Amazon Strategic Analysis Essay

5699 Words Aug 14th, 2013 23 Pages
Contents
1. Introduction 2 1.1 The overview of Amazon.com 2 1.2 Amazon’s business model and primary business 2
2. Strategic position of Amazon 3 2.1 PESTLE analysis 4 2.2 Industry and competitive environment analysis — Porter’s Five Forces Model 7 2.3 Internal environment analysis- SWOT 11
3. Suitability of Amazon’s corporate strategy 12 3.1 Growth through lower cost structure and lower prices. 12 3.2 Creating value for customers by using their technology expertise 14 3.3 Diversification and Expansion 16
4. Conclusion 17
5. Reference list 19

Introduction

1.1 The overview of Amazon.com

Amazon.com is an e-commerce company from America. The company was found by Jeff Bezos in 1994 and was
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Amazon has three main distinct businesses: Amazon retail; Amazon marketplace and Amazon web services (Edwards, Lisa, 2013). Amazon retail started from online bookstore and then expanded to many other products like electronics. Amazon marketplace is a third-party selling platform which allows individuals to sell goods and services online. Moreover, this online marketplace also has some other functions like fulfillment and Amazon check out, which is similar with the PayPal. Amazon web service is an integration of leveraged technology developed by Amazon. They are mainly based on its online retail platform and offer customers web services like Amazon Cloudwatch and Amazon CloudFront. In the environment analysis (PESTLE and Porter’s Five Forces) we mainly focus on Amazon retail business.

Strategic position of Amazon

The external environment is referred as the macro-environment. This includes the broad environmental factors which affects organizations at various levels. It is important to consider the potential impact of the external factors on the individual organizations (Johnsonet al, 2006, P65). To have a deeply understanding on Amazon’s strategic position, we firstly analyze its external environment of the company through the PESTEL model.

Jeff Bezos, CEO and founder of Amazon, his expectation to his

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