Strategic Analysis of Amazon's Business Performance and Strategies

This report provides a comprehensive strategic analysis of Amazon's business operations. It begins with an executive summary and an introduction, followed by an in-depth look at Amazon's background, including its mission, vision, and core strategies such as product diversification and hybrid approaches. The analysis then delves into the industry environment using Porter's Five Forces, competitor analysis, and an examination of the company's strengths, weaknesses, opportunities, and threats (SWOT) along with a Resource-Based View (RBV) analysis to identify key resources and competencies. Finally, the report identifies major issues affecting Amazon, such as high debt and product failures, and proposes strategic changes and recommendations to improve its performance, concluding with a summarization of the findings.

Running head: MANAGEMENT
Management
Name of the Student
Name of the University
Author Note

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Executive Summary:
The paper discusses regarding the business performances of one of the most reputed
organizations operating in the conglomerate industry named as Amazon. The paper provides
an important analysis regarding the mission, vision and the core strategies of the company.
Along with that, the paper includes a brief explanation regarding the internal and external
factors that are affecting the business performances of the company where it recognizes the
strengths of the company such as the strong network for the delivery, customer centric
approach along with the weaknesses such as high debt and flop products. The paper also
identifies the effective strategies for the minimization of the challenges that are affecting the
sustainable business operations of the company.

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Table of Contents
Introduction:...............................................................................................................................2
Project Part A:............................................................................................................................2
Background of the company:.................................................................................................2
Mission, Vision and value statement of the company:..........................................................3
Strategies of the company:.....................................................................................................3
Product diversification:......................................................................................................3
Hybrid strategy:..................................................................................................................4
Project Part B:............................................................................................................................4
Industry Environment:...........................................................................................................4
Porter’s Five Forces Analysis:...............................................................................................5
SWOT Analysis:....................................................................................................................6
RBV Analysis:.......................................................................................................................6
Project Part C:............................................................................................................................7
Major Issues Identified:..........................................................................................................7
Strategic Changes:..................................................................................................................8
Recommendations:.................................................................................................................8
Summarization and Conclusion:................................................................................................9
References:...............................................................................................................................10

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Introduction:
The paper is dedicated in the discussion of the business operations of a renowned
conglomerate organization named as Amazon. The paper includes a brief overview of the
selected organization and along with that, the paper identifies the strategies that the selected
organization uses in gaining the much required competitive advantage in the modern world of
business. Apart from this, the paper provides an important discussion regarding the macro
and micro environmental factors that the mentioned company is facing. In addition to this, the
paper highlights the major issues that are affecting the business operations of the selected
organization and along with that, it also provides an important se of strategic
recommendations for the effective management of the identified issues.
Project Part A:
Background of the company:
Amazon is one of the most prominent names in the list of the American organizations
operating in the global market with immense market share. The selected organization was
formerly known as Cadabra Inc (Amazon.com. 2019). The organization was established in
the year 1994 by an eminent American entrepreneur Jeff Bezos (Amazon.com. 2019). The
organization currently serves in various industries such as the cloud computing, e- commerce,
artificial intelligence, digital distribution and consumer electronics. The organization is
currently headquartered in Washington with the expertise of serving the customers across the
globe. The selected organization provides a wide range of products such as the Amazon
Echo, Amazon Fire, Amazon Kindle along with the services such as the Amazon.com,
Amazon Prime, Amazon Appstore and Amazon Prime Video (Amazon.com. 2019). With the
help of the visionary leadership from the part of the chairman of the company, Jeff Bezos and
the chief technology officer of the company, Werner Vogels, the company is able to achieve

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significant business in terms of revenue and market share and that is visible with the fact that
the company generated a revenue of 232.887 billion US dollar in the year 2018 along with an
operating income of 12.421 billion US dollars (Amazon.com. 2019). Apart from this, the
service excellence of 647500 number of employees is also considered to be significant for the
success of the mentioned company (Amazon.com. 2019).
Mission, Vision and value statement of the company:
With a precise focus on the mission statement of the selected company, it is visible
that the company is dedicated in providing their products and services to the customers at the
lowest possible prices and along with that, the company is focused in making sure that they
provide the best quality products to their customers and serve the utmost convenience
(Amazon.com. 2019). Considering the vision statement of the mentioned company, it is
understandable that the company has the urge to become the most customer centric company
in the modern world of business. Along with that, the company is determined in making sure
that they be able to meet the diverse requirements of the customers in an efficient manner.
The business operations of the company is seen to be dependent on various values
such as the customer obsession, ownership, learning and curiosity, invention and
simplification, hiring the best, high standards, thinking big, delivering the much required
results along with the most important factor which is earn the trust of the customers
(Amazon.com. 2019).
Strategies of the company:
Product diversification:
One of the prime strategies of the company is seen to be the product diversification.
The company is observed to increase the product range on continuous basis in an attempt to
meet the varying needs of the customers. Considering the ever changing business industry

