Global Performance of Amazon - Case Study Example

Running Head: Amazon Amazon Introduction Amazon.com, Inc. was incorporated in United s of America as Cadabra. It later changed its name to Amazon, in respect to one of the world’s largest rivers. It is a multinational electronic trade company with its headquarters located in Seattle, Washington. Jeff Bezos founded the company in 1994 but it was not launched until the year 1995. As the biggest online retailer in the world, the company provides consumer electronics that is Amazon Kindle e-book reader. In addition, it is one of the leading providers of services of cloud computing. Initially, the organization was an online bookstore but it diversified its operations to include services such as DVDs and VHS tapes, software, electronics, video games, music CDs, furniture, clothing, MP3s, and food items. Technology ensured that E-books could eclipse the sale of hard copies and Bezos took advantage of it (Stone, 2012). This was in recognition to what Amazon had done in making online shopping popular. In order to ensure that its products are closer to the customer, Amazon operates different retails websites for several countries including US, United Kingdom, Canada, Germany, China, Spain, Italy, France and Japan. In addition, the organization operates international shipping lines to given countries for delivery of its products to its customers there (Enright, 2010). Amazon’s Main Competitors The main competitors for the organization are Apple Inc., eBay Inc., buy.com, Google, Barnes & Noble, Inc., Wal-Mart.com USA, LLC, and Catalog & Mail Order Houses. This is because the companies are in the same business and they have been able to establish themselves in the market as well. These competitors operate several websites that customers can use to purchase their wares. In addition, the competitors such as Apple Inc offer a diverse number of services that can be used to rival Amazon. However, in order to stay ahead of the game Amazon ensures that it produces services that are not available in the other online retailers. For, example it was the first to introduce an international shipping line for transporting goods to its customers (Enright, 2010). SWOT Analysis Strengths The relationship between Amazon and publishers based in New York is very good because Amazon is able to sell books everywhere (Stone, 2012). This means that the organization has already established itself and thus customers trust its operations. Because of its policies, which are to satisfy the customer at all the times, Amazon has been able to create a huge client base. In addition, the existing clients for Amazon act as its marketers because they recommend their friends to shop at Amazon. Amazon’s culture is customer friendly because they start with the customer and work backwards in order to see what the best choice to make is (Manjoo, 2011). More importantly, the company has been able to reinvent its services with much success over the years. This shows how innovative the management of Amazon is. It is always in the process of innovating products and services that will serve the interests of the customer. Customer feedback is very important to the organization for it helps it in determining what changes need to be undertaken. However, feedback from other stakeholders plays a key role in understanding what has to be changed. This gives the organization an upper hand in online marketing because customers feel that they are part of the organization because their concerns are addressed. It is worth noting that all employees of Amazon are vetted before they are hired in order to ensure that they will add value to the organization. Adding value to the organization involves upholding ethical standards that are set by the organization’s management (Subbaraman, 2012). In addition, the organization has a wide range of experienced executives such as Laurence J. Kirshbaum who helps in running the New York based printing company for Amazon (Stone, 2012). According to Hane (2012), Amazon is the leading online retailer in the world, which means that it is financially stable. Its brand is recognized in the world and is synonymous with online sales. The model of business practiced by Amazon ensures that revenues are increased without having to increase production costs in large margins. This implies that the organization is in a position to invest in new ventures, which it deems profitable. This is unlike starters who do not have the resources to invest in anything new because some investments take time before one starts to reap benefits (Subbaraman, 2012). Diversification is a strength that cannot be ignored at Amazon. This is because the company sells almost everything and this means that every person has something to buy from their online stores (Hane, 2012). In addition, it operates in different countries across the world, which means that its products and services are closer to the people. Amazon has established itself in several countries across the world. This means that its presence is felt by the people in their day-to-day activities. It has employees located in several countries across the globe with the sole purpose of ensuring customer satisfaction (Subbaraman, 2012). Weaknesses The main strategy that Amazon operates on is low prices, but it is worth noting that other organizations may come with better deals and attract the