Amazon's SWOT Analysis: Strategic Insights & Recommendations

This report presents a SWOT analysis of Amazon, a multinational technology company involved in e-commerce, cloud computing, artificial intelligence, and digital streaming. The analysis identifies Amazon's strengths, such as its strong brand name, customer-centric approach, innovation, and superior logistics, as well as weaknesses, including an easily imitable business model and allegations of inhuman working conditions. Opportunities for expansion in developing markets and leveraging self-driving technology are highlighted, while threats such as government regulations and increasing competition are addressed. The report concludes with recommendations for Amazon to consolidate market dominance through marketing efforts, address global controversies, and expand its physical store presence to enhance competitiveness and customer satisfaction. The competitive positioning of Amazon is compared with Walmart and Alibaba.

Amazon company SWOT
Analysis & Recommendations
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Introduction......................................................................................................................................3
Main analysis...................................................................................................................................3
Conclusion.......................................................................................................................................6
Recommendation.............................................................................................................................6
References........................................................................................................................................8
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Introduction
Business environment is inclusive of number of internal and external factors that are having
tendency to affect overall strategic decision making and profitability of company. It is essential
for companies to determine their strength and weaknesses in order to grab potential growth
opportunities while overcoming threats with the help of this organization can not only overcome
the challenges and risks at prior stages but can also implement significant measures in order to
assure higher growth and competitiveness in industry (Babich and Hilary, 2020). Furthermore it
has been analysed that in order to leverage opportunities and exploit global market growth
opportunities it is essential for organization to analyse business strengths, weaknesses, threats
and opportunities in a significant manner.
The present report is conducted on Amazon which is operating its roles and responsibilities
as a multinational technology company. The organization emphasise on cloud computing, e-
commerce, artificial intelligence and digital streaming and offer their services and facilities to
customers around the globe. The present report significantly include discussion on this SWOT
analysis of the selected company. Along with this report include the manner in which
corporation leverages their strength to overcome their weaknesses and prevent businesses to any
form of threats in order to exploit the global market for opportunities. Along with this, certain
recommended practices are also being included in present report.
Main analysis
SWOT of Amazon
SWOT analysis is defined as a strategic planning as well as strategic management
techniques that allow an individual or an organization to duly make identification of their
strengths, weaknesses, opportunities and threats in a particular industry. This is an effective tool
which provides advantage to business organization in order to determine the source of
information for strategic planning. It also allow organization to build strength and reverse their
weaknesses which further benefits in maximising their response to opportunities. Furthermore
with the help of this analysis company can overcome threats and can identify core competencies
of the company. Mentioned below SWOT analysis of Amazon is being conducted through which
the management can determine their strengths weaknesses and threats and can further exploit
potential opportunities in global market:
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Strengths:
 Being a global eCommerce giant strong brand name is among one of the most effective
strengths of Amazon. The company is having strong position and successful brand image
in both local and international market (Baboolal-Frank, 2021). This is among one of the
most efficient international strategic factor and act as an important element for Amazon’s
corporate strategy.
 Amazon is a multinational organization that emphasise on providing high quality
products and services to customers. The company focus on consumer-oriented approach
which makes them distinct from other competitors in the market segment.
 Amazon frequently brings innovation and creative ideas which plays important element
of their corporate strategy. Furthermore it has been analysed that with the help of
differentiation and innovation organization make addition in their product line and
service offering such as drone delivery service.
 With the help of latest merchandise selection with the aid of taking their own extensive
product mix that attracts online consumers. This company is having strength in terms of
largest merchandise selection (Chesneau, 2021). Along with this with the help of cost
leadership company effectively control its cost and lower inventory replenishment time.
 The company is having large number of acquisitions and involved into 3 key business
elements which is Amazon Web Services Amazon marketplace and Amazon prime. With
the help of superior logistics and distribution system Amazon is having competitive
corporate strategy which allows them to be a multinational organization in the industry.
 Being the world’s leading online retailer, Amazon derives its strengths primarily from a
three-pronged strategic thrust on cost leadership, differentiation, and focus. This strategy
has resulted in the company reaping the gains from this course of action and has helped
its shareholders derive value from the company.
 Amazon primarily derives its competitive advantage from leveraging IT (Information
Technology) and its use of e-Commerce as a scalable and an easy to ramp up platform
that ensures that the company is well ahead of its competitors.
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 Amazon enjoys strong financial growth from past many years which makes them one of
the renowned companies in the market.
