Amazon Business Analysis

This assignment analyzes Amazon's business environment through the lenses of SWOT, PESTLE, and Porter's Five Forces frameworks. It delves into Amazon's internal strengths and weaknesses alongside external opportunities and threats. The PESTLE analysis examines the political, economic, social, technological, legal, and environmental factors impacting Amazon. Finally, Porter's Five Forces model evaluates the competitive landscape within which Amazon operates. The assignment concludes with a discussion on strategic management in cloud computing services, focusing on consumer adoption behavior.

Strategic Management

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
Literature................................................................................................................................1
Competitors identification .....................................................................................................2
The case Analysis Process......................................................................................................2
External Environment ............................................................................................................3
Internal Environment .............................................................................................................8
Recommendation..................................................................................................................11
Future strategies of AMAZON.............................................................................................11
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................14
ILLUSTRATION INDEX
Illustration 1: Amazon logo.............................................................................................................1
Illustration 2: Business Environment...............................................................................................3
Illustration 3: PESTLE analysis.......................................................................................................4
Illustration 4: Porter 5 forces...........................................................................................................6
Illustration 5: SWOT Analysis.........................................................................................................9

INTRODUCTION
Every business comprises of strategies that are required to be formulated and
implemented to achieve major goals. In order to achieve the aim, initiatives are taken by the top
members of management of the company under strategic management. In simple words, it is the
direction or effective decision provided to firm to achieve goals (Ansoff, 2014). In present era as
there is high competition level so organization requires better approach and strategies to
withstand in the market. Further, there is need to analyse internal and external environment of
the company so that firm's strengths and weaknesses can be identified and better action plan can
be formulated as-well-as executed. For this, various tools and techniques such as PESTLE
analysis, Porter’s 5 forces model, SWOT and many other are used to eradicate such
issues/problems and make positive progress. In this report, organization chosen is Amazon and
its product i.e. Kindle Fire. Various analysis, factors and strategies that are required by the
company are mentioned below.
Literature
1
Illustration 1: Amazon logo
(Sources: Amazon.com, 2017)

In 1994, the online retail sector started in Bellevue, Washington by Jeff Bezos and
offered various services and media products. In few years, it has achieved to be the world’s
biggest online retailer store. In 2007, company first managed to launch the e-reader that is
Kindle. After that several other similar upgraded products were launched by the company. In
2011, 28 September, introduced a tablet computer- the Amazon Kindle Fire, where individual
can access "Apps, games, movie, reading, web and more" (Bryce, 2017). Additionally, access
from the Amazon content, app store and free cloud storage are its other features that were
provided by the company. The product had highest sale of more than 7 million, due to all its bells
and whistles and greater storage capacity it was more preferred by people. It has most of the
features and functionality that an android has but was in the category of tablet reader. Here, in
this study competitor’s identification, case analysis process, internal and external analysis, future
recommendation and future strategies are mentioned. This product was launched so that reading
can be made easy in 21st century and to understand the manner people were using the social
media. It was portable and had a subtle environmental product (Peppard, and Ward, 2016).
Competitors identification
The major competition is provided by the Apple's iPad, Samsung's tab series and Asus's
Nexus, Blackberry, HP, Sony, Acer, Dell, HTC, Lenovo, Motorola and many more Chinese
companies. Further, Kobo e-reader and Nobles Cybook were the e-books that were providing the
competition to the company's product (Hubbard, Rice and Galvin, 2014). They were offering
tablets and e-readers that were having similar features and accessories that Kindle Fire was
having. However, the sales results show that the product was among the best and has managed to
be among the main revenue generator for the company. All the companies have their sales at the
international market so the competition level is global. They are providing notebooks, netbooks,
android and various other systems having high CPU, chip and operating system to the customers
(Hill, Jones, and Schilling, 2014). Some of the companies have provided high competition and
strategic management is required for them.
The case Analysis Process
Amazon used8-step strategic management and business for decision making process.
These were to evaluate their current market performance, reassess the corporate governance,
analyse external and internal corporate environment (Kotler, Berger and Bickhoff, 2016). Other
than this, the firm requires to have an in-depth analysis on strategic factors. All this can be
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achieved by the company if they have the best alternative strategy which can be applied to
current position and products. Further, these strategies are required to be implemented in more
approachable ways and are required to be evaluated. For this, strategic inputs were selected that
are the internal and external environmental factors’ analysis after which action can be taken
based on the formulation and implementation. At last the outcomes will be measured through the
strategic competitiveness.
External Environment
The external analysis is carried-out through the three process that are external analysis
where PESTLE analysis is done, after which Portal Five force and at last the Competitive
Environment done (Amazon.com Inc. PESTEL/PESTLE Analysis, Recommendations, 2017).
External Environment Analysis – PESTLE
3
Illustration 2: Business Environment
(Sources: Environmental Factors in Strategic Planning, 2017)

