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AMAZON.COM: SWOT Analysis Paper

Brief Company Profile

            Sourced out from a simple desire of making good money out of the benefits gained from innovative technology, Jeff Bezos gave birth to a company now known as one of the online giants of e-commerce industries, Amazon.com. When the name Amazon.com comes to mind, it is most often than not related by online users to the keywords ‘online bookstore’, ‘online resource’, or simply ‘online store. Defining the capacity of the internet to host new industries such as the process of gaining and selling products online, Bezos intended to introduce a new source of shopping convenience to modern users of the internet. At this point, he redefined the conditions of internet usage to which the society has been used to recognizing. In relation to this, he also provided a larger window that modern entrepreneurs could further explore. Relatively, such innovative approach to business operations and consumer relations brought about a revolutionary condition of development in the field of modern business industries. In the discussion that follows, a SWOT analysis of the overall operation of Amazon.com shall be given particular attention to.

Strengths

  • Standing as one of the pioneers in the industry of online entrepreneurial companies
  • Has strong command on finance and staff management procedures
  • Experience in the industry as one of the primary players in the business

As mentioned in the three primary points considered herein, it could be realized that being a pioneer in the industry the business is enjoined with is one of the main reasons why the company continues to ‘rule’ as one of the top players in the online industry of ecommerce. Not to mention the fact that it has already established both its brand and its reputation in serving clients from all over the globe ever since it was first established in 1995.

Since the founder, Jeff Bezos, had several years of experience in working for Wallstreet, he knows how important it is to first manage the finances of a business before the entire organization could actually be considered a success. As a result, strong management of finances has been adapted by the company allowing them to pass through the different phases of financial crisis in the industry and in the international field of business development.

Strong management of staff members who work both in the headquarters of Amazon.com in Seattle and in other remote areas around the globe also is considered as a key to the success of the company. Relatively, being able to create a connection between these workers amidst the distance that they gave from each other is an amazing bond that the organization could actually be proud of.

Weaknesses

  • Poor assimilation of competition

In the aspect of competition, while Amazon.com remains at the top and its closest competitor Barnes and Noble remains at the edge of the position, it could be realized that new comers will always try to take on the challenge of making a name in the industry thus taking the place of the company. IN relation to this, it could be assessed that because of its position, Amazon.com may not be that tough especially when it comes to withstanding tight competition from worthy opponents in the industry which may not be evident at present, yet could be crucial in the future operations of the business.

Opportunities

  • Bringing about innovative ‘firsts’ in the industry of online selling
  • Catering to newer and larger markets

Being the pioneer, bringing about innovative conditions of connecting to business allies and of course the customers is a primary source of competence on the part of Amazon’s process of affecting its market. Relatively, catering to a new and larger market becomes a source of confidence when it comes to establishing the future of the organization. This however would mean investing on business allies outside the limits of the internet. Establishing close relationships with companies that offer other products other than books is an essential part of the process.

Threats

  • Incoming aspirants of the industry
  • International and local online stores entering the field of online business operations

As mentioned earlier, the online industry remains open to new comers. In fact, it continues to encourage new entrepreneurs to register and create their own companies in the online portals every day. So far, about 1000 entrants each month adds up to the list of online companies that become successful in serving online consumers. It is expected that when a strong candidate in online business development comes in, Amazon.com’s business platform could be challenged and if the company remains as calm as it is right now, it may not be able to withstand such competition. Hence, it is strongly advised that the company incur several points of preparatory operations so as to make sure that incoming competitors would not be able to penetrate the successful system that the business is already dependent on.

Other helping analysis procedures could help define the position of Amazon.com in the industry today:

STEEPLE

Social Amazon currently embraces the aspect of online operation fully and is going through with the trend of online shopping; so far, the new market of modern consumers accepts such a trend and thus providing more strength for the organization.
Technological Innovations on accepting payment online should be improved to make sure that a larger market could be served by the business. This also includes the need to improve the process of communication and transaction with the consumers with the aim of increasing both confidence and satisfaction of the market being served.
Economical The current standing of Amazon.com in the market is looking pretty fair in comparison with its competitors hence suggesting that it continues to have a successful economic standing in the industry as an intact business organization online.
Environmental Given that the procedures of operation and transaction with consumers are handled online, the environmental impact of the business’ operation is considered effective and specifically helpful in the process of improving its environmental competence.
Political Given that the operation is global, entering other nations or regions through parcel is considered to boost up the business of other local locations hence improving the business’ political relations with other trading nations in the industry.
Legal Legally transacting online is a huge concern that identifies with the operation of the business and thus should be given extra care by the operators.
Education and Employment The staff members hired by the organization are usually computer savvy and are thus required to have good skills in computer operation as well as customer-relations function.

POTTER’S FIVE FORCES

Buyer Power Meeting with the international requirement of being reasonably priced, Amazon.com is challenged with the need to make its prices relatively reachable and reasonable for the international market.
Supplier Power The suppliers of Amazon.com are considerably won through agreements and are thus conditioned to cooperate with the organization through alliances and contracts.
Threat of New Entrants Gearing up for open competition in the industry is vital to keeping the winning position of the company. To do so, the managers of the business should undergo constant research and study of the market trend.
Threats of Substitutes With new entrants coming into existence, substitutes to the company also becomes possible. To avoid such instances, constant innovation is necessary.
Competitive Rivalry Currently, the strongest competition of the company is that of Barnes and Noble. The positioning of Amazon however assures it of a good chance of retaining its competitive edge against the other.

Conclusion

Every successful business organization needs to be strong enough not only to handle current sources of pressure but to prepare for more future challenges from within the industry and from the market that it tries to serve. What makes a business really successful is its capacity to withstand tests, trials, and emergency situations that could bring down its defenses with all confidence in facing current and incoming competition as a whole. Turning on the process of development in the case of distinctively defining the condition of business’ foundation creates a stronger platform that companies like Amazon.com could depend on at present and even towards its future endeavors.