Swot Analyses on Amazon.Com 2011

Amazon.com SWOT Analyses

With the following SWOT analyses I am going to examine the company's strengths and weaknesses -internal factors, and then evaluate the opportunities and treats - external factors. This will help us understanding the comparativeness- on how to avoid or keep weaknesses and threats under control, which contributes towards the company's ability to gain power .I will also conduct a table with the 3 major strengths and weaknesses, outlining why they are major; than summarise it and score it in a table at the end of this essay.

STRENGTHS

"A Company has strength or a high competence activity if it can out-perform most competitors on a competitive factor that customer's value"

As outlined in the case study Amazon.com became an online superstore outperforming other businesses during major macro economical events like the Bubble Burst (2000) and the Global Recession (2008). It was growing constantly from the start up, up to today. Bezos had great ability understanding the company's competitive advantages and applying them wisely, therefore creating core strengths that is driving the company forward today.

I am going to outline some of these strengths below and summarise the major three of them in a matrix at the end of the essay.

 RAISING MONEY: Bezos managed to get money from family, Wall Street friends and other investors. They had Amazon.com as a resource and he have turned the money towards the company's main focus; growth and customers, while making it clear to all the investors that they had to be in it for a long time to see profitability. In 2001 Bezos stated: After four years of single minded focus on growth, and then just under two years spend almost exclusively on lowering costs, we reached a point where we could afford to balance growth and cost improvement, dedicating resources and staffed projects to both.

 CUSTOMER FOCUS- Through sales and the growing internet penetration, they had the chance to gain more customers. They have recorded their customer base and have created a special way to looked after them - for example: increasing customer buying experience, faster one click order, product suggestions, updates about new products & categories, electronic gift certificates etc. - which gained them customer loyalty. Loyal customers are repeat customers who contribute towards sales in a large degree.

 GLOBAL BRAND IMAGE: Amazon.com from an online bookstore has expanded to supplying everything from A to Z, including different products and services. By choosing Amazon as the name for the business after the largest river on earth in South America, has also contributed towards the clear portfolio of wanting to grown to be the largest.

 STRATEGIC INVESTMENT- Turning money continuously into improvements, growth and investing they were able to achieve the desire for bringing customers value through selection, service and convenience. A couple of examples for improvements & growth are : establishing their executive team and growing employee base, technological innovation, better customer service, secure payments, improved logistics & warehouses closed to airports, better and wider product selection, expanding the business to different countries. A couple of examples for strategic

investments are: Ashford.com and eZiba.com - these investments weren't traditional discount items.

 INFORMATION MANAGEMENT- With the existing resources in the form of customers they were able to see what customers were purchasing while recording customer satisfaction and dissatisfaction, which helped them to generate knowledge about what customers wanted, the chance to figure out how to give it to them and the ability to create the appropriate resources for being able giving it to them.

 LARGE PRODUCT PORTFOLIO- Through effective information management they were aware of the purchased and demanded products. Making these demanded products available for their customers , have increased sales and have created today's product categories such as: Movies, Music & Games; Electronics & Computers; Home, Garden & Tools; Grocery, Health & Beauty; Toys, Kids & Baby; Clothing, Shoes & Jewellery; Sports & Outdoors; Automotive & Industrial.

 STRATEGIC AQUISITION - Once they have created the categories the expansion to different markets - such as Germany, UK, Japan, Canada, France, China, Italy, and Spain- begun.

To support expansion to other countries they begun to acquire companies; just to mention a few: Bookpages (one of the largest online bookstores in the UK), Telebook (Germany's no.1 online bookstore). These acquisitions have also contributed towards the easier accessibility of the demanded products and towards the main goal: growth.  TECHNOLOGICAL INNOVATION - It is possible to sustain your customers through technological innovation of both services (easy search, order & check out; extensive product information, reviews and ratings; delivery updates etc) & products (Kindle and other software features). Bezos concluded: "by building new technologies ourselves we get to offer a better customer experience for millions of people. Does this give us an advantage? Absolutely but you have to continue to innovate. This is something that has to b e refreshed every day, every week, and every year." Some of Amazon's technological innovations include, copyrights, search engines and cloud computing that has created a new market for them together with the arrival of the new electronic book Kindle.

 MULTINATIONAL ORGANIZATON - As stated above Amazon.com is present in nine countries up to today. Competition in the online sales business increases day by day Amazon is keeping at the top thanks to his size. Thus developing Amazon.com into a multinational organization at the time- when being one of the first dotcoms- definitely works towards its competitive advantage. The continuous growth of the business has delivered loyal customer base and product availability worldwide while the focus of the vision of the company remains.

The above outlined are all dynamic capabilities as proven with case study examples, Amazon.com was able to adapt its competences- something that the organisation does- over time. Amazon.com also managed to create the appropriate resources - something the organisation has access to- therefore we can call these dynamic capabilities strengths. The three major strengths I would pick are Technological Innovation (it has helped to survive the global recession, Kindle and make profit), Multinational Organization (through its size it was able to survive the bubble burst a make a profit) and Customer Focus ( by having loyal