and compare its performance to competitors’ performance (Johnson et. al., pp. 97). The SWOT analysis will enable APV to incorporate strategies and recommendations to address issues and enhance their business strategies (Johnson et al., pp. 97).

Analysis Strengths

APV’s strengths in the SWOT Analysis framework examines internal activities that contribute to the success of the organisation. (Kotha, 1998) noted APV’s extensive global presence is a strength, as having customers from over 200 countries enhances not only brand awareness and international reputation, but also revenue and profits owing to their wider consumer base. In 2020, APV gained over 150 million users (Gaikwad, 2020). APV’s primary strength is its “Amazon Prime” membership system, delivering a wide range of benefits with a single membership. Prime membership currently offers ad-free music, unlimited free, fast delivery, and APV’s streaming services. Prime-membership’s competitive pricing strategy, value chain, and extensive service/product range, adding value by allowing users to access Amazon's range of different services; in comparison to other streaming companies where users must buy separate membership for just one service e.g. Netflix, Disney Plus, HBO-Max (Bhasin 2020). Prime-Video’s high-flexibility applications and programs are considered a “strength” under SWOT analysis e.g. data saving, offline video accessibility adds value and flexibility for their members. This is beneficial for APV as this flexibility allows users to watch shows or movies from anywhere via the web or the APV’s app, even when offline. Additional benefits include the APV app’s ability to control data usage at the time of download and movie-watching on selected phones or tablets. Thus, the SWOT analysis allows Amazon to examine their strengths against competitors and enable them to plan improvement strategies.

Weaknesses Similarly, weaknesses within SWOT analysis are inherent features of an organisation, involving controllable, internal aspects such as resources, systems, and procedures that can be improved in the organisation and practices to avoid. APV’s involvement in unethical business strategies and practices is a major weakness that hinders consumer retention, pertaining to APV’s unfair use of third-party data. Gupta (2020) stated that unfair trading practices undermine confidence and expose businesses to legal liability. In the European Union, Amazon is facing antitrust charges for collecting and utilising data from third parties to compete against them. If found in violation, Amazon could face a punishment of up to 10% ($28 billion) of its 2019 yearly revenue. Additional weaknesses include the controversy surrounding Amazon’s unethical business strategies which will negatively affect amazons reputation. Yohn (2020) examined APV has faced criticism over the unfair treatment of their employees, disregarding OH&S policies, failing to cater towards employees with disabilities, reports of hazardous working conditions in their facilities, and a lack of covid-19 precautions. Alexander (2002) investigated that consumers negatively respond to unethical practices that affect their perception of organisations, deterring existing and potential consumers from the business. To mitigate the threat of controversy, Alexander (2002) identified that organisations like APV should implement strategies that target the areas of controversy, mainly focusing on increasing consumer satisfaction and quality ratings to recover Amazon’s consumer-perception (Go 2021). APV encourages people with video rights to self-upload using an automated system without first negotiating licensing deals with studios and major companies. Therefore, Amazon pays uploaders based on video views, incentivising them to use titles that are misleading and attention-grabbing (Molla, 2020). However, APV’s selfupload feature is ill-advised as this enabled APV’s platform to be flooded with amateur-content containing offensive, explicit and misleading content that didn't meet APV’s user-friendly content guidelines, which could adversely affect the companies reputation and integrity. Schwartzel et al (2020) noted that APV has failed to moderate third-party content, as members were exposed to explicit streaming content that goes against their user-friendly streaming policies. Additionally, Molla (2020) noted that APV’s business strategy allowing users to self-upload content devalues APV’s membership and congests their streaming platform. Molla (2020) acknowledged streaming platforms must balance between reaping the benefits of free user-uploaded material whilst also acknowledging that most of it doesn’t meet their standards.

