Strategic Profile and Case Analysis of Amazon Presentation

Environmental and Industry Analysis of Amazon
By Pride comes nothing but strife,
But with the well-advised is wisdom.
Proverbs 13:10
Amazons vision: To be Earths most customer-centric company, where customers can find and discover anything they might want to buy online.
Amazons mission: To serve consumers through online and physical stores and focus on selection, price, and convenience.
Get big fast was the motto of Jeff Bezos, the founder of Amazon. On July 16, 1995, Amazon officially opened for business as an online bookseller. It only took one month for the retailer to have shipped books to every U.S. state and to 45 countries. By 1998, Amazon morphed into the colossus e-commerce business that we know it for today, Amazon extended beyond books and started to sell music CDs. By 1999, they sold products such as electronics, tools, and toys and during that same year Amazon had shipped 20 million items to 150 countries around the globe. In 2015, Amazon surpassed Walmart as the worlds most valuable retailers. Two decades later, after its inception, Bezos remains at the helm, and the companys market value is at $250 billion. Amazon has truly helped revolutionize the way people shop. ( Editors, 2015)

External Environment and Five Forces of Competition
Political Factors
Amazon is a U.S. based company located in Washington. They have a number of worldwide marketplaces that they operate such as Amazon United Kingdom, Amazon Australia, Amazon Spain, etc. Since, their operations are across many countries they can be affected by the political environments in each country. Governmental support for e-commerce can have a major effect on how the company is run, which can be seen as an opportunity and a threat (Marketing10, 2020). Political stability of other countries can be seen as an opportunity for Amazon to expand and offer services in that country. Another external environmental factor that can affect Amazon Inc. is cyber-crimes. Increasing governmental efforts on cyber-security is an opportunity. (Farooq, 2019).
Economic Factors
Since the breakout of COVID-19 and the worldwide pandemic lockdown, Amazon was able to provide customers products that they needed, shortly after it was needed. They were able to efficiently address the customers’ needs in providing them with their essential needs, movie and show streaming, among other entertainment opportunities while millions were stuck home. Something that can affect Amazon is an economic recession. This means that the disposable income that a household has is less, and they will be less likely to spend their money. However, a booming retail industry creates opportunities for Amazon and their competition. This means that retailers such as Ebay and Walmart are fighting with Amazon for their customers.
Technological Factors
Since Amazons business is online based, they rely on technology to keep them in operation, and all technological advancements directly affect Amazon. Given that technology is constantly changing, there is always a threat that their platform could become obsolete, yet this can also be seen as an opportunity. It is important to recognize that the ever-changing technology increases the efficiency of IT resources and is another opportunity to the company. The real threat to the company is the ever rise in Cyber-crimes. In order to combat cyber-crime, Amazon will want to make sure that they are continuing their improvement in technologies to help stay on top of the ever-changing environment.
Social Factors
With the constant changes in the world, there are plenty of people who no longer want to leave their home to go make purchases. Amazon allows their customers to shop from the comfort of their home, and have their items within 2 business days. Although to some this can be seen as lazy, younger generations love having the power to purchase the items that they need with a click of a button and have it delivered. This means that there is an increase in online buying which is both a strength and opportunity, and with an increase in online buying in developing countries creates another opportunity. Although, there are people that are becoming more and more concerned with the impact of online shopping and the impact it has on human communications, which can be seen as a threat.
Environmental Factors
There is an ever-increasing popularity and urge for people and companies to have a low carbon footprint, here Amazon has many opportunities to grow and continue to be on the top. Also, there is an interest in environmental programs. People are looking to lower the waste and energy consumption of companies for future generations. With the increasing popularity of low carbon foot-printing, Amazon can implement an energy-saving policy for its company that will help lower the carbon footprint of the company which shows their customers that they are caring.
Porter’s Five Forces
Threat of new entrants: This is a low force.
Even though it is easy to start an online retail website, it is hard to take on a giant such as Amazon. Especially when Amazon has made it their goal to have the best customer experience, which instills customer loyalty. Amazon is known as one of the largest online retail markets in the world (Marketing10, 2020). Since they are known as the number one retail market, and their customers are loyal due to the amazing customer service and better prices on items that they can purchase, it is extremely likely that Amazon will remain on top. Amazon needs to continue to make their customers their focus and continue to provide the products that their customers are seeking.
Bargaining Power of Buyers: This is a strong force.
