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Corporate world is improving in coming time frame due to emergence of various changes which may affect the corporations in different manner. Amazon is an American electronic organization whose main motive is to offer best online products to their desired consumers in order to facilitate entire society (Ipeirotis, 2010). However, assignment is going to highlight the current positioning of an association with the help of various factors. Thus, it will consist of various elements such as; PESTLE, SWOT, value chain analysis and so on. At the end of this report it will also throwing lights on changes which might incurred at Amazon prime video company because of fluctuating factors.
Overview of Amazon.inc
It is a renowned American electronic commerce and cloud based company founded in 5, 1994 by Jeff Bezoz. It is regarded as largest internet Retailer Company in terms of market capitalization and revenue while in terms of sales it is only behind Alibaba Group. Company has started its journey as online bookstore and later expanded their business in video streaming, MP3, videogames, software, audio books and other retail products. Some of the key products trending in market are Amazon Apple store, Amazon kindle, Amazon Echo, Amazon Video, ComiXology. As company is dealing in variety of products successfully, it is reflected in their revenue also (revenue at the end of 2017 is $ 177.86 billion in 2017)
Competitive advantage – It is a condition that direct a company to manufacture goods and services at a lower rate by maintaining their standard quality that will aid company to increase their sales volumes as compared to other rivals in market. While considering competitive advantage an organization must include several factors like branding, cost structure, offerings and quality, distribution and inventory, customer services etc ( Kumar and et. al., 2013).
From the time of launching live streaming service through Amazon prime video they have faced stiff competition from Netflix who have already attracted customer with their services. So for gaining competitive advantage in business market and to enhance their brand value they have started to focus on Kids series and 6 full shows for adult and in very minimal time period they have been able to increase dominance in U.K, USA, Austria and Germany. In their next phase they have planned to invest emerging economy of Asian Market (Japan, China, and India) as this country are habitual to adopt new technology in their life style.
· Customer loyalty – Company have already made their mark with variety of products in electronics. So it was easy for customers to rely on their new products easily
· Innovative ideas – Company have always relied on making innovative products to enhance their customer’s experience. Especially in electronics items their prime aim is to make new product available to customers as soon as they can
· Brand name – Amazon has captures almost all business areas in the world by providing valuable products with ethical and moral values.
· Strong management – Company is having a well-defined structure to manage their business. Each department is accountable to their work that helps in smooth functioning of organization and able to execute their ideas perfectively in business market.
· Online presence – They are present on every platform for their business activity but they are sometimes ineffective in competing with local retail business
· Bad acquisition – Not all acquisition of Amazon are productive e.g. Company has aware shares of Whole Food at $13.7 appx. , that did not go well with chain of restaurant as they feel that their long term relationship will be threatened (Rosenbloom, 2012).
· Online marketing – Digitalization has given opportunity to Amazon to perform their business activities through different platform in all over the globe
· Emerging countries – much country in the world are developing at a rapid rate. The cost of capital of people is increasing in positive manner, this has given opportunity to setup their business
· New services – As company’s prime aim to provide innovative, it will give them chances to invest in new market
· Competition – Amazon Prime video will face completion from Netflix from all over the world as they will face intense competition from them.
· Cost – Cost of product is at higher rate that is not affordable by many in emerging market
· Substitute products – There are other applications and websites available in market that can provide threat to proceedings ( Difallah and et. al., 2015).
Elements help in gaining competitive advantages
To have competitive advantage an organization has to consider several factors that will help them to have an upper hand over their competitor
Supply chain – it can be defined as a system that helps in organizing activities, people, resources and information so that it can be directed in an effectual way. Amazon prime have always tried to give best experience to their customers so they invest a huge amount on maintaining inventory and making better supply chain.
Value chain – It is about providing values and features in products. Amazon prime has different plan and packages people can choose according to their need. They also provide some added features to make their customers interested
Core competence and skills – It is a coordination resources, skills and ability that distinguish any firm in market place. Amazon always tries to have unique identity in market with innovative ideas and features.
Technology – In current business market technology and innovation goes side by side. A company cannot grow with outdated ideas and technology. Amazon always focus implementing technology in their business (Hargrave and Kis-Katos, 2013).
7Ps – (Marketing Mix). It is a very efficient tool that helps in identification of several factors and helps in making strategies
Product – It is an item that is manufactured to satisfy need of people. Every product Amazon is making is earning revenue in market.
Price – It is an amount at which product is sold. Company is having different price range of product in different country.
Place – Analyzing the Ares at which product has the capability to do more business e.g. Amazon prime seeks opportunity to invest in emerging country where competition is less
Promotion – It is about providing knowledge about product in market. Company is using digital media to promote about their product
People- Company’s strength lies with their employee Amazon have been able to properly manage it
Process – For getting right output efficient process is necessary. Amazon has adopted a potent strategy to launch their product in a procedural way
Physical environment – Forecasting environment before investing is necessary to fetch maximum output. Company is having a separate team from demand forecasting (Shen and Bissell, 2013).
Brand value –This is a future value or net present value of cash flow of a specific personality or brand. Amazon is being able to maintain their brand value by providing quality at a reasonable rate.
