Report on Amazon Inc

Document Type:Thesis

Subject Area:Business

Document 1

was established in 1995 as an e-commerce company (aboutamazon. com, 2018). The business has private online operations of selling a range of products but initially began as a book selling platform. Amazon is purposed to provide a range of products that are numerous and meets the customer’s preferences. Amazon SWOT analysis Strengths E-Commerce leader Amazon is part of the leaders in online retailing just behind Alibaba. Weaknesses Feeble operating margins The operating margins of Amazon have remained feeble for instance the operating margins of the company stayed at 3 percent since the mid of 2016 but went up to 3. 5 percent and in the first quarter of this year 2018, the operating margins were at 3. 8 percent (aboutamazon. com, 2018). Companies such as Facebook are recording operating margins of 45 percent with a wide difference.

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There is room for diversifying the brands to grow faster. The focus should be diversifying the technological areas that are critical and achieving growth. Threats Heavy competition There is stiff competition that Amazon faces in its daily activities in both the sectors of retail and cloud business. The levels of competition are very growing because of the massive e-commerce brands that are competing Amazon such as Bay, Alibaba, Microsoft, IBM and Flipkart among others. The physical retail brands are also inducing heavy competition with the entry of Wal-Mart and Costco. There are a set of rules, policies, and regulations that the many suppliers of Amazon must follow. The aspects facilitate doing business in an ethical manner — for instance, no forward integration.

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There is a high number of suppliers that are ever standby to supply various products to Amazon. Pricing at Amazon cannot be influenced by the supplier thus the bargaining power of the suppliers against the established Amazon is low. The threat of New Entrants: Low It is challenging to develop an online retail shop that can reach the current level of Amazon. Amazon products and services are obvious, and this makes it face the highest level of substitution. First time experience defines the loyalty of the customer. By the virtue that many people still prefer physically shopping makes the threat of substitution very high. Amazon’s pricing Strategy Amazon has a unique pricing strategy that crushes the rivalry as a result of the various adjustments and speed of doing business.

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