Value of a SWOT Analysis for Amazon.com †MyAssignmenthelp.com

Question: Discuss about the Value of a SWOT Analysis for Amazon. Answer: Introduction and Background to the company Amazon.com,Inc, headquartered in Seattle, Washington, is essentially an American electronic commerce as well as a cloud computing corporation operating in the online shopping industry. Amazon, the tech giant is essentially the largest internet based retailer in the entire in terms of the total sales as well as market capitalization (Amazon.com 2017). Current Market: According to current industry reports, Amazon is a leading e-retailer in the United States that is close to US$ 136 billion during 2016 in terms of net sales. During the first quarter of the year 2016, the e-retailer essentially declared over and above 310 million dynamic customer accounts worldwide (Amazon.com 2017). Owing to the global scope of the company Amazon, it can be said that this company is one of the most valuable brands of the world. Product Lines: The products and services provided by the American organisation Amazon are as follows: -Retail Goods (customer electronics, DVDs, CDs, food products, baby products, heath as well as personal care items, industrial as well as scientific supplies, jewellery, musical instruments, automotive goods and many others. In addition to this, Amazon also has amazon.com Auctions that is essentially a web auction service. Furthermore, the company also launched AmazonFresh that is necessarily a grocery service offering perishable as well as non-perishable foods (Amazon.com 2017). In addition to this, Amazon also declared the launch of Vine.com for purchasing green products, counting groceries, household items as well as apparel. Amazon also offers certain exclusive services such as Amazon Prime that is a membership offering free two day shopping within the contiguous United States on all eligible procurements. Amazon also launched Kindle in the year 2007, an e reader under the product section customer electronics (Amazon.com 2017). Apart from this, Amazon introduced the digital conte nt (Amazon app system, Amazon Payments, e-books and many others), Amazon Games, Amazon Art, Amazon Video, Amazon Drive, Private Labels as well asexclusive marketing arrangements, Amazon Studios, Amazon Web Services, Amazon Local and Amazon Wireless among many others. SWOT Table Strength - Presence of strong background and availability of deep pockets- based on the early successes with books, Amazon now has different product categories that take into account electronics, toys, games, home, brown goods as well as white goods among many others. - Customer orientation- The robust customer relationship management system of the company Amazon has developed customer oriented processes in a bid to record specific data on buying behaviour of customers (Kotler et al. 2016). This helps in offering individual items, associated items, bundles based on preferences studies through previous purchases or else items visited (Amazon.com 2017). - -Cost Leadership: In a bid to differentiate, the management of the corporation has effectively developed different strategic alliances with other corporations to offer superior customer service (Goworek and McGoldrick 2015). - Efficient Delivery Network: With different strategic partners and owing to its Amazon fulfilment centres, Amazon has generated a deep as well as structured network of distribution in a bid to make the product available at remote locations. - GLOCAL Strategy: By way of utilization of the Go global and act local strategy, Amazon has effectively fought with the domestic e-commerce corporations by means of absorbing and by forming with supply chain corporations (Armstrong et al. 2015). - Acquisitions: Acquisition of corporations such as Zappos.com, IMBD.com and Junglee.com has proved to be successful as well as a revenue generating step for the e-commerce giant (Amazon.com 2017). Weakness - Shrinking Margins: Owing to extensive delivery network as well as price wars, the margins of Amazon are shrinking, that is directing to losses (Hollensen 2015). - Tax Avoidance Issue: Amazon has attracted negative publicity on account of Tax Avoidance in nations such as U.S as well as U.K. Majority of the revenue is generated from different well established and traditional markets. - High level of debt: In different developing nations, the company Amazon is still striving to make the business profitable. This in turn can affect the overall profitability of the entire group leading to high level of debt (Foxall 2014). - Product Flops: The company Amazon launched the fire phone in the market of U.S, that turned to be a bog flop. In addition to this, Kindle fire also failed to pick up as intensely as Kindle did. This, several number of flop products created a dent in the pockets of Amazon (Amazon.com 2017). Opportunity - Backward Integration- Amazon introduced several in-house brands in diverse product categories. This also has helped the company to differentiate their offering and make profits in highly competitive e-commerce markets (Kotler et al. 2014). - Global Expansion: Expansion