Analysis of Amazon.com Inc.

Introduction

Amazon.com, Inc., is an e-commerce company based in America and was founded by Jeff Bezos. Apart from retailing consumer products worldwide, this company is also involved in the manufacturing of consumer electronics. This company has separate retail websites for several other countries. Currently, Amazon has a wide customer base around the world due to the fact that purchases are done via the internet in all parts of the world. Also, the fact that the company has developed separate retail websites for several other countries has enhanced its relevance thus widening its customer base even further. The target customers for this company include all potential buyers with access to the internet and with online payment options. These customers mostly are the literate people with computer skills which enable them to transact online. The buying behavior of these customers is a frequent one, fueled by the convenience of shopping at the comfort of one’s seat. The loyalty and customer satisfaction is determined by the relatively low and stable prices of commodities offered by the company (Lincoln 57). This paper focuses on a situation analysis of Amazon.com, Inc.

Product Range and Global Reach

Amazon.com, Inc. offers a wide range of consumer products for customers thus making it a single stop shop for many consumers around the world. The product array range from electronics, household products, furniture, as well as fresh produce for customers near the company’s stores. This company has taken advantage of the internet to reach as many consumers as possible throughout the world. This aspect is particularly evident from the fact that the company has spread into other countries by developing retail websites specific to those countries. However, consumers from other countries without their specific retail websites who buy products from the company make it incur transportation costs in delivering the products. This drawback can be surmounted by the company developing retail websites for as many countries in the world as possible and establishing their stores virtually in every corner of the world (Lincoln 57).

Strengths and Weaknesses

Nevertheless, this company has got its strengths and weaknesses as well. One of the strengths of this company is that it is recognized worldwide, an aspect which has been instrumental in its entry to new markets previously perceived not to be friendly to e-commerce. Also, due to its sophisticated logistics and distribution systems, the Amazon has achieved better customer fulfillment, putting the company at a higher competitive level in relation to its rivals. The major weakness of this company is the free shipping services it offers to its customers which cumulatively lower the company’s profit margins. Amazon can overcome this weakness by establishing its stores virtually everywhere in the world to enable customers to obtain their products from the nearest store hence increasing on profit margins by cutting down the transportation cost (Lincoln 57).

Business Environment

The business environment surrounding Amazon is key in determining its business performance. The business environment is determined by such factors as political, legal, societal, as well as economic technological factors capable of influencing the company sales. Political factors play a critical role in determining the customer base of this company worldwide. For example, some countries limit access to the number of websites its citizens can access and if it happens that Amazon retail website is one of them, then it means that the company is deprived of potential customers from that particular country. Legal factors such as laws for doing business are different in different countries thus limiting Amazon operations in such countries. Other factors such as societal and economic technological factors tend to limit Amazons business operations (Lincoln 57).

Collaborations and Competitors

Amazon has established collaborations with other companies in a bid to boost its business and build on its reputation. For example, a collaboration between Amazon and Nokia has currently been announced. Nokia is a consumer electronics company based in Finland. The collaboration between the two companies is for helping the migration of SD-WAN services to the cloud by the service providers. This kind of partnership mutually widens the customer base of the two companies thus widening their profit margins. Amazon can also collaborate with other companies whose products have been globally accepted such as Samsung and Apple Inc. to boost its sales. However, in the e-commerce industry, there have emerged some worthy competitors to Amazon such as Alibaba which virtually controls the Asian retail market (Lincoln 57).

Management and Recommendations

The management of the Amazon company is not without flaws and several recommendations are necessary regarding the future direction of this company especially in the wake of some worthy competitors. Amazon company should focus on widening its collaborations with other world giants in various industries lest other competitors do so and render it obsolete in its effectiveness. Amazon should liaise with different countries of the world to set business policies and laws that enable it to thrive in meeting the demands of its potential customers from those particular countries. This liaising can be made possible by the company promising to employ the respective countries citizens. It is also recommendable for Amazon to diversify from e-commerce and establish physical retail outlets all over the world, an aspect which would create more employment opportunities and in turn broaden the company’s profit margins.

Work Cited

Lincoln, Charles Edward Andrew. “Amazon Inc., BEPS, And The New Method of Risk Allocation: Comparing U.S. Jurisprudence and OECD Approaches to Risk Allocation in The Post-BEPS Era of Transfer Pricing”. SSRN Electronic Journal, vol 2, 2017, pp. 57-68. Elsevier BV, doi:10.2139/ssrn.3014346.