An Analysis of Amazon.Com

An Analysis of Amazon.Com

Introduction

The paper discusses the strategies of Amazon.com as a successful e-commerce business. The content covers in depth analysis of the business by using Porter's five forces and SWOT analysis.

Vision and Mission Statement

Amazon.com seeks to be a customer focused company, where customers can find and find what they want to buy online, and endeavors to provide customers with the lowest possible prices. Site has a number of identification and services, such as one-click purchasing, customer and editorial product reviews, gift registries, gift certificates, wish lists, ads, restaurant and travel film and photo processing.

Porter's Five Forces Analysis

Force 1: The bargaining power of customers

Although some sites have developed a B2B solution, I will focus only on the B2C side. Demand is very fragmented. The bargaining power of customers is theoretically weak.

Force 2: The bargaining power of suppliers

Apart from exceptions, many providers are in each market segment. They are not really in a position to dictate terms to sites and thus to recover much of the margins. They are even more sites that would be leader in a strong position to face negotiation saw the big number they do.

Force 3: The substitute products

E-commerce has taken market share away from traditional stores. In turn, sites e-commerce going to see another offer encroached on their own. I think it useful to say a few words about the phenomenon of private sales on the net. While consumer electronics is only a small part of goods and services sold through this kind of site, the risk with the economic crisis is that more and more users use this type of platform to make purchases.

However, industry growth expected to continue for some time given the volume of sales it is still possible to transfer the physical to the web. Let us beware, however, the economic situation. If the buying power that should not increase or decrease advocates for finding the best prices for customers. We could also see a reduction in consumption resulting in a slowdown in sales in a deflationary climate. We would witness a scissor effect which could cause the disappearance of weaker players.

Force 4: The intra-industry competition

In e-commerce, no salvation other than through prices between industry leaders, competition is very strong and should remain at the price, which has the effect of working with very small margins.

Force 5: The threat of new entrants

While eBay is trying to change its business model because the growth prospects in the auction are reduced, and the firm is likely to remain the undisputed market leader.

To model the auction barriers to entry are, in my opinion, much greater than for conventional e-commerce. The notoriety that naturally when a user wishes to sell a second hand, it will move towards eBay. Similarly, by offering more, buyers looking for bargains or rare piece will primarily be directed towards the site of the firm in San Jose.

Evaluating Organization's Strategy

The main activity of Amazon concentrated around the sale of books; it has to compete with the bookstores, supermarkets, ...