Amazon is known as the online marketplace that offers anything the customer is seeking. However, the buyers can purchase directly from the companies that are offering the products as well. For example, if a customer would like to purchase an item that is on Amazon but provided by Walmart the customer will move over to Walmarts site and purchase the items there. Amazon needs to consider that customers are fickle and can go to another companys site to purchase the products. This is a major factor in addressing business challenges in the online retail industry environment for all marketplaces (Greenspan, 2019).
Bargaining Power of Suppliers: This is a moderate force.
Amazon relies on the suppliers to provide them with the products that they sell on their marketplace. Without the suppliers Amazon would not be able to meet the needs of their customers. Many suppliers are willing to work with Amazon so that they have customers that purchase their items. If Amazon sells an item that only a select/small amount of suppliers manufacture, then the suppliers power will increase moderately since there is less competition for the suppliers. Based on the analysis bargaining power of the suppliers is moderate since there are multiple suppliers that Amazon could use.
Threat of Substitute Products: This is a high force.
Not only does Amazon compete with Brick-and-mortar companies that sell items similar to their products, or substitutes, they must also compete with online retail marketplaces that also offer substitutes and sometimes at a lower cost. This ties in with the bargaining power of the buyers. Buyers have the opportunity of looking up an item that they would like to purchase on Amazon and one of their competitors that offer a substitute to the item on Amazon. Since the switching price is low, Amazon must be aware of this and give the customers the best experience so that customers choose them instead of the competition. One bad experience and that customer will go to their competition and then tell their friends. Amazon needs to highly focus on the customer experience to keep customers on their site.
Rivalry Among Existing Firms: This is a moderate to high force.
In the online retail marketplace, there are multiple competitors that Amazon competes with. In the last few years many companies have seen the benefits of online retail that they have started selling their products online. Here the low switching costs from moving from one competitor to another and then the substitutes that are offered from others puts the pressure on Amazon to make the sale. Some of Amazons main competitors are Walmart, Target, Ebay, Flipkart, and many more (Marketing10, 2020). Because of this Amazon invests in the customer experience and provides high quality of products at a low cost to their customer. This helps them gain the advantage on their competition.
Analysis of the External Environment and Five Forces of Competition
Based on the external environmental scans Amazon to maintain the number one spot in the online retail market world the need to continue making the customer service experience the best they can. They also need to continue to work with suppliers that offer high quality products at a low cost. This will ensure that customers will continue to come to their site to purchase their items instead of going to their competition and purchasing substitute products. There is also room for Amazon to grow if they keep watching countries that are developing. Also, since the COVID-19 pandemic, most customers are willing and wanting to stay home, they are purchasing all of their needed items online. This is a great opportunity for Amazon to continue to evolve and grow. Amazon will also need to continue to make sure that they are staying on top of the technology changes. A big item that they need to maintain a high alert on is cyber-crime. Keeping their site free from cyber-attacks will give their customer peace of mind that their information is safe.
Concepts to Research
Sector Growth
Amazon, the multinational giant, has a significant opportunity in sparring sector growth because of its strength and core competencies that help it obtain operational and competitive advantages over other firms within the same industry. According to the Fortune 500 Global Company Ranking, Amazon is ranked third among the largest companies in the world in terms of employee growth, revenue, and market capitation (Feldman et al., 2018). In 2018, Amazon Com Inc showed a respectable 43.59% annual rise in revenues in the fourth quarter of 2020. This was compared to different performances of services favored by the economic environment by 38.59% improvement in the Internet, Mail Order & Online Shops industry, and 9.15% growth in the Retail sector (Feldman et al., 2018). According to the latest earnings of the multinational release, the electronic commerce behemoth created more than 500,000 new jobs in 2020, adding to the basket of the sizable workforce hence sparring sector growth and development (Feldman et al., 2018).
Service Costs
The determination of the service costs is different from that of commodities whose prices are determined by the interplay between demand and supply. As an international giant, the company focuses on e-commerce, digital streaming, cloud computing, and artificial intelligence (Feldman et al., 2018). It is possible to determine the price of services by adding the total costs and replicating them with the desired profit margin percentage. This amount is added to the costs and remains a significant element in determining the service costs, especially for the technology companies such as Amazon (Feldman et al., 2018). Furthermore, it is critical to consider charges, market, and the perceived values in terms of time invested in coming up with a fair share of the profit margin.
Emerging Markets
The fact that the international technology giant started operating globally has not depleted its market to obtain the most significant market share. The existing markets are covered by 37.2%, of which the essential proportion is allocated to the local united states market and few other market markets in the surrounding market segment (Feldman et al., 2018). The emerging market of Amazon is likely to be in the Asian continent and specifically to the gulf nations such as Dubai, the United Arabs Emirates, and Saudi Arabia. Some of the immediate emerging markets were China, Brazil, India, and Indonesia. The penetration in these new markets will increase the revenues dues supported mainly by the UK, Germany, and Japan, accounting for more than 80% of Amazon’s total international revenues (Behrend et al., 2015).