Opportunity

Opportunities within the SWOT analysis are external factors that arise from situations outside of organisations, therefore, APV must identify and develop strategies to capitalise on opportunities including third-party entry points, technological innovations, and changing economic conditions. APV’s most significant opportunities are third-party entry points. Greenspan (2019) examined that APV sees third-party entry points for their platforms, such as devices, smart TVs, and projectors, as a huge opportunity e.g modern smart-tv’s and streaming devices feature APV as an easily accessible app. Additionally, opportunities include new technological innovations to interface with APV to optimise streaming capabilities, including 5G and cloud systems that enable APV to deliver optimal streaming services to their users. Furthermore, cloud-based video streaming is expanding the reach of video content, affecting market growth even further. The streaming service sector is predicted to develop the most in regions where digital technology has been widely adopted. Ruether (2021) identified 5G interfacing with APV will decrease latency, support mobile applications, and increase capacity for APV latency services. Although the economic recession of covid-19 has adversely affected many industries, the media-streaming industry has faced a dramatic increase in online streaming content consumption (Financial Buzz, 2020). Bain (2021) examined that APV is a large component of the broader prime membership, as a catalyst for Amazon's other products and services, as well as a means of retaining customers, thus, motivating consumers to use Amazon's business expansions. Bain (2021) observed that during covid-19, more than 175 million of Amazon's 200-million-plus Prime members around the world streamed shows and movies, with streaming hours increasing by more than 70% over the previous year. Bain (2021) noted, that APV’s should develop business strategies to transition APV members into other extensions of amazon services e.g. amazon finance and Amazon retail.

Threats

Threats of the SWOT analysis model consider external factors that reduce or limit business expansion and performance. Competition remains one of the strongest threats against APV, specifically other mainstream media subscription services such as Netflix, Disney-Plus, HBO-Max, etc. With ever-increasing competition, APV must implement strategies to differentiate itself from competitors. Streaming providers have taken considerable expenditures in gaining the rights to unique content e.g. both originals and existing programs to distinguish themselves to consumers (Go, 2021). Spnagler (2020) noted as more streaming services enter the industry, there will be a strain on content and pricing, thus, consumers are increasingly discontent in trying to navigate the flood of streaming options, whilst managing costs. A primary threat of APV is the “subscription Fatigue” of existing customers. Customers are forced to acquire several memberships to obtain their chosen content because different streaming services control distinct exclusive material. Therefore, the growing degree of subscription fatigue acts as a threat that may lead to subscription-cancellations. Spnagler (2020) investigated that prior to the pandemic, 20% of streaming video subscribers had cancelled at least one service in the previous year.

Cybercrimes threaten the security and integrity of the organisation, as well as consumer confidence in the company (Greenspan 2019). Go (2021) examined that the move to streaming has opened up a new, lucrative attack route for cybercriminals, e.g cybercriminals implementing malware to steal consumer information, Leaked passwords and usernames can allow cyber-criminals access to a variety of online accounts, and account-monitoring tools enables cybercriminals access to personal-accounts so they can sell access to them or steal the financial/personal information associated with them. Essentially, these external threats cannot be controlled by the organisation, however, Amazon can integrate strategies to minimise the organisational impacts.

Recommendations

It’s recommended that APV consider strengths, opportunities, weaknesses, and threats within the SWOT analysis to improve its business strategy and performance. APV should implement the Corporate Social Responsibility (CSR) framework into their procedures to address previously discussed controversy; including unethical behaviour surrounding employee treatment and misuse of third party consumer information. Taking social, environmental, and economic responsibility for corporate decisions and activities is referred to as CSR. It can act as an ethical guideline to prevent unethical practices and protects Amazon’s reputation (Johnson et al. 2017 pp. 125). Yohn (2020) concurred that APV can incorporate CSR programs such as employee feedback, allowing employees to have input into business decisions, increasing wages, better safety measures and protection of user information. To Amazon's advantage, employee retention and turnover will reduce as a result of improved employee treatment. As a growing number of consumers place value on ethical consumption and deliberately avoid shopping from unethical enterprises, Amazon's sales may also benefit as a result (Herman, 2020). Amazon should incorporate their streaming services with technological innovations such as 5G technology and interface their services through third-party entry points for watching their platforms on modern-devices such as smart TVs, projectors, and mobile technology. Ruether (2021) identified that streaming services like APV with standardisation of 5G Amazon can increase the APV capabilities to produce and deliver higher quality content; improving streaming quality by decreasing latency, cellular coverage, and improving battery efficiency. Falzon and Cammilleri (2020) identified increasing trends regarding individuals consuming media through digital and mobile online streaming services that are readily available through technologies such as smartphones and tablets. By adapting APV applications to third-party entry points devices and 5G technology, Amazon can improve the quality and performance of their streaming services and increase customer appeal. It’s recommended that Amazon utilise their membership benefits to drive and market Amazon’s range of products and services. Bain (2021) identified that due to the covid-19’s 2020 economic recession, more than 175 million of Amazon's 200-million-plus Prime members around the world streamed shows and movies. However, Epstein (2021) identified that Amazon intends to convert Prime-Videos viewers into shoppers, as APV’s platform will serve as a catalyst for Amazon's other products and services, motivating customers to use Amazon's business expansions, such as Amazon finance, electronics, and retail.

