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AMAZON CASE STUDY

Case Study of Amazon, The Ecomm Giants

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Introduction

Amazon.com began as a bookshop and has evolved into a one-stop shop for nearly anything. Millions of books, as well as other media, home furnishings, clothes, pet supplies, office items, health and beauty, jewellery, consumer electronics, software, lawn and patio, groceries, automotive products, and hundreds of other types of products, are still available on the company's website. Amazon makes and sells electronic products such as the Kindle, Fire tablet, Fire TV, Echo, Ring, and other devices, as well as developing and producing media content. In addition, it is the leading cloud services supplier, with its video streaming operations, a supermarket power to be reckoned with thanks to its purchase of natural foods chain Whole Foods, and a leader in digital personal assistant devices through to Alexa and its Echo product line. Amazon.com, Inc. was founded in the state of Washington in 1994 and reincorporated in the state of Delaware in 1996.
By far the largest market for Seattle-based Amazon in terms of sales with Germany, the United Kingdom and Japan rounding out the top three foreign markets. Amazon has over 175 fulfilment facilities with over 150 million square feet of space where workers select, pack, and ship millions of Amazon.com price changes each year. Amazon now has more than 110 operational sites in North America, offering a wide range of job possibilities.
 
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SWOT Analysis of Amazon

Strength

Amazon has a solid market position and a good brand image as a worldwide e-commerce behemoth. For everyday necessities, Amazon serves a huge number of customers at low rates. As a result, it has become a customer-focused brand. Amazon is known for bringing new and inventive concepts to its value propositions, such as the ambitious aircraft delivery business and the Withings Aura Smart Sleep System. This distinguishes the company from the competition. By selling everything online, Amazon avoids the overhead of operating actual retail locations. Amazon effectively manages prices and reduces inventory replenishment time because to economies of scale. Because of Amazon's huge traffic volume, a great number of third-party vendors have joined the platform to offer their own products. According to data from Amazon's Fulfillment by Amazon (FBA), there are over 2 billion goods accessible from third-party retailers.

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Weakness

In today's digital age, online retail enterprises have grown fairly prevalent. As a result, competitor companies may easily copy Amazon's business model. A few firms are even competing with Amazon. Barnes & Noble, eBay, Netflix, Hulu, and Oyster are just a few examples. Amazon has suffered losses in a few markets, including India. Free delivery to clients may be one of the factors that exposes some sectors to the danger of losing profits. Its Fire Phone debut in the United States was a flop, and its Kindle Fire tablet hasn't fared any better. Amazon only has a few physical storefronts. This might make it difficult to get people to buy items that aren't available in internet retailers.

 

Opportunity

Amazon may be able to break into or grow its business in underdeveloped markets. Amazon can strengthen its competitiveness versus large box retailers and engage people with the brand by establishing physical shops. To minimise counterfeit sales, Amazon has the chance to enhance technical safeguards and organisational rules. When Amazon offered a phoney My Critter Catcher, it exposed an instance of counterfeit sales. The item was sold for $1 less than it was originally. More e-commerce firm acquisitions can enhance the firm ’s market share and lessen competition. Zoox Inc, a self-driving business located in California, was recently bought by Amazon for a whopping $1 billion. It may now take advantage of the rise in demand for ride-hailing services or utilise autonomous technology to strengthen its delivery network. Amazon has pledged to have a beneficial environmental impact. Amazon aims to deploy 10,000 electric buses for delivery in India by 2025, with this objective in mind.

 

Threat

Few issues have tarnished Amazon's reputation. When it was discovered that Amazon was selling the book in 2010, critics reacted angrily and boycotted the site. Government laws may potentially jeopardise Amazon's commercial operations in several key nations. Cuba, Iran, North Korea, Sudan, and Syria are among the countries that Amazon does not ship. The US State Department is investigating three retail behemoths for maintaining supplier networks and labour sources linked to human rights violations. This puts the ecommerce behemoth at danger from a reputational, economic, and legal standpoint. The rise in cybercrime may have an impact on the company's network security system.
 

