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... rce companies. These lost enough value to harm Amazon's operations. - Hardware problems: Amazon's decentralized servers often suffer from hardware failures. When this occurs, the entire system is affected and their services can stall and they can lose data Strengths Weaknesses Opportunities - Increase customer service department- Improve website performance for handheld Internet devices- Expand relationships with international businesses- Emphasize security in marketing - Redirect investments in failing companies to safer companies- Outsource more technology services to improve systems and reduce costs- Allow partners more autonomy to reduce overhead Threats - Use new technology to coordinate mutually beneficial solutions with suppliers- Establish secure systems to prevent outside interruptions- Use recognition and speed to increase international reputation and sales- Establish a larger share of online business through marketing to discourage competition - Increase orders from suppliers- Stop investing in e-commerce companies- Increase system security 3. 2) The micro environment - Porter's 5 forces a) Threat of entry - Brand loyalty is very important for the sales of Amazon. com - Absolute cost advantages. Amazon.
com has lost it's advantage due to new company that has entered the market has realized that Amazon had the more popular system and then tried to copy it. - Government policy as barrier to establish online retail website Amazon. com perspective - moderate threat of entry b) Power of suppliers - Amazon. com was the industry's number one overall seller, online and retail combined in 1999. As a result, with larger orders get better deals. - Suppliers are a threat when "they are able to force up the price that a company must pay for its inputs or reduce the quality of inputs they supply, therefore depressing the company's profitability. Amazon.
com perspective - low to medium power of supplier c) Power of buyers - The buyers of online retails are becoming more empowered because of the use of the Internet. There have been several websites that have entered the online retails business by offering low price and good customer services Amazon. com perspective - strong power of buyers d) Threat of substitute products - Low price strategy is critical to compete with real-world book superstores - If Amazon's products have few close substitutes, then company has a better opportunity of gaining more profits due to the ability of raising prices. - Amazon does not have to worry about customers switching to other products. Companies that are not threatened by substitutes should indeed take advantage of such a situation.
Amazon. com perspective - low threat of substitutes e) Competitive rivalry - Cdnow, a leader in music and MP 3. com an Internet retailer of music that are serious competition from other online web stores who have a dedicated following and are focused on a specific market. - There are untapped product markets that have potential for profitability Amazon. com perspective - intense and increasing rivalry 3. 3) Competitive analysis As with any corporation, Amazon.
com has major competition including such well known business as below: a) Barnes & Noble Inc. Barnes & Noble. com is an internet commerce branch of Barnes & Noble Inc. which includes physical bookstores that have been designed with comfort and convenience. It receives more than six million unique visitors per month to its Web site, web It is perhaps their largest competitor. b) Wal-Mart.
com Wal-Mart has experienced success internationally because of its ability to transport the company's unique culture and effective retailing concepts to each new country. They respond to customer needs, merchandise preferences and local suppliers. c) Cd Now. com Cd Now. com is an online music store and is similar in that stock shares are available to the public as well, making it a like corporation. They have a much smaller business range though.
d) Ebay. com Ebay. com is also on the Internet and it is much larger than Amazon. com and offers live auctions and bidding for customers. 3. 4) Macro environment a) Political factors - Restriction of information transfer. People more concerned about privacy of personal data. b) Economic factors - Penetration of IT in the household sector and business sector - Customer become more prices conscious.
They can search more information through the Internet C) Sociological factors - There is increased use of the Internet. People more depend on Internet daily whether searching information or looking for entertainment. D) Technological factors - Many large organizations have invested heavily in hardware, software and telecommunications in order to trade on-line. - Except the traditional advertising channel. Internet can provide new channel for advertising. 4) Customer behavioural patterns Research shows that some customers are complaints about shopping in real-world stores such as crowds and the limited open hours. As these reason many of customers enjoy purchase online because there are improvements in the shopping experience.
Online shopping can 24 hours 7 days with better selection and low price are a few of the advantages of shopping online. Amazon. com use low price strategy with wide selection of items and excellent offline customer services to achieve high brand loyalty from customers. 5) Market Segmentation, Positioning and Targeting Segmentation With its multiple brands, Amazon segments its market; each brand represents a unique image and caters to a distinct demographic. Friendly, low price are aimed at the middle to high level income market. Therefore, Amazon. com markets its products to people that are willing to shop online, and they want to buy products at an affordable price.
These would be people that are technologically literate, but without huge levels of income. Amazon. com uses mass marketing as its segmentation strategy. It uses demographics and behaviour as its market segmentation. In which it tries to attract consumers of various ages, different ethnic backgrounds, medium income level, and both genders, with high school or higher level of education.
These consumers have interests in purchase online; some of them show high level of brand loyalty to Amazon. com Target Market Demographic Profile User: Owners of personal Computers & shop at home consumers. Age: 25 - 45 (young adults to early-middle age) Generation: Generation X - Young Boomer Gender: Both gender Family Size: 1 - 4 Since the target market is young, they will tend to be single or with new families. Family Life Cycle: Single to married with young children Income: Medium to high income that can be spent on purchase online Social Class: Middle - Upper Middle Education: Completed college to university Occupation: White-collar to professional Positioning Amazon. com has even position in leading Internet retailers that are improving the lives of customers by making shopping easier and more convenient. Amazon.
com acts as the only store selling everything you want. This distinguishes Amazon. com from Internet portals, a starting point where the consumer bounces in and out of different stores all with their own look and feel, security measures, and pr...
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