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Assignment On Amazon

Amazon operates in the competitive online retail sector. It faces competition from both large and small retailers who compete for customers. Some of Amazon's main competitors are eBay and Alibaba. This high level of competition can lead to price wars that threaten companies' ability to be profitable. Amazon aims to increase its market share by offering competitive prices. Successful online retailers also rely on strategic alliances with logistics companies to ensure reliable global distribution networks for delivering products to customers on time. Both opportunities and threats in the external environment, such as competitors' successes or failures, influence Amazon. An analysis found that factors like growing internet usage and stiff competition have the biggest impact on Amazon's business. While Amazon has been able to take advantage of opportunities,

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Apurva Sharma
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79 views4 pages

Assignment On Amazon

Amazon operates in the competitive online retail sector. It faces competition from both large and small retailers who compete for customers. Some of Amazon's main competitors are eBay and Alibaba. This high level of competition can lead to price wars that threaten companies' ability to be profitable. Amazon aims to increase its market share by offering competitive prices. Successful online retailers also rely on strategic alliances with logistics companies to ensure reliable global distribution networks for delivering products to customers on time. Both opportunities and threats in the external environment, such as competitors' successes or failures, influence Amazon. An analysis found that factors like growing internet usage and stiff competition have the biggest impact on Amazon's business. While Amazon has been able to take advantage of opportunities,

Uploaded by

Apurva Sharma
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ACTIVITY 2 (AMAZ0N)

301 – STRATEGIC MANAGEMENT

SUBMITTED TO: DR. SUBMITTED BY: ANSHI GUPTA


VANDANA BHARTI MA’AM (MBAN1MG19007)
AMAZON
Amazon operates in the online retail sector that has many participants.
The sector is made of both big and small retailers that compete for
customers. Some of the major Amazon’s competitors include e-bay and
Alibaba (Zhu & Kraemer 2005).  The existence of many players increases
competition rivalry. The rivalry can lead to price wars where each player
seeks to offer the best price. These wars are a threat to profitability and
threaten the seller’s ability to recover costs. Amazon has been offering
competitive prices with the aim of increasing its market share.

The success of an online retail sector is determined by the firm’s ability to


establish reliable distribution networks that ensure the products reach
customers on time. Most online retailers form strategic alliances with
logistics companies who deliver the products to customers at a fee (Zhu &
Kraemer 2005). It is technically impossible for a retailer to establish an in-
house distribution network spanning the globe and this necessitates
strategic alliances with logistics firms.

Every company operates in the business-interconnected medium. It is


logical that the situation in the market, successes, or failures of the
competitors, and a vast variety of other reasons influence any company in
various ways. The influence of the external factors cannot be controlled
directly, so they can be called Opportunities and Threats
EXTERNAL FACTORS EVALUATION MATRIX
An External factors evaluation model is based upon the external
audit and evaluates key external factors that affect a firm and also
studies how well a firm responds to these factors. In our evaluation
of Amazon, we found the following factors that affect Amazon’s business
and profitability.

Based on the weight assigned it can be concluded that the growth of


internet users, the heavy weight, stiff and the ever-growing competition are
perhaps the most important factors in online retail industry, having a high
effect on Amazon’s business. A weighted score of 2.94 (above average and
midpoint 2.5) shows that the Amazon. On has been able to manipulate the
opportunities and have been able to counter threats and is doing rather
well but its business isn’t still great. Amazon can still manipulate the opportunities
and counter the threats that it has failed to do i.e. Amazon has not been
able to work well with the foreign exchange market and it has not been able
to expand its business activities in Asia
COMPETITIVE PROFILE MATRIX
The Competitive Profile Matrix (CPM) is a tool that compares the firm and its
rivals and reveals their relative strengths and weaknesses In order to better
understand the external environment and the competition in a particular
industry, firms often use CPM[2]. The profile matrix identifies a firm’s key
competitors and compares them using industry’s critical success factors. The
analysis also reveals company’s relative strengths and weaknesses against its
competitors. As a result, a company can easily identify the areas it should
improve and the areas it should protect.

The average weighted score under this evaluation of a firm and their
competitors is 2.5. All three firms scored above average showing that
they remain competitive in the online retailing market. Ebay.com and
Amazon.com, however, scored the highest and represent the biggest
opposition to one another. Both firms had comparable scores in all
the critical success factors with the main separation being that
Ebay.com has a better financial position which affects profits and
losses.

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