Figure 1Amazon’s balance sheet from 2018 and 2019, stated in millions
Source: https://www.wsj.com/market-data/quotes/AMZN/financials/annual/balance-sheet
Amazon has done a great job with their financials and continues to grow. Their long-term
debt and taxes are down, which is good for the companies returns. Treasury stock, common stock
and intangibles stay the same throughout the last few years. Amazon is going in the right
direction considering their Form 10K, income statement and balance sheet.
Weaknesses:
 Amazon is facing major weakness in terms of its easily imitable business model.
Nowadays online retail business organization undertake use of digital competencies such
as eBay, Netflix and another organizations which gives Amazon a tough time.
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 Losing margin in few areas such as India Amazon is facing the risk of losing margin in
some of their competitive market segment. In addition to this limited brick and motor
presence and decline of consumer safety and using unfair 3rd party data is acting as major
weakness for Amazon.
 Amazon drivers allege in-human work condition due to their strict delivery time schedule
and constraint (Correia, 2021). These type of complaints from employees is causing
ineffective relationship of Amazon with its workers.
Threats:
 Amazon is facing threat due to few controversies in the past which created negative
mindset among consumers towards the organization.
 The company is also facing threat in terms of government regulation and links to
exploitative labour which is affecting its reputation in market (Mäki and Toivola, 2021).
 The company is facing threat in terms of aggressive competition from big organizations
like Home Depot, Walmart, eBay etc.
 Amazon is facing threat such as increase in counterfeiting and fake products which is
affecting their overall profitability.
Opportunities:
 Amazon is having significant opportunity to expand or penetrate its operations in
developing markets. In addition to this by expanding physical stores company can make
significant improvement in its competitiveness and can overcome competitive rivalry in
industry.
 Amazon is having significant opportunity to make improvement in their technological
measures as well as organizational policies in order to enhance their overall sales.
 The company is having opportunity to use their strength and take advantage of self
driving technology to leverage autonomous technology to enhance their delivery
network. With the help of personalised experiences to shoppers and accepting virtual
currencies company can make improvement in their profit margin (Jindal, Gauri and Ma,
2021).
 Amazon is having opportunity to emphasise on expanding its global footprint to create a
positive mindset among consumers towards company. This will allow them to enhance
their competitive edge in the industry.
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How the corporation leverages its strengths to overcome its weaknesses and prevent threats to its
business in order to enhance the effectiveness of exploiting global market opportunities
Amazon is a world’s leading online retailer and is operating in an e-commerce, cloud computing,
supermarket another industries (Droesch, 2020). The company success is due to their global
brand image consumer centric approach and other competitive elements. With the help of
superior logistics and distribution center, innovation and cost leadership brand valuation and
another strategies this company is exploiting market opportunities for more growth project is in
future. It has been analysed from the above analysis that company is having certain strengths
which provide them competitive edge in industry. However it has been analysed that company is
facing major weaknesses such as easily imitable business model, increase in competitive rivalry
from other rivals in industry, allegations of inhuman working condition etc (El-Ebiary, 2021).
These are causing threat to organization profitability and affects consumer mindset towards the
organization. Furthermore it has been analysed that organization with its strength such as using
their superior logistics and distribution system is providing efficient services to customers. With
the help of this strength organization is overcoming challenges such as competitive rivalry in
market segment. It provide organization advantage in terms of fast delivery reliable insecure
delivery of products and services to the consumers.
Competitive analysis
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Figure 2: CPM
Source: Vashistha, 2022
Above is the CPM, subsequent to evaluating Amazon, Walmart and Alibaba we had the
option to track down the appraisals and scores of each organization. As a gathering we felt item
assortment, cost intensity, item quality, monetary benefit, email promoting, brand and simplicity
of checkout were methodologies and things Amazon gets along admirably. Item assortment had
the most elevated score for Amazon, Walmart and Alibaba. Amazon's most reduced score was in
global market entrance, while Walmart had a similar score, Alibaba was .02 higher than
Amazon. While contrasting every one of the three organizations all out weighted scores, Amazon
was almost one point higher than Walmart and Alibaba. In this it has been analysed that with the
help of cost leadership organizations efficiently control its cost and lowers the inventory
replenishment time. With the help of this organization is overcoming its weaknesses such as call
low margin in few areas (Ives, Cossick and Adams, 2019). The organization is also taking
advantage of its innovation and differentiation model in order to bring creative ideas as well as
innovative. In addition to this, with the help of offering consumers creative solutions such as
drone delivery services company is creating differentiation from other rivals in the industry
(Jelassi and Martínez-López, 2020). With the help of this Amazon is overcoming weaknesses
such as increasing competitive rivalry from other companies like eBay, Walmart etc.
