SOLUTION: Colorado University Wk 2 Ut 3 Opportunities for Improvement Amazon Discussion

Amazon Analysis
Michael Ramsay
Colorado Technical University
Amazon Analysis
Amazon Inc. continues to be a leader in the online retail industry. One of the reasons
Amazon has continually dominated the market is by ensuring it navigates and deals with
business challenges such as those outlined in the Porter five analysis. The analysis model was
developed as a business tool for analyzing external business forces, they affect businesses. In this
Amazon analysis, the external forces elate to those conditions experienced in the e-commerce
industry but focusing more on the online retail market. Since the company engages in a wide
variety of services and industries such as cloud computing, consumer electronics, and digital
content distribution, the company could face a myriad of factors. To maintain a leading position
in the industry for a long time, the company regularly regulates these external factors to ensure
dominance (Althafairi et al., 2019). This paper seeks to analyze Amazon’s five forces analysis
and how it still leads the online retail industry.
Competitive Rivalry
Over the past decade, the online retail industry rivalry has increased exponentially,
mainly due to the increase in the number of players recently. Another reason for the strong
intensity of competition is that traditional brands also enter the online sale business. Since most
traditional stores had already established trust in the people, engaging in online retailing poses a
significant threat to online-based companies such as Amazon (Wang & Ng, 2018). Some of the
main competitors of Amazon include eBay, Alibaba, Walmart, and Newegg, among others.
Retail companies tend to be aggressive, and in most cases, they strongly compete against
each other. Amazon faces stiff competition from Walmart, especially with a large and growing ecommerce website. The main reason why the retail industry is generally highly competitive is
due to the strong presence of substitutes. For instance, when it comes to books, both Amazon and
Walmart sell books. Some customers may prefer physically visiting Walmart to check out the
book, while others are comfortable getting a softcopy of the book. Due to the high number of
competitors in the industry, Amazon has to ensure it offers the best services to beat the
competition and win more customers (Zhu & Liu, 2018).
Amazon’s vision statement highlights that the company focuses on being customercentric in all their e-commerce business transactions. According to Porter’s Five Forces, a
Customer’s bargaining power seeks to determine the consumer’s influence on companies and the
industry. Amazon strives to ensure customer satisfaction and deliver quality products. Also,
Amazon serves customers from all the markets despite their economic backgrounds. This
strategy ensures that customers of different social classes can easily get the product they need.
Due to this fact, Amazon has products ranging from $1 to thousands of dollars. This ensures that
customers from all walks of life can get a product that suits their budget. This is essential in
ensuring a steady market growth rate in the future.
Additionally, by ensuring customer satisfaction, and that the products are delivered on
time, and that any returns are handled properly, Amazon seeks to ensure they have repeat
customers. Customer bargaining power is strong since customers nowadays have access to
information regarding online retailers’ services and their products. Additionally, customers have
the power to find alternatives in the event a particular online retailer like Amazon hikes their
prices. Amazon strives to ensure it reaches the global market by embracing global shipping,
where customers from other continents can order and receive their products. Also, the company
offers various incentives, discounts, and services to promote brand loyalty (Smith & Linden,
Amazon is an online franchise; Amazon does depend on suppliers for the availability of
supplies and materials for its e-commerce business. However, being an already established and
leader in the industry, one can say that Amazon has the upper hand over the suppliers in the
supply chain. While Amazon has multiple suppliers to sustain its customer’s global demand for
products, these suppliers have to follow some of the rules and guidelines laid down by Amazon.
The switching cost of suppliers for Amazon is almost negligible, considering many suppliers are
in the market. According to Greenspan (2017), due to Amazon’s large sales for specific items,
other suppliers are willing and ready to supply to Amazon if approached. For this reason,
suppliers cannot attempt to go against Amazon. However, when a group of large suppliers joins
hands to bring change, such as increasing price, they can directly impact the company.
Being a company with a strong international presence, Amazon has to ensure that they
understand the taste and preference of various target markets to succeed. For this reason,
Amazon has collaborated with various collaborators, which allowed the company to develop new
product lines, which can quickly grab the market’s attention. Ensuring a good relationship with
collaborators is essential for any successful business. Amazon Inc. strives to ensure this
relationship is maintained to ensure future business.
Internal and External Analysis
For internal analysis, Amazon has adopted an elaborate CRM system to ensure
uninterrupted information flow between customers and the company. By adopting such
information communication technology, Amazon can maintain quick and effective
communication between the company and customers by quickly responding to clients’ queries.
The company’s strong financial position also adds to the strategic capability of the company.
This allows Amazon to exploit opportunities in the industry, thus resulting in innovative
products. Also, the company has an excellent and superb delivery network which is another
internal strength. By partnering with other logistics companies, the company ensures quick and
quality delivery services.
