Amazon Company Marketing - Case Study Example

Name: Date: Institution: Amazon Company This is an American cloud computing and electronic commerce company. It was founded by Jeff Bezos in the year 1994. Initially, this company operated as an online bookstore. It later diversified and started selling the following products; CDs, Blu-rays, DVDs, video downloads, MP3 downloads, apparel furniture, jewelry, video games among many products (Rodrigue et al. 2007). This company operates through the following segments; international segment, North American and Amazon web services (AWS). The North American segment is involved retail sales of consumer goods. This segment has various websites that the customers can subscribe through which include; www.amazon.ac, www.amazon.com, www.amazon.com.ix. The international segment on the other side is involved is similar services as the North American segment but having different subscription websites such as www.amazon.com.br, www.amazon. fr, www.amazon.cn , www.amazon.it among other websites. Finally, the AWS segment is composed of sales of storage, computing, database and other services for government agencies, business enterprises, and academic institutions (Peña-Vinces, Cepeda-Carrión, & Chin, 2012). The company is also involved in offering services such as publishing; data base offering, fulfillment, advertisement services, digital content subscription and co-branded credit cards. The company ensures that the customers are served through their well-developed websites. It lays it the focus on pricing, selection, convenience service delivery. The company’s website is designed in such a manner that customers can access them directly and this enables the company to sell millions of products. Amazon Company has been in a position to expand its market share. This is because it built to operate in different countries such as; New York, Maryland, UK, France, Italy, Canada, India, China, Brazil, Australia, Spain, Mexico, Germany among other countries. In the last decade, consumer electronic has become a crucial part of Americans day-to-day routine. This is because, of the high demand of the following electronic products; computers, smartphones, tablets, digital cameras, laptops, smart TVs, camcorders, printers among other electronic gadgets. Market size has been increasing over the recent years. This is because the middle-class has been greatly changing their lifestyles preferences. Due to this factor, the market of consumer electronics has shown a great improvement in the last few decades. Apart from the change in consumer preferences, there is a high need for internet use. This has therefore increased the demand for electronic devices so that individuals can access the internet. Amazon Company has therefore improved its services ensuring that the demands of their customers are met within America. It has also built a high customer experience ensuring that they can access these devices their website. The use of internet has been embraced in different areas such as the social media, academic research’s, advertisement among other crucial activities.in the consumer electronic market, the popularity of wearable electronic devices has increased as a result of urbanization and the change in consumer lifestyles. The recent market of electronic devices is also expanding due to the fact that consumers are interested in the benefits associated the to the wireless connectivity of electronic devices. Developing regions are also adopting the use of such electronic devices and this has increased the demand for the following products; kitchen appliances, intelligent security systems, HVAC systems, and mobile phones. In America, consumer electronic market is segmented into three basic segments basing on the type of devices. These segments include; wearable devices, consumer electronic device, and smart home devices. Smartphones and PCs are the key consumer electronic devices. Their popularity and demand have been increasing each day. This is because of their affordability in terms of cost and their portability nature. They have also been used in different sectors such as academics, travel, and tours where one is in a potion to book accommodation through smartphone apps. There is a high competition in the global consumer electronics market. This is because new international brands are established and the number of new entrants increasing each day. in order to ensure that companies remain competitive in the industry, companies are merging so that they can have a large market share. The companies are also considering manufacturing of cost effective and innovative products. SWOT analysis table Strength Amazon is the leading online leading retail in the world. It has developed three strategic thrusts which form its strength; cost leadership, focus, and differentiation. This has made the company to gain a lot of revenue making its shareholders enjoy high returns. The company has been recognized by many customers as the best global online company. This recognition by global customers have enabled the company to have a great market penetration even in economies where other e-commerce were out of bound The company has a high competitive advantage compared to its rivals. This is because it is in a position to use IT and e-commerce platforms easily. The effective use of these platforms ensures that the company is ahead of its competitors. The company has superior distribution and logistics systems. This enables the company to actualize customer fulfillment. This ensures that the company wins customer loyalty and therefore, it remains more competitive compared its rivals. The company has a strong brand, high revenue, and an extensive product mix, due to the extensive product mix; customers are in a position to find what they need on the company’s website. The company is also in a position to invest in new business ventures that arise in the market due to the fact that it has huge revenue. weakness The company