Conclusion

Conclusively, to develop Amazon’s company strategy, the SWOT analysis is a critical tool for business success as it enables Amazon to identify strengths, weaknesses, opportunities, and threats. Following a thorough examination of the business, it is strongly recommended that Amazon invest more in research and development to improve cost leadership, as well as integrate the corporate social responsibility model into their operations. This will help them stand out in the worldwide marketplace amid other large streaming competitors.

References

Alexander. C. E 2002, Consumer Reactions to Unethical Service Recovery. Springer Link. pp 223 - 237 https://link.springer.com/article/10.1023/A:1014086327876 Bain, M (2021, May 4), Prime has never been more important to Amazon. Quartz. https://qz.com/2004369/the-pandemic-made-prime-even-more-valuable-to-amazon/ Berzon, A,. Shifftlett, S,. Schek,. J,. (2019, August 19). Amazon Has Ceded Control of Its Site. The Result: Thousands of Banned, Unsafe or Mislabeled Products. The Wall street journal. https://www.wsj.com/articles/amazon-has-ceded-control-of-its-site-the-result-thousands-of-bannedunsafe-or-mislabeled-products-11566564990?mod=article_inline

Burdet, N (2021, June 21), What are the most valuable global brands in 2021?. Kantar. https://www.kantar.com/inspiration/brands/what-are-the-most-valuable-global-brands-in-2021

Bhashin, H (2020, June 16). SWOT Analysis of Prime Video. Marketing91. https://www.marketing91.com/swot-analysis-of-prime-video/ Davis, D (2021). Amazon’s profits keep rolling in even as sales growth slows in Q2. Digital Commerce https://www.digitalcommerce360.com/article/amazon-sales/

Epstien. A (2021 May 1). Amazon’s streaming audience is almost as big as Netflix’s. Quartz. https://qz.com/2003812/amazon-prime-has-almost-as-many-streaming-subscribers-as-netflix/ Financial Buzz (2020, September 14). New Technologies Help to Optimize Streaming Capabilities. Cision. https://www.prnewswire.com/news-releases/new-technologies-help-to-optimize-streaming-capabilities301129841.html

Gaikwad. A. (2020, August 10). Amazon Prime Video - SWOT Analysis. Linkedin. https://www.linkedin.com/pulse/amazon-prime-video-swot-analysis-avirat-gaikwad

Greenspan. R (2019, June 22). Amazon.com Inc. SWOT Analysis & Recommendations. Panmore Institute http://panmore.com/amazon-com-inc-swot-analysis-recommendations Gupta.S.K (2020, September 6). Amazon SWOT 2021 | SWOT analysis of Amazon. Business Strategy Hub. https://bstrategyhub.com/swot-analysis-of-amazon-amazon-swot/

Go, G (2021). The Video Streaming Industry: Competition and Exclusive Content. Essa http://economicstudents.com/2021/03/the-video-streaming-industry-competition-and-exclusive-content/

Johnson, G., Whittington, R., Scholes, K., Angwin, D., Regner, P. (2017). Fundamentals of Strategy (4th ed.). Pearson. Kotha, S. (1998). Competing on the Internet: The case of Amazon.com. European Management Journal, 16(2), 212-222. https://doi.org/10.1016/S0263-2373(97)00089-3

Ruether, T (2021, May 5), The Impact of 5G on Streaming. Wowza. https://www.wowza.com/blog/the-impact-of-5g-on-streaming

Spangler, T (2020, June 22). Streaming-Video Subscriptions Have Risen During COVID-19 — but So Has ‘Subscription Fatigue,’ Study Finds. Variety. https://variety.com/2020/digital/news/streaming-video-subscriptions-churn-covid-19-deloitte1234642672/ Schwartzel, E,. Shifflet, S,. Berzon, A,. (2020 January 24). Amazon Prime Video Gives Amateur How-To’s, Conspiracy Theories a Stage. The Wall street journal. https://www.wsj.com/articles/amazons-video-library-has-grown-big-on-amateur-content-11579792605

Appendices

Appendix 1A: Amazon Prime SWOT analysis STRENGTHS

WEAKNESSES

Brand Awareness: Amazon is the largest global

Bad Reputation: Amazon has a negative consumer

brand whilst Amazon Prime Video is the third-largest

perception regarding employee exploitation,

streaming service. Enhances brand aware...