Amazon: Products, Services, and Competitors - Case Study Example

Running Head: AMAZON Inserts His/Her Inserts Grade Inserts Amazon In the innovation, technology and progress, many new forms of businesses have been introduced which provide the customers with superior quality products and services without much hassle. The advent of internet and web 2.0 has created much ease for the consumers to avail the facilities provided by the companies while sitting at home. Amazon incorporation is one such company which provides the online products and services to its subscribers. This paper will elaborate upon the products, services and competitors of the company along with a detailed analysis of it strengths, weaknesses, opportunities, and threats. Amazon Incorporation The company, Amazon.com, Incorporation is one of the electronic commerce companies, operating on the multinational level, located in America having its headquarters in Seattle, Washington. It is one of the largest online retailers globally (Jopson, Barney, 2011). Amazon incorporation also produces the products of consumer electronics, which most prominently include the Amazon Kindle e-book reader. It also provides the services of cloud computing to its consumers. The company manages it sellers by contributing towards programs which let its consumers sell their products through the websites of the seller and also market and sell them on the website of Amazon incorporation. It earns per-unit activity fees or revenue share fees and fixed fees on such business dealings. The enterprises are served by Amazon through AWS that brings the technological infrastructure in easy access to the developers, who can utilize it to facilitate nearly every sort of business. Amazon mainly functions in the online retailing business of e-books, and has various websites in many countries across the world. They operate in United Kingdom, United States, Canada, Italy, France, Spain, Japan, Germany, and China, along with the international delivery to many other places for some of its products. The company initially came into the business by starting up an online bookstore. However, it quickly expanded into a bigger company dealing in the selling of CDs, DVDs, software, MP3 downloads, apparel, furniture, electronics, video games, toys, food, and jewelry (Rivlin, Gary, 2005). Competitors The Amazon Incorporation competes in the Internet & Mail-Order Retail industry. It provides business services in media, publishing, clothing and other retailing. The top competitors of Amazon incorporation include Apple incorporation, Columbia House Company, eBay Incorporation, Wal-Mart Stores, Incorporation, Barnes & Noble Incorporation, and Hastings Entertainment, Incorporation (Datamonitor 360, 2012). All these companies give a cutthroat competition to Amazon incorporation for the reason that they also operate in the similar online industry. Much of the retail world has been taken upon and beaten by Amazon.com. Now, it is considering aiming upon the major seller, Wal-Mart, which has been giving it a rigid competition. It was around five years ago, that there were around one quarter of the customers of Wal-Mart, who purchased the products on the web portal at Amazon.com. It was one of the biggest online retailing stores. However, at present, more than half of the shoppers of Wal-Mart say that they shop at the website of Amazon incorporation. Thus, Amazon Incorporation has been trying to create potential competition for Wal-Mart, e-bay and other online retailers (Charles, 2006). SWOT Analysis Amazon.com is one of the major retailers in the online retailing industry. Having the revenues, $34,204 million in FY2010, the company is larger than its nearest rivals which are Barnes & Noble (having net profits of $6,998.5 million during the year 2011 ending April 2011) and eBay (with the net profits of $9,156.2 million for the year 2010). The leading position in the industry lets Amazon target and capture a bigger existing, and potential customer base. The SWOT analysis of the company details the strengths, weaknesses, opportunities, and threats of Amazon Incorporation as follows: Strengths Amazon. Com functions with the internal strengths: Largest online retailer The company is the largest online retailers around the globe. It provides its competitors the services and products in different categories with the help of its e-commerce website. They include www.amazon.co.uk, www.amazon.com in the United States and through www.amazon.fr, www.amazon.de, www.amazon.cn, www.amazon.co.jp, and www.amazon.it in the markets across the world Extending product line and strengthening technical platform through strategic acquisitions Amazon Incorporation is in the process of spreading its business operations and the offering of the product with the help of diverse acquirement. During the year 2009, Amazon incorporation acquired online apparel, Zappos.com, accessories and footwear retailer. This acquiring made