Monday, March 4, 2019
Recently, Amazon. com has enjoyed amazing gross revenue and grocery cover growth. However, Amazon. com is still running under an in operation(p) loss. This report give consider the historical strengths and weaknesses of Amazon. com, as healthful as the current opportunities and threats. The current strategical plan includes expanding into either online auction offs or B2B exchanges. It is believed that Amazon. coms many partnerships, as well as its technical expertise with online web plat body-builds, would make it an instant attractor in online auctions and B2B exchanges. After examining these metrics, I have come to the conclusion that Amazon.com should accent on 1. Increasing its multinational food market distribute, possibly into the Middle eastmost and China. 2. Increasing market sh atomic number 18 in current markets in northwestern America and Europe. 3. Delay entrance into online auctions and B2B exchanges until Amazon. com shows a consistent cyberspace and th ose cabbage can sustain the with child(p) expense of setting up a bare-ass business model. Evaluation of watercourse Objectives and Current Strategy Amazon. com has always had an objective to sacrifice short-term profits for building long-term growth, market share, and affixd shareholder value.Now, Amazon. com is jobed with developing an effective differentiating enterprise-wide strategy, all(prenominal) the plot maintaining the desire for working out. This includes the possibility of moving into online auctions, competing with eBay, and B2B exchanges, optimizing the partnerships Amazon. com already has. Current Strengths and Weaknesses Strengths Amazon. com has shown record sales and has reduced its operating loss dramatically and consistently increased market share and expanded product passs. Amazon.com has a reputation for being iodine of the first businesses online and embracing the idea of taking orders through a website first-mover advantage. Amazon. com has no physical stores. This creates low overhead which means a bigger profit margin on increased sales. Amazon. com collects payments immediately and floats vendor payments 30-40 days, which generates a enlarged work capital. Amazon. com has contracts and alliances with many suppliers. Amazon. com has a large and loyal customer base. Amazon. com has an online obtain platform that is the envy of the retail shopping world. Amazon.com has partnerships with opposite retail companies to cross-sell products. Weaknesses enthronement in separate online companies resulted in a loss of close to $ one hundred thirty-five million. With the current economy, equivalent losses could be felt again. Amazon. com is still maintaining an operating loss. Shareholder pressure to show a profit is great. analysis of Current Environmental Threats and Opportunities Threats Increased competition. Overall poor economic environment. Possible suppress of the sales tax exemption. Opportunities Lev erage the large customer base in expansion into new market segments. Use experience of expansion into international markets to further expansion into the Middle East and China, with large computer-savvy populations. Use well- cognize and easy-to-use platform to expand base of suppliers that use Amazon. coms website offerings for their own online presence. S reconcileholder Analysis Government agencies are interested in Amazon. com because of its wide overstep. Being an international disposal and crossing state lines within the United States, Amazon. coms increase in sales could yield high profits to the countries and states in the form of taxes and permits.International government would also be concerned with an American presence and the ingrain that has on the people. Labor unions do not have much of a stake in what happens to Amazon. com because it has very few employees and all of the positions are traditionally not union jobs. Competing organizations are definitely inte rested in Amazon. coms performance. Amazon. com has developed so many partnerships that it is difficult to increase market share and almost impossible to enter the market. If they were to expand into online auctions or B2B exchanges, Amazon.coms reach whitethorn drastically cut into the market share of its competitors. Employees would be unnatural by Amazon. coms performance because of stock options and the viability of the company. Suppliers would be concerned with Amazon. com offering competitive products at a lower price, similar to Amazon. coms concern when they set up zStores. They would also be concerned with Amazon. com offering products that are competitive on the same site. Customers would benefit from an increase in availableness of the products they desire on a platform that is well-known, safe, easy, and custom-tailored to meet their needs. Civic groups may be more interested in the Amazon. com as more products will be more available to the population. Public intere st groups may take a greater interest in Amazon. com in a similar manner to the civic groups. They would also be interested in the working conditions of Amazon. coms partners. Stockholders will most definitely be affected by any change in Amazon. com. Being so close to screening a profit rather than an operating loss, shareholders are interested in increasing sales, decreasing cost, and increasing market share. Identifying Current Problems The first alternating(a) (online auction) encourages email marketing (spam) and television marketing (which has proven not to be cost effective in the past). Setting up a intermit online auction takes the risk of diluting the image of the overall organization. Amazon. com is known for quality, and auctions are known for deep discount shopping. It also goes against the mission of creating one giant organization all under one brand. Competing with eBay on pricing structures sets up a price war, which minimizes the draw of Amazon. coms quality and customer service. Setting up a B2B exchange could cause a conflict of interest for Amazon.com among existing partners and potential ones, stifling the availability of suppliers available in the exchange. Creating a B2B exchange that is not specialized waters down some of the impact. pair with competition from other exchanges, it could compromise Amazon. coms existing partnerships. Alternative Strategies way on maintaining market share in existing markets. Not expanding into other markets until Amazon. com is showing a healthy profit and is able to finance the expansion with profits. Expand into other countries, developing even more of a presence, maybe in the Middle East and China. RecommendationsMy recommendation would be for Amazon. com to focus its finances and energy on increasing its existing market share. Expansion has worked for Amazon. com all along, but I am concerned that it is becoming too large of a giant, potentially spreading too thin. If Amazon. com focus ed its efforts on expanding into other markets, like the Middle East and China, doing what it does best, and increasing market share in existing markets, it could show a profit for a while. Then, after the auction industry has settled down, Amazon. com could present itself as a fresh new alternative to the tired, worn-out ways of the likes of eBay and Covisint.