Marketing – It is about promoting and advertising about product to increase their sales. Amazon is using different printed media and digital media
HR- These are the people responsible for rising and maintaining workforce in an organization. Amazon is having potent managers those are able to perform each task related to organization perfectively.
Unique selling point – This is defined as a factor that is used to differentiate a product from competitor. It can be quality, quantity, cost or innovative ideas that a company put in their business activity.
Innovative strategy - Manufacturing new items that are innovative and different from other that can help in making customers experience charismatic.
Both these factors are very crucial in getting competitive advantage in market e.g. through low cost La carte channel package company is able to gain competitive advantages over Netflix and local competitor.
Changes is a continuous process which is essential for company success and development because every consumers wanted to try something new or different in order to improve their learning about products. Thus, Amazon is an association which plays a very eminent role in offering best facilities to their clients such as; standardized products, on time delivery, modern technologies hence forth ( Minton and et. al., 2012). Therefore, various factors which helps in studying the current positioning of selected firm is discussed as follows:-
Political factor: Amazon is basically an American company and is the world’s largest provider of cloud infrastructure services. Amazon prime video is a service which is provides by Amazon to watch video, movies, serials, etc. This factor mainly focuses on various government activities and their effects on the company. As Amazon deals in online sector, they have to focus on political external factors like political instability of country, government support for e- commerce, increasing effort of government towards cyber security, etc. Political stability provides several benefits and opportunities for Amazon to expand and diversify their business but sometime they have to face political hurdles. Expansion of Amazon is some countries is difficult as they have different online policies, so this become a barriers which become difficult for company to cross and expand their business in some country. Various legal regulations also interfere at the time of purchasing goods on e- commerce websites.
Economic factor: These factors are always the most important for every company to consider while marketing their products and services. They [pit great influence on market as well as market conditions. If a market has good economic condition, it will ultimately lead to more profits to the company and vice versa. In case of Amazon, people prefer buying goods online rather than going out to the shops. This helped the company to earn profits. Even in the time of recession, company can perform well as customers will buy their regular and day to day items no matter what is the condition of economy.
Social factor: It greatly determines the success of Amazon Company. This factor is basically based on buying and purchasing factors of customers, income level of people, etc. Amazon prime video is a great place where people can watch their movies and videos without stepping out of their houses and can also enjoy one month free service. This has greatly attracted the customers form all round the corner of world. This has maximized the profitability of the company.
Technological factor: This greatly affects Amazon operation as it mainly operates its business online. They have to update their technologies services with recent advancements at certain interval of time so that they can avoid technological obsolescence. Company have opportunities to improve their performance based on the rapid increase if IT efficiency. They can minimize operational cost and maximize online retail productivity. They can also face cybercrime as transactions from bank account are done directly on e-commerce and they can be hacked by hacker and crackers. So, to reduce that, they can implement various securities and firewalls on their websites to avoid hacking and leakage of data (Pathak and et. al., 2010).
Environmental factor: As Amazon is an e-commerce websites, then also they have to focus on sustainability, packaging, waste reduction, energy consumptions, etc. Company have invested a lot in Corporate Social Responsibility (CSR), sustainability, waste reduction, renewable energy, packaging, etc. They also focus on different sustainability projects.
Legal factors: It is necessary for a big company like Amazon to remain compliant with the law. They have a different department which oversees all legal issues and challenges. It not only include labour laws but also other areas here legal compliance is necessary. Any violation can result to huge fines and charges against company. Laws differ from country to country, so they should be compliant with ever legal aspects to achieve success.
From the above graphical representation it has been assessed that company is enjoying major competitive advantage by using various useful methods. As a result get succeeded in establishing their positive image at worldwide level by gaining maximum trust or loyalty of distinct clients.
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After analysing the entire information it has been identified that company needs to conduct major changes at workplace with the use of modern technologies for enhancing their sales performance. Along with this they also get succeeded in overcoming their business problems by defeating their competitors and tries to maintain their image in order to continue their business for longer time period. Therefore, in coming 2 to 5 years managers of Amazon needs to target youngsters because online services are used by young generation for acquiring advantages.
From the above report it has been summarized that in order to become a successful organization company needs to understand each or every aspect for attaining their short and long term vision by fulfilling the required of desired clients. Therefore, analysis of macro environment, competitions, marketing strategy was explained in this report for identifying the recent place of Amazon which is a most leading online company. Hence, it helps in making corrective decision at workplace by analysing the several elements in order to attain competitive advantage by establishing goodwill at marketplace.
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- Kumar, D.S and et. al., 2013.Computer-based analysis of seller performance. U.S. Patent 8,510,178.
- Rosenbloom, B., 2012.Marketing channels. Cengage Learning.
- Difallah, D.E and et. al., 2015, May. The dynamics of micro-task crowdsourcing: The case of amazon mturk. InProceedings of the 24th International Conference on World Wide Web(pp. 238-247). International World Wide Web Conferences Steering Committee.
- Hargrave, J. and Kis-Katos, K., 2013. Economic causes of deforestation in the Brazilian Amazon: a panel data analysis for the 2000s.Environmental and Resource Economics,54(4), pp.471-494.