 Political factors: There is more promotion provided by the government in the e-
commerce, liberalization, legislation and promotion of such products due to which
company is getting more affordable internet access. Moreover, they are providing support
and putting efforts on the cyber security which can help them for the further expansion.
 Economic factors: People are spending more amount in such technologies as they
provide better features at affordable cost. It also provided opportunities to enter into the
new market. There has been tremendous growth of the company’s sales in terms of the
internet retailing. These products are more preferred by the people for study purpose and
4
Illustration 3: PESTLE analysis
(Sources: Heckroodt, 2014)

as there are more than 18 million books and other resources available for the learning and
studying.
 Technology factors: Technology is the only way by which the product has more sale. It
is comparable to other similar e-readers. Other than this, the broadcasting, IT and
telecommunication technologies has provided increase in use of its products. Using
technologies, it can be easily availed by the customers.
 Legal factors: Every country has different legislation and rules. Similarly, there are rules
related to the e-commerce and products which needs to evaluated by the company.
Further, security in the e-transaction should be there so that company does not face such
issues. For example, in Europe there is EU Electronic Commerce Directive which the
company must strictly follow.
 Socio-cultural factors: There is increase in the online social marketing that has provided
new opportunities to the products and organization. There are less risk and they are
making the development through the sustainable and environmental friendly manner.
Internet facilities has provided opportunities to increase market share. People can access
books, videos and many other things online through the Kindle Fire which has raised
sales of the company. Environmental factors: As the products offer the books and other study material online
so they are preventing the cutting of trees. It is more environmental friendly device which
can be used for study purpose. Further, the company is following CSR activities and
taking steps to prevent the global warming and pollution. Other than this, they are
recycling and reusing products and technologies to save nature.
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Porter Five force
Bargaining power of
suppliers
 Due to advancement in the technology, there are greater issues
faced from the supplier’s side.
 There are different products sold by the amazon on different
platform such as e-books but there is an issue in it that customers are
unable to access those information outside the Amazon device.
 There is reduction in the prices and massive reach.
 As the company is having the better image and market position
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Illustration 4: Porter 5 forces
(Sources: Prince, 2016)