Macro Trends
Amazon is one of the leading distributors around the world, though the past financial year they have increased revenues 10x. This can be attributed to the global pandemic that hit us in the past two years, (Costa, 2011). Consumer goods were preferred to be delivered rather than being bought at in-person stores. This is because of the hazardous risk of contacting the corona virus disease.
The improvement in the technological sector has been one of the macro trends visible in Amazon. In recent years, Amazon has improved on the user interface and the usability of their websites. They have developed both android and IOS applications that help improve the customer interactions with the company. In collaboration with Google and Facebook, Amazon has been able to customize the search engines of users, so that what they have been looking for in the recent searches is always displayed in the form of adverts or appears on the homepage of the applications and websites. This improvement in technology has led to an increase in users and as a result contributes to a significant increase in the levels of revenue that Amazon generates.
The improvement in technology shows expansion by the company. Amazon can now operate in countries across the globe. It is recognized for its impeccable services and thus consumers around the world have been surveyed to prefer Amazon over other local distributors, (Costa, 2011). As it operates in different countries that are governed by different tax rates, they are always obliged to submit or rather file their returns, this increases the amount or revenue that the government accrues, and thus leads to an improvement in industrial development in the country.
In this light we can also talk about the trade agreements that different countries have with the parent company of Amazon (United States of America). In order for the company (Amazon) to have successful business in a different country, the United States of America should have clear agreements on how to conduct trades (Hampf, 2020). Although, most of the time, this is solved with the trade agreements that are set out in the United Nations rules.
Amazon continues to increase their number of employees due to their magnificent expansion, from the senior managers down to the local distributors. This has led to the growth in sustainability development and improvement in the lives of individuals that are employees under the Amazon payroll.
Impact of Trends and Issues on Corporation
It is necessary to understand the positive and negative impact that these trends have on corporations. In order for the corporation to turn a trend into a monetizing and value-creating competitive advantage, it is necessary to develop a strategic plan that measures the impact of the trend. The trend will have a positive impact on the corporation if it is in alignment with the overall vision and mission statements. It should also allow the company to have a competitive advantage amongst the other companies within the industry. For Amazon, the economic trends of stability and increasing the disposable income among all the employees affect the corporation in that it increases the likeliness of success within the company. It also allows there to be expansion in the retail business. With increasing disposable incomes, this allows there to be growth activities for Amazon in developing countries and will boost the companys financial performance overall (Greenspan, 2019).
The sociocultural trend of increasing consumerism in developing countries allows there to be more opportunities for Amazon within e-commerce and Informational Technology sectors. This increase of consumerism allows there to be intensive strategies used for growing the company, allowing for market penetration and the company being able to expand to new regions throughout the world. Also, Amazon partakes in the environmental trends of rising interest in environmental programs, rising emphasis on sustainability of business and increasing overall positivity on lifestyles that are low-carbon. In other words, Amazon focusing on improving their environmental impact does strengthen their brand image and influence their customers to also make a positive impact on the world (Greenspan, 2019). For example, Amazon has completed the hosting of 50 solar systems on sortation center rooftops, as well as allowing there to be corporate solar facilities on-site. Furthermore, the increasing popularity of low-carbon lifestyles provides opportunities for the company to boost its corporate image as a leader in the e-commerce industry. For example, in India, there is the Packaging-Free Shipment program in over nine cities, which helps the country in reducing waste overall by using reusable crates to ship the items without carbon associated with them (Ray, 2021).
Amazon follows the technological trend of using information about their customers behaviors in order to make predictions and forecasts for the future. The company gets people involved by putting a focus on the application/website being easy to use and that there are quick delivery times. With more customers using the website, this allows more people to be okay in accepting cookies and trackers to obtain and use their data for the good of the company. These trends allow the company to have a competitive advantage compared to the other companies within their industry (Ray, 2021).
Impacts of Trends and Issues on the Business Unit
It is the goal of every business company to make profits and remain outstanding among other companies. For this reason, many companies always try to remain up-to-date. Meanwhile, companies consider using trends in order to achieve the set goals of a business. Actually, Amazon Company has become a multinational giant business by incorporating current trends and issues in its business units. There are many trends; however, the significant and common trends Amazon Company business units have preferred include cloud computing, mobile apps, big data analytics, automation, artificial intelligence, augmented, innovative technology, and virtual reality. According to Moser (2021), these trends and issues have impacted the performance and success of this multinational company, although there is a degree of variation in the effect caused by each trend. Furthermore, Amazon Company sought to use these trends to evolve services and products to cater for customers’ needs.
