SWOT of Amazon

[Name of the institute]External Environment: Opportunities and Threats (SWOT)

One thing that is constant in this world is change. Every facet of this world and of our lives is suspected to change. As the world is moving at a fast pace and different technological, economical and social changes are taking place so, in order to be successful it is imperative to do the evaluation of external and internal environment from time to time.

Same scenario is with the business. Businesses are also vulnerable to change. As compared to an individual, businesses should respond to these changes immediately. Any organization that delays and procrastinate its response to any minor or major change is likely to suffer from serious dilemmas which can lead the organization on a way where they can ruin their will and performance. These changes can be of different nature and sorts. For an organization these changes can be internal and external. An organization can only be successful and maintain its success for a long period of time if they track these changes properly and respond to these changes immediately (Rich, 2012).

External factors are those factors that are not directly associated with the organization but they cause strong impact on organization. External factors are those factors that are present outside environment of the organization. External environment refers to the situations, events, happenings, entities and factors in the outside environment that affect the choices and decisions of the organization. These external factors can also be further divided into two types' macro external factors and micro external factors. Macro external factors are those factors that are not directly linked to the organization but it affects organization's policies and decisions. Whereas, micro external factors are those factors that are outside the organization but an organization has direct links with these factors. Macro external factors include; political factors, economical factors, social factors, legal, ethical and technological factors. On the other hand, micro external components includes; customers competitors, suppliers and public (Savill, 2012).

As far as the external environment of Amazon is concerned, the suppliers of Amazon have considerably low power. This is so because there are many suppliers out there that want to do business with Amazon. In the view of the customers, Amazon is a strategic key account. With regard to the buyer power it can be stated that the customers have a big bargain power in that there are many online retailers that offer the same product, though not always at the same prices. In addition, the widespread penetration of internet has made it possible for people to gain a lot of information and make choices after detailed market analysis. On the other hand, once a customer has made a purchase at Amazon, he is bound to come back in that the service quality is very good and the prices are almost always the lowest (Homburg & Sabine, 2009).

Since Amazon is a pioneer in e-tailing, the company has always had the first mover advantage. This means that there is a certain level ...