provides free shipping to its customers. This is a good customer service; however, the company is at risk of losing its margin and as a result of this strategy and it is not able to optimize cost. The company operates at a near zero profit margin. Though the company has high revenue, operating under very low-profit margin does not translate to meaningful profit to the company. Amazon’s business model can be imitated easily; it has limited penetration to developing economies. The company generates much of its revenue from the developed countries such as the USA. It would face a lot of challenges to get into the developing markets and start competing. Since the business model is easily imitable, potential competitors are likely to arise and compete in the online market. opportunity The Company is in the attempt to have its own monopoly. Due to the increasing e-commerce market, Amazon will be far much ahead of its competitors. The company has the ability to expand their grocery sector as they keep the foods fresh and this will increase their costs. The number of customers purchasing their groceries online has been increasing each day and therefore this would be a good sector to dominate. The company has the ability to penetrate developing markets; before other firms strongly established in the developing markets, Amazon is in a position to establish itself in such potential markets making it more competitive with the other firms. Threat Data breaching is one of the major threat to the online company. Due to overcrowding on a server unit (DDosing), has been common making the websites unreachable. The company losses a lot of revenue when the site goes down. Therefore the company will be negatively affected by both DDosing and breaching. Cybercrime; just like any other online retail company, the company there is a potential threat of cyber-attack on Amazon. The company should therefore have an intensified network security. There is an aggressive competition in the market. Many large firms such as Wal-Mart are strongly improving so that they can offer a stiff competition to Amazon. In consumer electronics Amazon Company has been the best and it has won trust and loyalty of their customers. The company has enough capital to venture into new business opportunities and this would help the firm to make a lot of profit (Stronza, 2005). The company has also gained a lot of popularity and has won customer loyalty. Amazon Company is eying to venture in online grocery market because it is a large market and very concentrated. There is less competition in this market since only Wal-Mart Company has dominated. Since Amazon Company had a well-developed shipping infrastructure, and warehouses the company will find it easy to invest in this sector. It will also have fewer challenges since it has also invested in building delivery infrastructures and stores. Fresh foods will be available in Amazon Fresh. It has also managed to acquire Whole Food Company. The company will be in a position to benefit more in case it will successfully transform the Whole Food locations into pickup and delivery locations. By so doing, the company will be in a position to expand the Amazon Fresh’s services across major cities and thus increasing the number of customers who make their online orders. In case Amazon develops suitable strategies compared to Wal-Mart, then the Amazon will be in a position to win more of the Wal-Mart customers and therefore dominated the grocery online market. The company also aims at starting the grocery market in less developed economies, unlike their competitors who venture in major cities. This attempt by Amazon will enlarge the company’s market; not only for the groceries but also for other products. The company will also be operating their monopoly and not serve as a third party in service delivery. This will ensure that the company is able to counter the potential competitors within the economy. Amazon has all the necessary strength to enable it to remain dominant in the online retail market. However, the company should address several concerns; for instance, operating under an almost zero margin profit is not beneficial in the market, the company has the ability to raise the cost of services slightly below that of the competitors and make a lot of profits as it retains its customers. The company has not fully penetrated in the developing economies which have great potentials. It is, therefore, recommendable for the company to develop strategies that will allow it to penetrate into the developing economies. The company should also develop strategies that will help to counter efforts by the competitors such as Walmart. Since Amazon has few brick-and-mortar stores, the competitors are likely to be a great threat to Amazon. It is therefore recommended that the company increase the number of such stores (Morsello, 2006). This will ensure that the company is in a position to reach more customers and increase the popularity of their brands. Finally, the company should address cybercrime and counterfeiting via developing an intensified IT measures. This will not only protect the organizational security but also customer security. References Morsello, C., 2006. Company–community non-timber forest product deals in the Brazilian Amazon: A review of opportunities and problems. Forest Policy and Economics, 8(4), pp.485-494. Peña-Vinces, J.C., Cepeda-Carrión, G. and Chin, W.W., 2012. Effect of ITC on the international competitiveness of firms. Management Decision, 50(6), pp.1045-1061. Rodrigues da Silva Enríquez, M.A. and Drummond, J., 2007, February. Social‐environmental certification: Sustainable development and competitiveness in the mineral industry of the Brazilian Amazon. In Natural Resources Forum (Vol. 31, No. 1, pp. 71-86). Blackwell Publishing Ltd. Stronza, A., 2005. Hosts and Hosts: the Anthropology of Community‐Based Ecotourism in the Peruvian Amazon. Annals of Anthropological Practice, 23(1), pp.170-190. Read More