AMAZON.

COM

Strengths

•    Amazon is the leading online-retailer regarding media-products that educate and entertain.

•    Amazon being a powerful global brand is recognizable because of two main factors: It is one
of the original dotcoms that developed a customer base of over 30 million people in a period of
about 10 years, and also known as an initiator for online technologies for e-commerce that made it
one of the first online-retailers.

•    Customer Relationship Management and Information Technology both work as a driving
force for Amazon’s business strategy. The firm records user data on buyer behavior, which
enables them to offer to an individual any specific item or bundle of items, usually based upon
the preferences verified through the purchases or items visited.

•    It has a diversified product portfolio such as books, CD/DVD; it has also gained additional
customers in other product areas that indicate the need for the business to grow through new
customer bases.

•    User Reviews are used to share information and provide feedback regarding that information
that helps in stimulating sales.

•    It has also provided the option of a market place where a seller can sell an unwanted item
online and a buyer can buy it from that seller, there is usually a difference regarding the
competing retailers as it ensures customer loyalty and trust, which makes the bond with the
customer stronger and the loyalty is more durable.

•    It provides a product called “AMAZON MP3”, which is an expansion regarding the music
download, and it is slightly cheaper than its counterpart iTunes.

•    It has also produced a wireless device that reads electronic books, the product is known as
“KINDLE”. Electronic books for this device can only be bought from “amazonkindle.com”.
Being a wireless device, it holds an option to directly download the required e-book using 3G
wireless.

•    Purchases that cost more than $25 provide the shipping and on-time delivery free of cost. The
customer also holds the option to having a ‘Guaranteed Accelerated Delivery’ that is the delivery
speed for the product to reach the destination.

Weaknesses

•    There is a risk to the brand image regarding the product expansion for different products that
are not related to books, Amazon is the number-one online-retailer, and the more product
offerings might weaken the brand due to the confusion it embeds on the consumer.
•    Online-retailers require focus on their technology which is quite important. The system
requirement, especially the maintenance of the systems is held to be constant that should be
maintained in order to ensure customer satisfaction by providing the level of service the
customer is expecting without any delay.

•    It is dependent on external delivery firms that carry out the delivery function that may lead to
uncontainable problems regarding the delivery service and it may potentially increase costs, with
the wider transportation industry i-e rising fuel and increased vehicle taxation.

Opportunities

•    The firm can build partnerships with the public sector, as it will use public libraries to provide
a search option and catalogue for potential users which will also cover the antique and rare
books.

•    It can develop relationship with the publishers for exclusive offers and launch authors that are
exclusively for the firm which would generate growth because consumers have a tendency of
reading the author again.

•    It can invest in maintaining the customer expectation which will promote the customer’s
loyalty towards the firm.

•    The firm can vend its expertise to many store groups.

•    It can partner with many e-com retailing firms.

Threats:

•    Internet businesses attract competitors quickly, and it is quite difficult to maintain their
products as differentiated ones, which makes it difficult to differentiate its brand from that of the
competitors.

•    Competitors will grow more as expansion occurs.

•    Transportation costs are increasing due to the high fuel price increments, and which will
directly impact the charged price on the customers because these charges are paid to a third party
and it is assumed that these will be directly passed onto the consumer which may have a negative
impact to brand perception from the customer point of view.

•    Good economy circumstances will initiate the price level to go down which in return will
hold the customer expectations regarding the promotional deals that will be the main focal point
for all product areas but with smaller economies-of-scale, the marketplace will not have the
sufficient offers on buying power.
•    The expansion of Amazon will need to consider the facts and the figures regarding the
country it is expanding in. It will need to consider the trends and customs in order understand
and make potential customers.