MBA Capstone Project: Competitive Advantages Analysis of Amazon.com

This capstone project analyzes Amazon's competitive advantages in the online retail market. It begins with an introduction and company overview, highlighting Amazon's diverse product and service offerings. The project then delves into an internal environment analysis using VRIO, identifying valuable, rare, inimitable, and organized resources. A SWOT analysis assesses strengths, weaknesses, opportunities, and threats. The external environment is examined using PESTEL and Porter's Five Forces, evaluating political, economic, socio-cultural, technological, environmental, and legal factors, as well as industry rivalry, supplier power, buyer power, threat of substitutes, and threat of new entrants. The project articulates Amazon's core competencies, including brand strength and customer focus, and identifies strategic advantages such as low-cost leadership and technological expertise. A diagnosis of strengths and weaknesses, source availability, and future sustainability is provided, concluding with strategic opportunities and risks. The project uses various frameworks to comprehensively analyze Amazon's market position and competitive strategies.

Business Capstone Project
Competitive Advantages
Analysis: Amazon

Introduction
• Gaining competitive advantage in present business scenario is tough.
• Changing demand of customers and access to the internet enhanced
the scope of business opportunities
• This has also increased competition as new companies are entering
the markets
• Amazon.com and its Competitive Advantages in the online retail
market

Company overview
• Amazon.com, Inc., an American
multinational company.
• Focuses on: Artificial intelligence, Digital
streaming, cloud computing and e-
commerce
• Headquarters- Seattle, Washington
• Founded on 5th July, 1994
• Founder: Jeff Bezos (aboutamazon.com
(2019)

Company overview (continued)
• The company business has shockingly flourished over past few years
• The journey begins with selling goods on online platform
• Soon began the major force in the ecommerce retail market
• Started as Online bookstore and expanded afterwards to other product lines
• Enjoying the status of world’s number one online retailer in present time

Products and services
• Retail: Books, Consumer electronics, office and computer, automotive and tools,
household and food, home improvement, video games and toys, fitness and
sports, jewellery and clothing, baby and kid products, Kindle
• Non-retail: Referrals and AWS or Amazon Web series (aboutamazon.com, 2019)

Internal environment analysis
VRIO analysis
The VRIO analysis of Amazon explains how the company is doing in its business and
retaining its position in competitive markets
Valuable resources
• The company is growing its diversity in online services
• The brick-and-mortar presence of the company is continuously growing
• Most important part is the delivery network of the company. This company has
international, regional and domestic partnerships in delivery network (Brown 2016).
• Increasing warehouse and distribution hubs
• Brand equity is increasing every year over the world

Rarity
• The company has been successful to establish its uniqueness in the
online retail market.
• Delivery network that this company work with has rare success rate
• The recruitment process of his company has rare features
• Fulfilment centres
• Huge product range
• Unique partnerships instrumental in building reputation

Inimitable
• Amazon has a brand equity globally
that is remarkable
• It works on high market
capitalisations
• The AI technology that the company
uses in its delivery and operations are
beyond any organisations reach
• High brand equity attracts the current
customers globally

Organised to capture value
• This part is important to have a sustainable competitive advantage
• Amazon has an effective strategic management process through
which it operates
• Employees of Amazon enjoy an organised reward and motivational
system
• Innovative ideas are always cultivated and encouraged in this
company business
• The management and control system of Amazon is its plus point and
helps it to get competitive advantage in present market conditions

SWOT
Strength
• Strong brand awareness and equity
• Positive reputation
• Organisational infrastructure
• Consumer centric business approaches
• Diversified operations
• Operating through various third party
channels
• Low cost structure for competitive advantages

Weaknesses
• Addition of new categories sometimes confuses the customers about
choice making
• Amazon’s delivery systems are depended on their delivery partners.
The service charges are sometimes high for this reason (Hinterhuber
and Liozu 2017).
• The free shipping facilities of this company are not available in every
place. This compels the customers to choose other options over
Amazon.

Opportunities
• The group I selling its know-how to the key stores and cashing as an
online retailer
• The Luxembourg based unit is offering customised services in Europe
to its vendors.
• This company is coordinating and collaborating with the various
public sectors. Like its deal with British Library
• Amazon is increasing its market by buying renowned online retailers.
• They are buying shares of different companies to get control on their
online business