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and the varying demands of the customers, it is evident that the companies have the necessity
to make sure that they management customer demands in an effective manner to stay relevant
in the industry. Under such situation, the company is able to manage the significant demand
of the products with inclusion of the products that are different on the basis of the flavours
and quantity. Hence, the strategy of the company of increasing the product chain enables the
company increasing the sales of the organization and improves the business performances of
the company.
Hybrid strategy:
Other than this, the company is able to apply hybrid strategy for their products and
services which is evident with the urge of the higher management of the company in
increasing the customization aspect and in providing the products at notably competitive
prices (Tanwar 2013). With the application of the low prices, the company’s main objective
is to gain a cost leadership over the other competitor organizations. The product
differentiation aspect of the company enables it to gain the chance for increasing the sales of
their bestseller products and along with that, the application of the low price plays a crucial
role in increasing the target customers of the company. Both the strategies are significantly
contributing to the success of the company in the financial and reputational aspect.
Project Part B:
Industry Environment:
With a precise look back at the fundamental industries in which the organization
operates such as the Consumer Electronics and Electronics and Media, it is evident that the
revenue of the consumer electronics industry is expected to reach 337754 million US dollars
in the year 2019 (Statista.com 2019). Along with this, the electronics and media is also
expected to reach 437718 million US dollars in the same year (Statista.com 2019). In addition

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to the growth of the consumer electronics industry is anticipated to be 7.75 annually for a
time span of four years starting from the year 2019 to 2023 and that will result in a market
volume of 454492 million US dollars by the year 2023 (Statista.com 2019). On the other
hand, the electronics and media industry will also have a growth of 6.5% annually for a time
span of four years starting from the year 2019 to 2023 and that will be significant in reaching
a market volume of 563457 million US dollars by the year 2023 (Statista.com 2019). Hence
the scope of achieving a significant growth is significantly visible for the mentioned
company.
Porter’s Five Forces Analysis:
With a precise focus on the level of competition that the company is facing in the
mentioned industries, it is understandable that the companies such as Target Corporation,
Flipkart and Costco are three of the main competitors of the company and that is pretty
evident with the generation of 75.356 billion US dollars by Target Corporation in the year
2019 (Target.com. 2019), £63,911 million by Tesco in the same year (Tescoplc.com 2019)
and 141.6 billion US dollars by Costco in the year 2018 (Costco.com 2019).
Target, Costco and Tesco are observed to put strong emphasis on the preferences of
the customers while designing their products which increases the effectiveness of the
products amongst the customers and at the same time, the mentioned companies are able to
apply competitive pricing policy for the achievement of the cost leadership. This plays a
crucial role in converting the bargaining power of the buyers from moderate to high and also
increases the threat of substitutions for Amazon and the other organizations operating in the
consumer electronics and media industries.
Other than this, it is understandable that the new organizations that are approaching
the industry are subjected to a significant growth. Having said that, the management of

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majority of the new organizations are also facing the necessity of investing considerable
amount of money for the infrastructural set up and that reduces the threat of new entries to
moderate.
SWOT Analysis:
Strengths:
The efficient network for the delivery of their products, the development of the cist
leadership in the operational industries, the capability of applying the “Go Global and Act
Local” strategy and the customer centricity are considered to be significant strengths for the
company (Economist.com. 2019).
Weakness:
The company is observed to face significant impact of high debt in recent years and
along with that, some of the flop products of the company such as Kindle Fire made the life
difficult for the decision makers of the company (Diehl and Bishop 2017).
Opportunities:
The company has considerable amount of opportunity in expanding globally, in
conducting backward integration and in reaching out to the customers with the opening of the
offline stores.
Threats:
The frequent changes in the government regulations and the global competition are
the major threats for the company.
RBV Analysis:
Tangible Resources Intangible Resources

