Comprehensive SWOT Analysis of Amazon: Business Strategy Review

This report presents a SWOT (Strengths, Weaknesses, Opportunities, and Threats) analysis of Amazon, examining the company's position in the online retail industry. The analysis begins with an overview of Amazon's founding and its evolution into a global e-commerce leader, highlighting its international expansion strategy. The strengths section details Amazon's market dominance, innovative approach, and cost leadership strategy. Weaknesses include potential profit margin erosion, over-reliance on online platforms, and diversification challenges. The opportunities section points to growth in online payment systems, product portfolio expansion, and the increasing number of online buyers. Threats include security concerns, destructive pricing strategies, and competition from local retailers. The report concludes by emphasizing the importance of focusing on profitability and strategic planning for Amazon's future success. References from academic sources are included to support the analysis.

Running head: SWOT ANALYSIS OF AMAZON
Swot analysis of amazon
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1SWOT ANALYSIS OF AMAZON
The date of foundation of Amazon is June 1994. It was founded by Bezos (Qumer and
Purkayastha 2019). Amazon is the leading online retailing store in the world and the
successful story of it has prompted other online retailer’s physical, brick as well as mortar
and hardly they have a presence online. It is also known as the equivalent of Walmart, an
online retail company because both have reached a high level and left a global footprint and
has an aggressive strategy in pricing of a product. The company is facing few challenges too,
which they have to improve over the year or so (Ritala, Golnam and Wegmann 2014).
International strategy of amazon
Amazon has extended the business all over the world. The accounts of international
seller has registered themselves to amazon and it allows any of the sellers in order to sell their
products in any of the market place and therefore it gives an abrupt spreading of their
products to all the customers (Amazon.com 2019).
Strengths:
 As given in the article, amazon had interrupted the retail industry online as well as
renovated itself from a player of e-commerce to a powerful platform related to media
which focussed on innovation and growth (Qumer and Purkayastha 2019).
 As amazon is known as the online retailer across the world which is leading at the
moment, amazon’s strengths originate initially from a three thrust of strategy on
differentiation, cost leadership and focus.
 The above strategy helps the company to give a rise in their profit margin and also
helps the shareholders of the company to originate its value.
 Amazon is successful to recall top of the mind of their registered customers
worldwide and this thing help it in order to enter into the new markets which were of
no bounds previously for many companies related to e-commerce (Amazon.com
2019).

2SWOT ANALYSIS OF AMAZON
Weaknesses
 Amazon is in danger that it might lose the profit margin as the company offering its
customers to buy any product without the cost of shipping. As a result, they might be
unable for the optimization of their cost due to this risky strategy.
 We all knew that amazon is selling its product through online platforms only. This
thing of single mindedness focus might affect their norms of business and they should
be involved in a thought process of its business expansion into emerging market
(Qumer and Purkayastha 2019).
 Nowadays, diversification strategy of amazon allows its focus in order to vacillate
from their core skills of selling books through online and gives the permission itself in
order to venture into newer areas to focus on. While it might be a better strategy if
they think from the diversification of risk point of view. The company has to be aware
of losing its advantage of strategy because it moves here and there from its main
ability (Hassan, Sistani and Raju 2014).
Opportunities
 Amazon has its own system of online payment, it has the opportunities to rise its
profit margin though it as the customers is mostly concerned with the security or
privacy of what they are making the payment through online.
 Amazon may increase the offered portfolio in order to stock in more products than the
present availability which will help to place the company in a position where there is
much strengths as well as comfort as this have a chance to translate into revenues
which is higher than the normal (Qumer and Purkayastha 2019).
 There is a certain rise of the buyers on or over the internet.
 In US e-commerce, there is an increase in forecasting (Jia 2015).

3SWOT ANALYSIS OF AMAZON
Threats
 The success of amazon is being threatened by the sudden increase in concern over the
security issue behind the online shopping as nowadays it frequently has a chance of
theft and the issue of the hacker which exposed their consumer data. As a result,
Amazon have to deal with this issue and find a quick solution to resolve this problem
as soon as possible otherwise it may lose some of their customers because of this trust
issues (Qumer and Purkayastha 2019).
 The company has to receive many complains from their publishers and from their
rivals in the online retail industry because of its destructive pricing strategies. The
obsessive focus upon cost leadership which amazon generally follows has becoming a
source of trouble for amazon as because their competitors is worried with amazon
because it becomes a threat to their business.
 At the end, the significant competitions faced by amazon from online local retailers
who are more agile as well as nimble when it is compared to its behemoth type of
strategy. This means that amazon cannot lose its sight over its condition of local
market in the hunt of its strategy globally (Correll 2018).
The company has cut down its task as far as its planned strategies for future are
worried about and this analysis of SWOT will provide a specific guide as well as a roadmap
which the company can be implemented moving forward in the near future. The key aspects
that evolves from the above SWOT analysis is that the amazon should have to focus more on
profitability rather than volumes if they thought of competing with their rivals in the near
future where the market leadership as well as the volumes are not only the factors to add
values to their stock.

4SWOT ANALYSIS OF AMAZON
References
Amazon.com. (2019). Amazon.com: Online Shopping for Electronics, Apparel, Computers,
Books, DVDs & more. [online] Available at: https://www.amazon.com/
Correll, N., Bekris, K.E., Berenson, D., Brock, O., Causo, A., Hauser, K., Okada, K.,
Rodriguez, A., Romano, J.M. and Wurman, P.R., 2018. Analysis and observations from the
first amazon picking challenge. IEEE Transactions on Automation Science and
Engineering, 15(1), pp.172-188.
Hassan, S.M., Sistani, A.J. and Raju, R.S., 2014. Top Online Shopping E-companies and
their Strength and Weakness (SWOT). Research Journal of Recent Sciences
Jia, Q., Shen, Z., Song, W., Van Renesse, R. and Weatherspoon, H., 2015. Supercloud:
Opportunities and challenges. ACM SIGOPS Operating Systems Review, 49(1), pp.137-141.
Qumer, S. and Purkayastha, D. (2019). Amazon.com's business model and its evolution.
Ritala, P., Golnam, A. and Wegmann, A., 2014. Coopetition-based business models: The case
of Amazon. com. Industrial Marketing Management, 43(2), pp.236-249.