so less issues are faced from the supplier’s side.
 Due to low availability of the global shipping there is increase
in the amount of suppliers.
Competition among
rivals
 Due to rivalry, there was the company has to sell its product to
discount so that price wars can be maintained.
 There are more features and application provided by the
competitors across their proprietary platforms (Jenkins and
Williamson, 2015).
 Companies that are having the physical and online presence are
having more advantage then the cited firm.
 Due to intense competition, there is reduced product life cycles.
Threat of new
entrants
 There is decrement in the established retailers strong brand
image so that consumer trust can be gained.
 New companies are providing more lowest price and more
technological devices so that people purchase them.
 There is higher competition in terms of technologies from the
Chinese companies.
Bargaining power of
buyers
 As the customers are getting the Android devices at more
cheaper rates so people are more preferring them.
 Along with this as consumers are unable share the books content
so they prefer the traditional methods of books.
 Branded products such as of Apple, Google, HTC and Motorola
are more considered by the people due to their brand presence.
 There is decrease in the prices and more increment in the
purchasing power.
Threat of substitutes  The brick and mortar approach are used by the people. They
enjoy the traditional books and magazines for the study which is
affecting the sales.
 Internet, cable TV and Satellite are also grabbing the
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opportunities to the streaming content.
 Offline gaming, Xbox and other devices are providing great
threat to the tablet devices and gaming.
 There are lots of privacy issues in terms of downloading, and no
option available for the sharing of those content.
 High-renting, internet has provided other companies better
opportunities (Ritala, Golnam and Wegmann, 2014).
Competitive Environment
In terms of the e-book readers people prefer to have more laptops and desktop computer
as they offer other features also. Further, there is high competition provided from the Apple,
Samsung and other companies. Though, there was high competition, there was huge sale of the
product in the first and second year. The upgraded version is also highly preferred by the people.
In three years, the product provided more than $27.416 billion of revenue and more than $5
billion of profit (Aversa, Haefliger and Reza, 2017). There is only one disadvantage that
company is facing, that is physical stores where other competitors can access more profit. The
company has expanded its operations to almost all the countries.
Internal Environment
What are the business Resources – Tangible and Intangible
Amazon, it uses the resource-based model in order to identify its Tangible and Intangible
resources. Amazon has different units that are focusing on development and innovating new
things in the company. They have better physical, financial and human resources. It can be seen
that there is dependency in these resources. Due to their unique resources and capabilities they
are having better strategies (Oxley and Pandher, 2016). They follow the hierarchy structure so
that they can perform their operation in more specified and focused manner. Humans are
considered as the best resources of company. Their efforts provide greater inputs into a firm’s
production process. The firm performs the dynamic function so that better results and more
advance technologies can be provided to customers. Their capabilities provide better competitive
advantages that company can perform better than its rivals. It is among the most attractive
industry and make progress through the strategy formulation and implementation. Other than
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humans, they have innovation and reputation as its vital resources where they focus on
innovation and brand image of the company among suppliers and customers. The results can be
seen in the Kindle fire that is has collected more than billions of revenues.
SWOT Analysis
Strength
 Similar features of android and e-book
readers and is cheaper.
 Millions of reading material comprising
of books, magazines and newspaper are
available on the stores and has longer
battery.
 Simple to use. Global brand and provides diversified
products.
Weakness
 Risk of damage and battery.
 Cannot lend books to friends.
 Personal purchase and if device is
broken then complete book stores will
be lost (Shin, Jo, Lee and Lee, 2014).
 No colours and user-friendly.
 Sharing is not possible which is why
people less prefer it.
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Illustration 5: SWOT Analysis
(Sources: Why Use SWOT Analysis, 2017)