One major trend that Amazon company business units found significant to their business goal is using Artificial Intelligence. The use of artificial intelligence has increased the company’s rewards in terms of brand reputation and its visibility to its intended customers. For instance, the company reduces costs to influence more sales when required and simultaneously increases prices when the demand is high (Moser, 2021). As a consequence, this algorithm enables maximizing sales and revenue automatically. However, initially Amazon Company used automation where it would pick, pack and ship someone’s product to a customer and also handle some of the customer’s needs. This impacted the company negatively, thus terming it losing out profit trend. This is because the automation required one to lose large profits to let another person manage Amazon business.
Another important trend Amazon Company applied is innovative technology. The trend focused on building the Amazon store. This trend was meant to drive shopper engagement with a customized end to help customers learn more about the brand. Additionally, the use of the Amazon store benefited customers as it was a free self-service. In addition, the use of URLs helped customers access products on the Amazon store easily, thus increasing purchases. Still, the Amazon Company business units sought to use search engine optimization (SEO), which meant that customers would research extensively, set target keywords and adjust the product list. This helped the customers to develop a strong relationship with a brand in the business, thus securing more favorable and long-term arrangements for the purchase (Moser, 2021).
Moreover, the Amazon Company sought to use virtual reality and cloud computing to improve customer personalization. Customers have freedom when using cloud computing as their needs are taken care of (Moser, 2021). This has shown a significant impact, especially during this time of the COVID-19 pandemic. For instance, the Amazon business units are still experiencing a nearly similar number of profits as customers can still purchase products without stepping out of their houses. However, the Amazon Company has posed a threat to other industries such as retail, grocery, and even food delivery due to virtual reality and cloud computing. Besides, Moser (2021) notes that the use of mobile apps and big data analytics have, in reality, improved customer personalization by allowing them to get services through the internet in their comfort zones.
From the research, integrating trends and issues in a business can yield profits. The trends make a business unit remain up-to-date. As seen, Amazon Company has remained competitive through the use of some useful trends. As a result, it is regarded as a multinational giant.
All in all, Amazon has had a great strategy and even better momentum to drive more sales and retain their customer loyalty. Amazon has not always been perfect though, the company has tried to implement practices of automation where they learned that it could be detrimental to its profits and if anything went wrong, to their customers satisfaction. They have wanted to innovate in other aspects with their concept of the physical Amazon store, a complete self-service grab and go store. Although the concept is amazing and could work well, various research needs to be completed before the company wades into this near venture. Given how fast they got to where they are now, it would come to no surprise that they perfect this store and make it a reality. They have already had Amazon pickup lockers at stores such as Whole Foods and the customer satisfaction and ease is exactly where they targeted. Amazon needs to ensure that they continue using their tried-and-true customer service practices in order to maintain their customer satisfaction level, so that the customers remain loyal and not jump to their competitors. Given that they are online based, they need to continue having the latest technology to ensure that they and their customers are safe from cyber-crimes. Since they are doing business internationally, they must also ensure that their e-commerce and trade policies are in their favor to continue to have such a broad customer base and marker. Amazon must continue to focus on their pricing, selection, and convenience in all of their marketers to remain at the top of the most valuable and preferred retailers.

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Green Team – Thank you for your assignment. Your LopesWrite percentage is low.You included the sectors of the external environment and the five forces of competition, concepts to research in each category, macro trends related to the research concepts, impact of the identified trends and issues on the corporation, impact of the identified trends and issues on the business unit, and an assessment of the relevancy of trends and the impact on the overall company. The points are supported with in-text citations. There are paragraph transitions present, logical and maintain the flow throughout the assignment. Overall, your assignment is clear and easy to follow and the tone is appropriate for formal academic writing. The sentences are complete, clear, and concise. In general, your sentences are well-constructed. The assignment included a title page and reference page. There are APA errors throughout the assignment. I suggest that you follow the APA Style Guide. Make sure to spend more time with the APA guidelines found in the APA Style Guide, located in the Student Success Center, to polish APA skills with font color, line spacing, indenting, in-text citations and listing references. APA Style uses headings to separate and classify assignment sections. The assignment is laid out with effective use of headings. You have some grammar and word choice errors throughout the assignment. Thanks again for your assignment. Best Regards, Ed Miller

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