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Conclusion
Thus according to the above mentioned analysis it has been concluded that, there are number
of strategic tool which allow an organization to understand their competitive strength weaknesses
threats and opportunities of the industry where they operates. In with the help of this powerful
framework company can not only mitigate weaknesses or minimise threat but can significantly
leverage future growth opportunities. There are number of internal and external factors that can
create challenges in front of company to fulfil overall objectives in an adverse manner. With the
help of implementing strategic tool company can leverage opportunities while enhancing their
level of current competence. Amazon is a leading multinational organization which have number
of trends in terms of consumer-centric approach, successful brand image, innovation and cost
leadership, act local strategy etc. However low last margin and expansion challenges, limited
brick and motor presence and increase in competition is creating challenges in front of
organization. However this company is taking advantage of developing their current level of
strength in terms of updating the technology and implementing more advanced cyber security
measures and technologies to overcome its weaknesses which benefits them to exploit global
market opportunities in a well-defined and effective manner.
Recommendation
In the above analysis it has been stated that Amazon is having number of strengths in terms
of global brand image consumer centric approach, innovation and creativeness as their
competitive advantage superior logistic and distribution sector system etc. However to increase
its competitive rivalry and aggressive pricing strategies by other competitors in industry Amazon
is facing significant competition from other retailers, in this there are certain recommended
practices through which management can enhance competitiveness and can satisfy customers
needs and demands in an effective manner.
 Amazon is recommended to consolidate the market dominance by making significant
boost in their marketing efforts. The company is also recommended to strategically deal
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with global controversies and resolve complaints from employees in order to recover
their negative publicity in the market.
 Amazon is recommended to enhance their limited market presence with the help of
opening physical store worldwide. With the help of this company can enhance their brand
popularity and can maximise their market reach. This will significantly benefit company
to enhance its overall sales and profitability.
 Amazon is recommended to maximise their strategic entry in developing countries where
many growth opportunities are available. This will significantly in help in enhancing
overall competitive edge and further enlarge the grab between Amazon and other
competitive rivals in the industry.
 Amazon is significantly recommended to maximise their network security system in
order to protect consumer rights. With the help of this company can significantly
influence mindset of customers.
 The management of Amazon is recommended to monitor aggressive pricing strategies
implemented by other rivals in the industry. The company is also recommended to take
advantage of various measures in order to enhance their effectiveness of global strategy
and can maximise their overall sales volume.
 The company is recommended to make sure that they promote work-life balance in the
company workplace culture. With the help of this organization can significantly enhance
the job satisfaction among workers.
References
Books and Journals
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Babich, V. and Hilary, G., 2020. OM Forum—Distributed ledgers and operations: What
operations management researchers should know about blockchain
technology. Manufacturing & Service Operations Management, 22(2), pp.223-240.
Baboolal-Frank, R., 2021. Analysis of amazon: Customer centric approach. Academy of
Strategic Management Journal, 20, pp.1-16.
Chesneau, L., 2021. Amazon Versus Rakuten—Comparing Two Successful Business Models.
In Japanese Management: Market Entry, Crisis and Corporate Growth (pp. 177-191).
Correia, F.M.M.B.D.M., 2021. Amazon to become the undisputed retail champion? (Doctoral
dissertation).
Droesch, B., 2020. Amazon vs. Walmart: Who’s really winning online grocery. Media Group
Online, Inc. January, https://www. mediagrouponlineinc. com/2020/01/21/amazon-vs-
walmart-whos-really-winning-online-grocery.
El-Ebiary, Y.A.B and et. al., 2021. Online Market between Problems and Challenges. Annals of
the Romanian Society for Cell Biology, pp.7761-7770.
Ives, B., Cossick, K. and Adams, D., 2019. Amazon Go: disrupting retail?. Journal of
Information Technology Teaching Cases, 9(1), pp.2-12.
Jelassi, T. and Martínez-López, F.J., 2020. Internal Analysis: e-Business Competencies as
Sources of Strengths and Weaknesses. In Strategies for e-Business (pp. 97-124).
Springer, Cham.
Jindal, R.P., Gauri, D.K., Li, W. and Ma, Y., 2021. Omnichannel battle between Amazon and
Walmart: Is the focus on delivery the best strategy?. Journal of business research, 122,
pp.270-280.
Mäki, M. and Toivola, T., 2021. Global market entry for Finnish SME ecommerce companies.
Parbat, T.T., Jain, H., Benhal, R. and Karad, V., 2022. Analytical Success Study to Identify the
Amazon’s Managing Capability. ECS Transactions, 107(1), p.17923.
Vashistha, D., 2022. CRETICAL ANALYSIS OF OPERATIONAL STRATEGIES USE BY
AMAZON IN INDIA.
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