Opportunities
 For e-book readers, it is the top most
chosen product.
 Live content and other features can be
easily added and provided.
 Innovative products and innovative-
logistic. Various opportunities to sell and
purchase products.
Threats
 Issues related to the Amazon's public
market investors and visionary
investments.
 There are higher digital right risk
issues.
 Competitors are copying the content
and capitalizing their model.
Core competencies
Core capabilities are required by the organization as it serve as source of competitive
advantage for organization over its rivals. It provides the new identity which makes its firm
competitively. Over the years, the company has accumulated and gained to deploy different
resources and capabilities as per the market and innovation requirement. Every core competency
is a capability, but not every capability is a core competency (Pisano, 2017). In order to be the
same, they have to be non-substitutable for customers and valuable along with this product must
be unique and inimitable for rivals. Amazon has maintained the way the products are launched in
the market through various strategies used by the company.
Value Chain Analysis
Value is calculated as product's-performance-characteristics and by its attributes. It is a
form for which customers pays and competition is provided to customers. Through this company
gains returns. Using resources and strategies company can achieve greater market success and
competencies. Value chain analysis allows organization to understand sources which create
values to the company. Through product delivery and services, it has achieved the values chain.
The managers can better understand the firm's position as in terms of entity it is among the top
positioned firms of retail sector. It is based on two activities that are primary and support
activities and Amazon has both of them that provide assistance to the company whenever,
required (Shen, Hu and Rees Ulmer, 2015). For this, they are handling their logistic and
operational part. Moreover, they have focused on their Marketing and sales part for the higher
revenues.
Evaluation of current strategies
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They must maintain their suitability, feasibility and acceptability so that they can make
better opportunities. There is effectiveness and efficient in the performance of the company and
its products. Furthermore, they have higher business-level and corporate level strategies that are
keeping them compete with other companies (Ogiela, 2015). They have enough resources that
company can withstand during the time of economic crises.
Recommendation
The company is having the global presence and they are providing better products at
cheaper rates. However, as there are various threats and opportunities which company needs to
focus. These may include the higher level of substitutes, industry price competitions,
environmental awareness, global expansion and growth in the e-book market (Rodriguez and
Navarro, 2002). For this following recommendation are provided for the improvements and sales
of the Kindle fire. These are:
 Focus on differentiation: Firm must focus on the positioning and performance. For this
focus must be provided in the R&D part.
 Using tablet computer, they can make better approach to the market segment: Higher
premium is required for this purpose.
 Company should focus on more globalization as there are less sales in the China and they
should also eliminate the restriction on the e-books.
 The books cost is another issue with customers so Kindle books prices must be lowered.
 As it is better and cheaper platform so the company must corporate with other
educational society for the study. Through this way they can promote in more
environmental friendly ways.
Future strategies of AMAZON
Amazon is one of the leading e-commerce business website dealing in diversified
products. The new product Amazon has introduced is Amazon Kindle Fire which is a tablet and
is going to give a tough competition to all the competitors in the market. New product needs to
be promoted well in the market to increase its demand (Irani, 2015). For the same Amazon has
prepared few future strategies at various levels for promotion and sales generation of kindle fire.
Business level strategies: Business level strategies are applied in organisations having different
business such as Amazon that are called SBU's. At this level strategies are prepared to determine
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how an organisation should compete in each of its SBU's. Following are the strategies to be used
by Amazon for promoting kindle fire.
 Cost leadership: Attaining a lower cost of product, Amazon can provide Kindle fire at a
lower price in the market. This strategy will attract all class of people as it would be
affordable for even lower-class people. This will ultimately increase the number of sale. Differentiation: Amazon can use its unique features and services to distinguish it from its
competitors. For example – size of screen, memory space, battery capacity, etc. Market
focus: Concentrating on a particular market segment. With this product Amazon has
mainly targeted to the readers (McFarlin and Sweeney, 2014).
Corporate Level Strategies: Corporate Level Strategies aims at decision making for the entire
organisation and it strategic business units. Following are the strategies used by Amazon at
Corporate level:
 Growth: Amazon is expanding kindle fire by introducing new and improved features in
the latest sets. With adding some new features to attract new market. Stability: With introducing new products, Amazon strategies related to kindle fire are
clear and stable. Trying not to lose the main features of kindle fire in order to introduce
new products in the market. Renewal: Amazon is investing well in its research and development department in order
to bring innovative features to target new market once the targeted market is approached
(Bennett, Seamans and Zhu, 2015).
Strategic vision:
Amazon's vision is to become Earth's most customer-centric company and to build a place where
people can find anything they want online. Amazon has the best strategic intent below are some
important strategic intent:
 As its vision states, company is aiming at becoming the best choice of online shopping.
 Company always aims at providing the best delivery services so that it can retain
customers (Zhu, and Liu, 2016).
 With kindle fire, To be respected and to be recognized in the worldwide book-store.
 To get connected with more products and more brands to attract new customers.
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CONCLUSION
From the above study, it can be concluded that Kindle fire have more features than e-
readers due to which it collected billions of revenues. There are different features and application
provided by the company such as Amazon's Silk browser, as-well-as modified operating system
which has increased its performance. It can be positioned equally in terms of the technological
industry as Apple. They have effectively overviewed their external and internal environment due
to which they are providing high competition to the other companies. Amazon using it products,
that is Kindle fire can effectively compete to other companies. The strategic management should
be adopted by other companies to expand at such level.
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