organization’s customers. It is important for the management to ensure that it provides other incentives to its customers in order to ensure that they stick with its products and services. The fact that Amazon has diversified its distribution channels to several geographical locations and increased its products poses a challenge to its operations. Management of the several distribution channels will not be easy for the organization and customers may end being dissatisfied (Enright, 2010). The growth of Amazon.com has not being the best except under extraordinary conditions such as the release of Harry Porter. Amazon offers to deliver its products to the customer irrespective of where one is located geographically. This strategy is expensive and may be unviable in the future. This results in customers having to wait for several days for book deliveries, which they (customers) could have obtained from their local bookstore, instantaneously (Manjoo, 2011). This has seen a campaign known as Occupy Amazon community, being launched on Facebook urging consumers to buy books from their local stores (Hane, 2012). Opportunities Amazon could make good business through pre-ordering, whereby a customer pays for a product before it is released. In turn, Amazon will pay the supplier and the customer will have the opportunity of obtaining the product immediately after it is released. It is worth noting that this can work because Amazon charges more during the early days after the release of a product and it receives money from customers before delivery of the product. Moreover, the organization could incorporate the services of other stores such as Circuit City, WHSmith, Toy R Us, and Office Depot among others for the distribution of its products. This will see growth in product range and the brand name will improve (Manjoo, 2011). Amazon can use Web services provided by companies like Facebook.com and Linux, which allows a third party to access technical contents in order to develop and improve its applications without having to invest. This will see the improvement of Amazon’s platform at minimal cost. Broadband and internet have been growing rapidly across the countries and Amazon can use this to expand its brand to the international market. It is important that the management of Amazon see all the opportunities it has and utilizes them in order to achieve its goals in growth (Manjoo, 2011). Threats Competition is the main threat that Amazon faces. This is because online business has seen tremendous growth and companies like Google, EBay, and Wal-Mart are doing everything possible to ensure that they are ahead of the company. Amazon maintains an inventory in a bid to meet all customers’ deliveries. However, the inventory is risky because the world of business is ever changing. This implies that a standard inventory will not work for the organization because change is inevitable. Performance of the organization is not at par with the other companies in the same industry. In order to remain competitive, Amazon needs to give a serious thought to its financial performance just like the other organizations. In some countries, especially developing nations, online payments are not regularized. This implies that customers lack the confidence of processing their bank details via the internet (Manjoo, 2011). Amazon has angered publishers as noted by Hane (2012) by lending books because publishers will not be earning from this program. Strategy for the Next Five Years In order to beat the competition, Amazon’s management should invent incentives that will ensure that it retains its customers and attracts new ones. This will help because competitors will always be looking for ways of offering the best deals to the customers. In addition, the organization needs to understand that most customers shop in their stores because of the trust they have for the organization. This trust should not be destroyed because it has kept the organization in the market for all these years. Incorporation of web services from Facebook.com or Linux will help the organization in improving its platform while saving money. This will go a long way in ensuring that the company’s websites are user friendly. In addition, it is important to educate customers from third world countries on the security associated with online payments to Amazon. They should be made to understand that paying online to Amazon is risk free. This can be done though adverts and it will increase sales. References Enright, A. (2010). “What Amazon’s strong growth means for competitors.” Aggressive sales are a wake-up call to other e-retailers. Retrieved 05 June 2012 from http://www.internetretailer.com/2010/10/22/what-amazons-strong-growth-means-competitors Hane, P. J. (2012). Amazon’s Ever-Expanding Empire. NewsWatch. Manjoo, F. (2011). “Fast Company." The Great Tech War Of 2012: Apple, Facebook, Google, and Amazon battle for the future of the innovation economy. Retrieved 05 June 2012 from http://www.fastcompany.com/magazine/160/tech-wars-2012-amazon-apple-google-facebook Stone, B. (2012). Amazons Hitman A Tale Of Books, Betrayal, And the (alleged) Secret Plot to Destroy literature. Bloomberg Business Week. Subbaraman, N. (2012). “Fast Company." Apple, Google, Facebook, And Amazon Compete In India Over Mobile, Social Networks, E-Commerce. http://www.fastcompany.com/1817012/india-big-tech-update Read More