primarily in Asian as well as developing economies can help Amazon as there are several markets with low competition industries and are not saturated as the developed economies. - Introduction of physical stores outside U.S- By introducing physical stores outside U.S, Amazon successfully engaged with the brand, leading to increase in repeat purchases and increase in the base of the overall customer base. Threat - Low barriers of entry in the industry- Low barriers of entry affect the present players of the business since more and more corporation implies tough competition, stiff price wars, shrinking margins as well as losses leading to questioning of the sustainability of all the players (Miquel-Romero et al. 2014). - Government regulations: There is lack of clarity on different issues associated to the FDI in diverse multi brand retail. This can prove to be a big hurdle in the success of the e-commerce players in different developing countries (Amazon.com 2017). - Local Competition: There are several local players that acquire bites from the overall market share, thereby, making it hard for a big player such as Amazon to generate profits (Nordhielm and Depena-Baron 2013). Market Description: The chosen market for the consumer electronics products of the company is selected to be Pakistan. Market Size: Electronics can be considered to be worlds largest industrial sector and most productive consumer market that has an annual turnover of US$ 1.5 trillion. However, Pakistan lacks suitable technology as well as expertise to establish a viable industrial base in electronics sector, since only 3%is contributed by this sector. However, the consumer electronics market is anticipated to grow at an annualized average rate of about 13.3% to $3.3 billion during the year 2016. Market Leaders: The market leaders in the consumer electronics market in Pakistan include DWP Group Pakistan, Concentration in Market: In particular, concentration in market is essentially a function of the total number of firms and their respective shares of the entire production in a market (Meffert 2013). According to the reports published by the Business Monitor International, it can be said that the market of consumer electronics items in the area of Pakistan that takes into account computing devices, diverse audio video product, televisions, and mobile handsets is proposed to be of the value that is around $ 2 billion registered during 2012. However, this is predicted to rise to 3.3 billion during the year 2016, as per a newly released report. Distribution and Industry Growth: As per reports, the growth of the customer electronics market in Pakistan is primarily driven by enhanced infrastructure in information technology and greater availability of credit. The considerable potential of the market is presently low due to the presence of a huge grey market, existence of very weak rights over IP (intellectual property), unsteady economic as well as safety conditions along with feeble channels of distribution (Baker and Saren 2016). According to reports, computers account for 17% of the market and audio-visual account for 36%. Findings Explanation of the SWOT Table: Based on the SWOT analysis and analysis of the customer electronics market in Pakistan, it can be hereby said that the development of the market essentially depends on actions to decrease the overall influx of unlawfully imported TVs along with fake brand mobile receivers. Nevertheless, it is estimated that the overall development will be driven by improved infrastructure of information technology as well as higher availability of credit (Keller and Kotler 2015). SWOT analysis helps in understanding the fact that low barriers to entry in the Pakistan market can adversely affect Amazon. In addition to this, lack of clarity on matters related to FDI might unfavourably affect the success of the company. However, expansion of the company and distribution of the customer electronics products in the market of Pakistan can be said to be aligned with the global expansion strategy of the company. In addition to this, the customer orientation strategy can also he lp the company to develop the products (Baker and Saren 2016). Recommendations Target Market: The target market for the consumer electronic items of the company Amazon can be classified based on market segmentation variables as stated below: Demographics: Particular characteristics that can be commonly utilized in demographics include age, income, race, gender, marital status, occupation as well as education (Baker and Parkinson 2016). The management of the company Amazon might possibly target the specific market of male consumers aged between 18 years and 35 years, starting the college goers to professionals. Lifestyle as well as psychographics: Lifestyle as well as psychographics can be considered to be an effective approach that can put emphasis on different shared actions, interests as well as behaviours of specific customers (Eastman et al. 2015). The management might consider studying the interests, opinions, attitudes as well as values of customers. This can help in designing the products