PESTLE Analysis Of Amazon

Political

Political stability favours Amazon. This circumstance offers an opportunity for the firm to expand or diversify its operations in developed nations, according to the PESTEL/PESTLE analytical methodology. To complement its e-commerce business, Amazon may grow its cinder block operations in Mexico. The external element of total governmental support for e-commerce, on the other hand, is also an opportunity. Amazon's continued development in key markets is aided by such government backing. The same external element, however, poses a danger to the corporation because of increased rivalry, such as that posed by Chinese online retail enterprises extending their operations.

 

Economic

The economic stability of industrialised countries enhances Amazon.com Inc's chances of success. This condition decreases economic difficulties in the distant or macro-environment, therefore lowering risks to the company's online retail business development, according to the PESTEL/PESTLE research model. Amazon has development potential in undeveloped nations as well. Increasing disposable incomes in developing regions, for example, can help a company's financial success. However, Amazon's company may be jeopardised by China's possible economic downturn. China is one of the largest areas in which the firm aims to expand.
 
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Social

In many nations, the growing wealth inequality refers to the widening gap between the affluent and the poor. This PESTEL/PESTLE study sees such a sociocultural trend as a danger to Amazon.com Inc. in terms of possible stagnation in discretionary income levels and, as a result, stagnation in the industry's distant or quantitative. Higher levels of disposable income are better for boosting an e-commerce company's prospective sales. Furthermore, rising consumerism offers possibilities for the e-commerce and IT services industries to expand. In this regard, the firm stands to gain from the growing popularity of online shopping.

 

Technological

Amazon.com Inc. is threatened by rapid technology obsolescence, putting pressure on the firm to improve its technological assets on a constant basis. However, in the context of this PESTEL/PESTLE study, such a situation can also be viewed as an opportunity for company optimization. For example, the company's on-going substantial investment in information technology can help it maintain its competitive edge and defend it against new competitors in the e-commerce market. Based on the fast rise in IT resource efficiency, Amazon has more possibilities to improve its performance. New computing technology, for example, can boost online shopping productivity. This external element jeopardises the quality of the customer experience as well as Amazon's corporate integrity. As a result, despite technology-related difficulties in the industry's distant or macro-environment, considerable investment in suitable technical measures is important to the company's long-term existence. Amazon must prioritise ongoing technology enhancement based on this component of the PESTEL/PESTLE study. In this regard, the firm stands to gain from the growing popularity of online shopping, as more individuals across the world want to do so. The external factors identified in this element of Amazon's PESTEL/PESTLE study point to the advantages of concentrating on market penetration and expansion in emerging nations.

 

Legal

As a result of societal expectations for consumer safety and security, product regulation is expected to increase. Amazon might extend its global operations to take advantage of vendors' expanding capacity to contact international suppliers. Furthermore, with proper corporate social responsibility policies that handle growing environmental protection requirements, the e-commerce firm has the opportunity to improve its brand image. In the remote or macro-environment, such an endeavour can improve firm competitiveness. Amazon can assure long-term e-commerce success through regulatory compliance based on this component of the PESTEL/PESTLE analytical methodology. 

 

Environmental

In response to the growing interest in environmental programmes, Amazon has possibilities to enhance its environmental effect. Environmental issues, such as waste management and energy use, have sparked such interest. An enhancement in Amazon.com Inc.'s corporate social responsibility approach, based on this external element, might improve the company's environmental effect. Furthermore, the growing popularity of low-carbon lifestyles presents possibilities for the firm to enhance its corporate image as an e-commerce industry leader. For this aim, the firm might establish significant energy-saving strategies in its operations.

Conclusion

As a result of the above case study, Amazon.com Inc. remains the leading participant in the online retail sector. Despite increased competition from firms like as Walmart the company remains resilient. One suggestion is to expand the company's activities into new nations, which have strong e-commerce growth prospects and quick economic development. In addition, the firm must handle IT security concerns by maintaining and improving its present IT security and integrity practises. These concerns have an impact on consumer confidence and the distant or microeconomic stability of the firm. It is suggested that Amazon use a corporate social responsibility plan to strengthen their brand.

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