Analyze Amazon.com using the competitive forces and value chain models. How has it responded to pressures from its competitive environment? How does it provide value to its customers? a) Competitive forces analysis i) Entry of competitors It is easy for competitors to enter the market by establishing an e-shop and Amazon laid the groundwork for competitors (Flat World Business, n.d). However, Amazon has advanced websites and high brand recognition that other competitors may not reach its level.
Amazon Name Institution Date Amazon Executive Summary Amazon is a giant in the online retailing business. The organization’s strengths include the minimum structure and cost strategy, product diversity, a structured delivery system and its customer-oriented policies. The company offers clients a wide range of products at lower prices compared to its competitors. Weaknesses are large debts, product failure, tax evasion, reduction in margins and losses due to free shipping. Tax evasion gives Amazon a bad reputation; for this reason, some potential clients do not want to be associated with it.
Table of Contents Marketing Strategy Introduction: Marketing has become a major driving force for any business, and huge organizations have understood the importance of the same. The particular report will highlight on the key factors of an organization that are considered while devising the marketing strategy. The report will focus on Amazon, one of the biggest E-commerce companies across the globe. E-commerce has changed the way how people buy things and as the competition is increasing in the respective field it becomes important for a market leader like Amazon to focus on various factors to keep it going. The repost will focus on the market environment in which company operates through PESTLE analysis.
Wal-Mart 's dominating retail presence secures them a strong market position, while not classifying them as a specialty store. At all Walmart locations, consumer shopping needs are not limited. While offering low price alternatives, they make shopping easy and convenient for their customers. To encourage recurring traffic to Walmart locations they offer programs that ensure a 100% money back guarantee if you are not satisfied with the products you purchase ("Wal-Mart Stores Inc…"). In regard to their inventory turnover ratio, compared to competitors, they are able to cycle through their inventory faster than other major competing retail brands.
It will reduce the bargaining power of the buyers plus it will provide an opportunity to the firm to streamline its sales and production process. • By rapidly innovating new products. Customers often seek discounts and offerings on established products so if Twitter, Inc. keep on coming up with new products then it can limit the bargaining power of
• Weaknesses and Threats (WT) – How can weaknesses be minimised and threats managed? Part IV: Concentric Diversification strategy This strategy uses their technology expertise, to create value being the ‘lowest cost, customer-centric, online market. This policy proved good as it helped organised their customers (B2B & B2C) as well as activities, securing their cash flows to crisis. But the huge investments for it can be risky, due to low profit margins and sales reduction can cause effects on cash flow or new technology investments. Conclusion Amazon.com has been strong and steady since its foundation.
Amazon’s competitive strategy is cost leadership. Amazon has achieved a lot on a great scale that it gets the best prices from its vendors so they can operate in very flexible and thin margins and sell their items easily at retail prices and make money. They also provide shipping products for a reasonable cheap price. They also have improved their warehouses by giving some space to other sellers who want to sell their items through Amazon. They differentiate and provide better quality than their competitors across the industry.
They are the prominent general retail stores with a physical presence. Both of these retailers have emerged as e-commerce centric due to the early adoption of e-commerce strategies. However, even those retail chains proved to be of no use to generate a tight competition with Amazon. In the long run, the growth of the e-commerce versions of these supply chains can pose a threat to Amazon. (Wahba, Phil) Advantages for an Amazon Customer Amazon adds value for money for the customer.
The weaknesses demonstrated by Amazon to acquire Whole Foods for 13.7 Billion are disadvantages where Amazon can improve. Firstly, Amazon has made a considerable financial investment to acquire Whole Foods and will limit their ability to purchase more assets in the future. Second, the acquisition will hurt the corporation’s ability for quality and quantity control. Lastly, since Whole Foods is solely an Organic Food store, there are limited suppliers in the industry and can become a problem if proper precautions are not taken. Overall, with purchasing Whole Foods, the organization will experience a hit financially, quality and quantity control for satisfying their consumers and the limited suppliers of Organic products in the grocery industry.
(Hart) What he envisioned was not playing out like he wanted. With more available floor space, McCollough intended to remodel 140 stores, but was forced to decrease to 20 to 25 stores instead. The time and effort it would have taken to renovate 140 stores would cost the company $1 million dollar per store and this was not a price the company was able to pay. Unlike in the 90s, by 2003, the company was not profiting and the sales reduced so to save money, Circuit City set out to lay off 3,900 commissioned workers, which accounted for 60% of the company’s sales associates. (Hart) These employees would be rehired, but paid on hourly wages.