it possible for Amazon to generate the internet sale volume and revenues of apparel, the major category of internet purchasing in which the company had least success rate in the past. Then, during February 2010, Touchco, a touch screen technology organization, was acquired by the Amazon. Com. The, Amazon amalgamated the staff members and technology of Touchco in the hardware division of Kindle. Later, in October 2010, Amazon incorporation purchased a lifestyle and fashion online purchasing community, BuyVIP.com. This online company has over six million associates in various countries including Spain, Germany, and Italy. Later in the same year, Quidsi was acquired by Amazon, while in January 2011, Amazon acquired the remaining shares in LOVEFiLM International, one of the leading European subscription entertainment service providers. Kindle builds strong presence in the e-books space The Amazon incorporation has led the swiftly growing market of electronic book for the past many years with the help of its e-reader device, Kindle. Kindle is the portable reader of Amazon incorporation which downloads blogs, books, newspapers and magazines wirelessly to the paper display of high-resolution electronics. This store offers more than 950,000 books to its customers and has priced 80% of these books at or lesser than $9.99, which also includes 65 best sellers of the New York Times. Weaknesses The internal weaknesses of the company are as follows: The wearing down of stakeholder confidence through patent infringement Amazon Incorporation is engaged in various cases of the patent infringement. During the year 2009, a complaint against Amazon was filed by SpeedTrack for the infringement of patent United States District Court. It alleged that the web technology of Amazon was involved in the infringement of a patent possessed by SpeedTrack. Then, another complaint was filed by Eolas Technologies which blamed that Amazon Incorporation infringed two of the Eolas Technologies’ patents. Thus, there have been many other such issues which became a bad name on company’s reputation. The frequently occurring outage of and Amazons cloud computing and web hosting servers Amazon Incorporation provides various products related to Information Technology to its customers. They include content delivery, industry specific clouds, management and deployment, computing, monitoring of cloud, storage, database, networking, and web traffic among others. Currently, the company is countering regular troubles regarding web hosting and cloud computing servers. In the year April 2011, the company is dais to have various issues with its Elastic Compute Cloud and Relational Database Services and the malfunctioning and outages of these services occurred because of the movement of the network traffic to the incorrect router. Opportunities The opportunities are as follows: Increase in online business The developed nations have embarked upon undertaking more of the online businesses. Thus, Amazon has gained revenues due to the increase in online shoppers and the trends of e-business in the modern corporate sector. Growing importance of the online advertising The introduction of social media has provided the online businesses with an increased chance of advertising. For the last few years, the advertising market in the United States has been growing with a good percentage. Thus, Amazon has a chance of growing profits and business expansion due to the growing emphasis of online advertisement. Threats Increasing competition in the e-reading market Amazon Incorporation operates in the online retailing of books and other products and services. However, other major rivals such as e-bay and Wal-mart are making this market more saturated and thus giving immense competition to the Amazon. Com. Thus, the threats of increasing competition in the industry is increasing with the passage of time. Strategy for Amazon Incorporation In order to counter the extreme competition in the industry, Amazon incorporation has to embark upon a strategy that helps it grow in profitability and market growth. The company needs to undertake certain measures in order to achieve success in the industry. It needs to plan long-term strategies to beat strong competitors like Wal-Mart and E-bay. Moreover, in order to reach the saturated market for online purchases, the company has to lower its costs and adopt strategies which help it position itself in the industry on a much leading position. References Charles Fishman, 2006, The Wal-Mart Effect: How the Worlds Most Powerful Company Really Works--and How Its Transforming the American Economy, Penguin Press HC, 1st Edition. Datamonitor 360, 2012, Amazon.com Incorporation, Web, Retrieved on June 7, 2012 Jopson, Barney, 2011, Amazon urges California referendum on online tax, FT.com. Web, Retrieved on June 7, 2012 Rivlin, Gary, 2005, A Retail Revolution Turns 10, Seattle, WA: The New York Times, Web, Retrieved on June 7, 2012 Read More