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The efficient services of the Amazon
Fulfilment Centres, AWS and the other
structured distribution networks (Amazon.com.
2019).
The efficient CRM system of the company for
the effective identification preferences of the
customers.
The technical and soft skills of 647500 number
of employees operating in various parts of the
globe.
The strong brand value and brand recognition
of the company across the globe is playing a
crucial factor in the success of the company.
The sub divisions and strong brand portfolio of
the company.
The establishment of strong organizational
culture and the urge of the employees in
conducting ethical practices have the capability
to increases the reputation of the company.
In addition to this, the company’s
infrastructure for the effective management of
the marketing and promotional campaigns is a
major resource that can provide significant
amount of competitive advantage to the
company.
Project Part C:
Major Issues Identified:
With a precise look back at the internal and the external analysis, it is pretty visible
that the company is facing considerable amount of challenges in the effective management of
their business operations. One of the most prominent challenge for the company in the recent
years is seen to be the high debt which is increasing the concern of the senior management of

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the company regarding the financial stability of the company. Considering the intense
business competition in the e- commerce, retail and consumer electronics industry, it is pretty
prominent that the company has the possibility of facing a continuously intensified business
competition which will play a significant role in increasing the debt of the company (Laudon
and Traver 2016). On the other hand, the incapability of the company’s research and
development team is pretty prominent with various flop products such as the Kindle Fire.
With such products, the lack of market research from the part of the company is significantly
evident. Other than this, the frequent changes in the government regulations has become a
major concern for the company in managing the human resource of the company. Along with
this, the intense competition offered by the competitor organizations is a major challenge for
the company as well.
Strategic Changes:
With a precise focus on the mentioned challenges, the company is in need to improve
their technique regarding the financial analysis which will be crucial in educating the
managers of the company regarding the financial feasibility of the various business activities
that they conduct. This will also be crucial for the company in reducing the high debt of the
company.
The company’s research and development team needs to improve their actions
regarding the market research to identify the actual demands of the customers. This will be
significant for the company in avoiding the introduction of the not so attractive products such
as the Kindle Fire.
For the government regulations, the company needs to make sure that they provide the
industry standards wage to their employees and set the work time and workplace health safety
characteristics in accordance to the government regulations (Bharosa et al. 2013). Along with

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this, the company has the necessity to come up with an increment in their product chain and
is expected to increase the variety of the product for neutralizing the competition faced by the
competitor organizations.
Recommendations:
The company is recommended to increase their product chain for the management of
the business competition.
The company is expected to improve their efficiency in managing the public relations
which will be crucial in aligning their business operations with the frequently changing
government regulations.
The finance team of the company needs to improve their efficiency in investigating
the financial stability of their business activities.
The research and development team of the company needs to focus on the customer
inputs during their market research for the introduction of the new products and services.
Summarization and Conclusion:
On a concluding note, the company has the possibility of strengthening their position
in the e- commerce, retail and consumer electronics industry. However, in reaching that
position, the company is required to eradicate the impact of the factors such as the flop
products, high debt, market competition and the impact of the frequently changing
government regulations. The success of the company in long term and the sustainability of
the company’s business operations are largely dependent on the ability of the company
neutralizing the impact of these factors.

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References:
Amazon.com. 2019. Amazon.com: Online Shopping for Electronics, Apparel, Computers,
Books, DVDs & more. [online] Available at: https://www.amazon.com/
Bharosa, N., Janssen, M., van Wijk, R., de Winne, N., Van Der Voort, H., Hulstijn, J. and
Tan, Y.H., 2013. Tapping into existing information flows: The transformation to compliance
by design in business-to-government information exchange. Government Information
Quarterly, 30, pp.S9-S18.
Costco.com 2019. Costco Wholesale. [online] Available at: https://www.costco.com/
Diehl, K. and Bishop, B., 2017. Strategic Analysis of Amazon Madison Morgan November
16, 2017 MGMT 275.
Economist.com. 2019. [online] Available at:
https://www.economist.com/sites/default/files/californiastateusm_ws.pdf
Laudon, K.C. and Traver, C.G., 2016. E-commerce: business, technology, society.
Statista.com 2019. Consumer Electronics - worldwide | Statista Market Forecast. [online]
Available at:
https://www.statista.com/outlook/251/100/consumer-electronics/worldwide#market-
globalRevenue
Statista.com 2019. Electronics & Media - worldwide | Statista Market Forecast. [online]
Available at: https://www.statista.com/outlook/245/100/electronics-media/worldwide
Tanwar, R., 2013. Porter’s generic competitive strategies. Journal of business and
management, 15(1), pp.11-17.