as per the tastes as well as preferences of the customers. Geographic: The new market of Pakistan can be classified as per the size, population, density as well as different climatic factors such as traits of geographic segmentation, together with region or else location. As per the results of market analysis, it can be hereby said that this market will continue to be a hotbed of especially future demand. Unlike the markets of the developed nations in the nation, where the sales of the customer electronic items are fuelled by innovation, the success of the company in Pakistan will be based on offering maximum number of features at low cost (Baker and Parkinson 2016). In addition to this, targeting the rural market can prove to be different from that of urban market. Behaviouristic: The management of the company Amazon can consider behaviouristic strategy of segmentation based on the interests or else experience with the company or else products. Particularly, advantages sought, utilization, loyalty, and outlook or else status of customers can be considered as the common characteristics. This factor can help the management of the company to target a very broad market seeking different advantages, namely economy, routine, luxury or else status (Eastman et al. 2015). In essence, targeting novel prospects can be considered to be distinct from the way of targeting brand-loyal clienteles. New Product Description Designed for the identified target market Relevant marketing mix variables Product: the product mix need to support the mission as well as vision statement of the company and thus need to consider continued expansion as well as diversification of products. Thus, the consumer electronic items of the company now need to include not just online retail but also a variety of other items that can address the needs of the market. Price: The management of the company can focus on the pricing strategy that a corporation can use in selling the products. In particular, the management of the company can use low prices as a method of attracting customers to the e-commerce websites as well as product offerings (Keller and Kotler 2015). However, the management of the company can consider the prices of the competitors as a basis for pricing of different Amazon Basics Products. Place: The management of the company can consider the official e-commerce websites, Amazon Books (physical stores) along with others in order to reach the e-commerce consumers. The annual Amazon Services Summit organized in different locations can enable the organization to reach potential clientele in the new market (Baker and Saren 2016). Promotion: This component of the marketing mix essentially involves specific strategies as well as tactics that a corporation can utilize to communicate with the target market (Nordhielm and Depena-Baron 2013). The strategies along with tactics that can be used in promotional mix as per the e-commerce business include advertising, different sales promotion, public relations as well as direct marketing. Customer Value Proposition: Customer Value provided by your new product The features of the customer electronic items offered by the company can provide the flexibility to choose the alternative that best meets the needs of the customers. The authorised service of the company can deliver high quality services both pre and post sales by the company. The wide distribution networks and transportation facilities of the company can prove to be an effective proposition that are valued by the customers (Baker and Saren 2016). Way the new product fits with the SWOT analysis: Justification of the choice of new product using at least one strategy (S-0, W-O) The customer electronics items can fit with the SWOT analysis. The cost leadership, customer orientation strategy, strong brand equity and effective delivery network that are considered to be strengths of the firm can be properly aligned with the new product development strategy of Amazon in the new market of Pakistan. The opportunities of the company Amazon include backward integration, global expansion and introduction of physical stores. In this case, strategy of worldwide expansion is also in line with the new strategy of the company to expand in the new emerging market base of Pakistan. Thus, the delivery of high quality consumer electronic products at low prices can be said to be an effective strategy that are said to satisfy the needs of the market (as analysed using SWOT). References Amazon.com. 2017. Robot Check. [online] Available at: https://www.amazon.com [Accessed 3 Aug. 2017]. Armstrong, G., Kotler, P., Harker, M. and Brennan, R., 2015. Marketing: an introduction. Pearson Education. Baker, M.J. and Parkinson, S.T., 2016.Organizational Buying Behaviour: Purchasing and Marketing Management Implications. Springer. Baker, M.J. and Saren, M. eds., 2016.Marketing theory: a student text. Sage. Eastman, J.K., Eastman, K.L., Gleim, M.R., Lawson, S.J., Robinson, S.G., Huang, L., Moore, R.L., Moore, M.L., Shanahan, K.J., Horky, A. and Mack, B., 2015. Marketing management. 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