Amazon Business Models and Strategies
Added on 2020-05-08
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Running head: MARKETINGMarketingName of the Student:Name of the University:Author’s Note:
MARKETINGExecutive SummaryMarketing is the management process through which products and services of an organizationmove from concept to customers ultimately. Amazon has recently decided to enter in Australianmarket by 2017 with lowest prices, fast delivery and vast product selection. This study is focusedon demonstrating the marketing plan for Amazon Australia in entering in Australia. From thecurrent situation analysis, it has been found that Amazon get huge government support fromAustralian government. However, the assumption of some customers for credit card fraud andlow-quality products in online shopping hampers the business profitability of Amazon. The studyhas demonstrated the success factors of Amazon in U.S and other international markets throughlow prices, discounts, third party marketplace, diversification, fulfillment centers and others.Furthermore, the study has also highlighted the challenges faced by Amazon Australia inentering in Australia by the end of 2017. Moreover, the study has presented clear marketing planfor Amazon Australia for 2018-2021. It has been found that Amazon will target customershaving huge inclination towards online shopping. Furthermore, the organization will use lowprices for the products towards gaining high market share in Australian market. 1
MARKETINGTable of Contents1.0 Introduction................................................................................................................................32.0 Current Situations Facing Amazon Australia............................................................................33.0 Amazon’s Success in U.S. and Other International Markets.....................................................53.1 Lowest Price and Discounts...................................................................................................53.2 Constant New Features and Diversification and Flexible Payment system..........................63.3 Fulfillment Centers................................................................................................................73.4 Third Party Market Place.......................................................................................................83.5 Six Customer Service Centre across US, UK and Germany.................................................84.0 Major Challenge and Driving Force of Challenges for Amazon Australia...............................94.1 Market Size............................................................................................................................94.2 Consumer Habit.....................................................................................................................94.3 Tough Competition................................................................................................................94.4 Government Regulations.....................................................................................................105.0 Designing Marketing Strategy and Marketing Plan................................................................106.0 Pros and Cons of Strategies and Recommendation.................................................................117.0 Marketing Plan 2018-2021 for Amazon Australia..................................................................127.0 Conclusion...............................................................................................................................19Reference List................................................................................................................................202
MARKETING1.0 IntroductionMarketing is a management action of an organization for promoting and selling productsand services through market research and advertising (Peters et al. 2013). Amazon is going toenter in Australian market by the end of 2017 with low price, fast delivery and vast selection.This study will analyse the current situation of Amazon Australia. The study will demonstratethe factors, which has contributed the success of Amazon in U.S and other international markets.Furthermore, the study will also analyse the major challenges faced by Amazon Australia inentering into Australian market by 2017. Apart from that, the study will demonstrate the way inwhich Amazon will design its marketing strategies and marketing plan. Some of pros cons of themarketing strategies will also be discussed in this study along with suitable recommendation.Moreover, the study will present a marketing plan for Amazon Australia for 2018-2021. 2.0 Current Situations Facing Amazon AustraliaCURRENT SITUATION ANALYSIS OF AMAZON AUSTRALIA USING PESTLEMODELPOLITICALFACTORStable political condition of Australia can promote businessgrowth of Amazon AustraliaSupport from Australian Government can also facilitate Amazonfor the development of business in AustraliaFrequently changes in Government rules and regulation caninfluence on the business process of the organizationGovernment support for e-Commerce business can also promotebusiness growthFree trade agree agreement can also foster flexible businessenvironment in AustraliaECONOMICFACTORGrowing economic condition of Australia can enhance the returnon investment of AmazonIncreased disposable income of Australian people can enhance thepurchase volume of the customers, which can enhance the salesvolume of Amazon Australia3
MARKETINGFrequently changing inflation rate often hampers the pricing policyof the Amazon Australia The low-cost loans in economically developed Australiafinancially facilitates Amazon AustraliaGrowing industrialization also ensure economic sustainability ofAustralia, which is positive for the business success of AmazonAustraliaSOCIAL FACTORAustralians are highly inclined towards online shopping through e-commerce websites, which is a good sign for the business successof AmazonIncreasing disposable income of Australians has enhanced theirconfidence on spending power Busy schedule of Australian people makes them more inclinedtowards online shoppingLack of trust of some Australian people in online purchasehampers the sales of Amazon AustraliaWealth disparity among the consumers can hamper the businessprofitability of AmazonTECHNOLOGICALFACTORRapid technological obsolescencecan be a big threat on thebusiness of AmazonIncreasing IT efficiency facilitates the e-Commerce business ofAmazon AustraliaThe threats of cyber-crime can severely impact the business ofAmazon AustraliaContinued heavy investment on technological improvement canimprove the business process of Amazon AustraliaLEGAL FACTORReduced business tax rate imposed by Australian Government canfacilitate the business growth of Amazon AustraliaRising product regulation can also bind business by rigidregulationsStrict employment laws can also impose strict business guidelineson the business operation of Amazon Australia4
MARKETINGENVIRONMENTALFACTORAmazon Australia needs to be highly concerned about fixing ITsecurity issues for safeguarding the consumersAmazon is concerned about reducing carbon footprint occurringfrom the transportation of goodsCompeting CSR initiatives of competitor companies can imposethreats of Amazon AustraliaTable 1: Current Situation Analysis of Amazon Australia(Source: Grönroos and Grönroos 2016)3.0 Amazon’s Success in U.S. and Other International Markets3.1 Lowest Price and DiscountsThe first and foremost success factor of Amazon both in U.S and in other internationalmarket is its low price. According to Sellics (2017), Amazon always uses cost leadership strategyfor gaining high market share over the competitors. From 2007, Amazon started to sell Kindlehardware at below $9.99, which was quite lower than Amazon paid publisher. In this way, thesales of Amazon grew by $34.2 billion in 2010. Furthermore, in 2011, Amazon released KindleFire and Fire Phone and those are priced at quite lowers than the similar products of Apple. Onthe other hand, Chiu, Tzeng and Li (2014) opined that Amazon always also offers huge discountson their all product categories in the countries like U.S. India and China. Eventually, theorganization has become the leading online retail channel in U.S with 43.1% market share.Therefore, Amazon Australia can obviously rely on these past success factors.5
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