Looking at the external environment, Amazon is facing some opportunities and threats
like any other company. Looking at the political environment, the company has established itself
in most developed countries which are more stable. However, for developing countries such as
India, the country may face political instability issues. Additionally, economic factors in
developing countries may not be favorable for those countries. In terms of technology, the
company has done an excellent job of developing its cloud-based systems. According to Jain &
Sharma (2017), Amazon has acquired several tech companies to ensure it gets to enjoy leading
technological innovations.
Althafairi, B., Alhoumaida, N., Saxena, M., & Almsri, Z. (2019). Case studyAMAZON. Journal of the Community Development in Asia, 2(2).
Jain, D., & Sharma, Y. (2017). Adoption of next-generation robotics: A case study on
Amazon. Perspect. Case Res. J, 3, 9-23.
Smith, B., & Linden, G. (2017). Two decades of recommender systems at Amazon. com. Ieee
internet computing, 21(3), 12-18.
Wang, X., & Ng, C. T. (2018). New retail versus traditional retail in e-commerce: channel
establishment, price competition, and consumer recognition. Annals of Operations
Research, 1-17
Zhu, F., & Liu, Q. (2018). Competing with complementors: An empirical look at Strategic Management Journal, 39(10), 2618-2642.
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Student’s Name
Colorado Technical University
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Encyclopedia, S. E. (1993). Article. In The new encyclopedia Britannica (vol. 38, pp. 745-758).
Chicago, IL: Publisher.
Lastname, F. (2003). Book title: Subtitle. Sterling, VA: Publisher Name.
Newspaper article without an author. (1993, July 15). The Washington Post, p. A12.
Wittkopf, B., & Shaw, M. E. (2003, fall). Article title from the journal. Journal Name, 43(2), 1822. doi:10:109.0932.9385.09
Michael Ramsay
Colorado Technical University
When Was It Created?
Amazon company was created in the year 1994 by Jeff Bezos, the organization’s current
chief executive officer. Jeff Bezos’ main drive to form the company was to participate in the
booming internet business at that moment in time. After leaving his employment, Bezos moved to
Seattle in Washington, where he worked on an effective business plan that would become the
Amazon company. On July 5, 1994, Jeff Bezos incorporated his organization and gave it the name
Cadabra. However, the name was changed a few months due to his lawyer mishearing the word ”
cadaver (Alves et al., 2019). During the organization’s early days, Amazon company operated in
Jeff’s house in his garage on the home Northeast of Bellevue in Washington.
In September 1994, Bezos decided to name his online store Relentless, but his friends
argued that the term sounded a bit sinister. During the creation of the company, Jeff Bezos selected
his organization’s name with the help of a dictionary, settling on the word Amazon for he viewed
it as a place that was exotic and very different from others. With the Amazon being the most
significant river globally, Jeff Bezos wanted his firm to be one of the biggest in the entire world.
The word chosen would also begin with the letter A which signified the beginning of the
alphabetical order.
Industry of Operation
Amazon company mainly operates as the provider of online retail shopping products and
services. Amazon company is an international organization having its stores almost in every
country. The organization operates through three business segments, including North America,
Amazon Web Services, and the International Amazon. These three segments play an essential role
in the retail sales of various products in different areas across the world. For example, Amazon in
North America deals with sales and retail of several online products in the northern part of
America. The international segment provides effective retail products through international
websites with Amazon Web Services in charge of storage and database services.
Formerly Cadabra, Amazon company is based in Seattle in Bellevue, Washington in the
United States of America. The organization has its headquarters in the exact location with various
subsidiaries all over the United States of America and the whole world. From its offices in Seattle,
several processes, decisions and instructions are passed to the thousands of stores globally
(Denning, 2019). Globally as per December, the organization has a record of one million two
hundred and ninety-eight thousand employees in the whole world and eight hundred and ten
thousand in the United States of America.
Amazon’s organizational structure is more hierarchical as there are different levels of
management. There is a senior management team that includes several three chief executive
officers and three senior vice presidents. These people are responsible for several organizational
aspects and report directly to Jeff Bezos. The company’s organizational structure has key features
like the hierarchical corporate structure that has developed as a result of increased business
operations. The company’s organizational structure is more flexible in terms of operations. Despite
its large size compared to other companies, it has remained to be flexible and has an effective
operating system. The organization’s visionary leadership has helped promote Amazon to a global
giant in terms of online logistics.
Amazon’s organizational structure integrates many small teams that ensure several aspects of the
company are met. The stability of the top management has also played a huge role in determining
the proper organizational structure. This stability has helped provide effective development and
revenue growth in the organization. The company’s ability to provide excellent and quality service
through its effective organizational structure has also helped it gain revenue.
The leadership at Amazon is hierarchical, with several stages of management passed to
reach the top level. The organization has an executive body that reports directly to its chief
executive officer, Jeff Bezos. This team of top-level leaders consists of senior vice presidents and
three chief officers. These individuals are responsible for organizational growth and the smooth
running of the company. The company’s top-level management is based in its headquarters in
Seattle (Vallejo et al., 2019). However, due to the organization’s large nature, a systematic channel
is formed to help promote enhanced leadership. Different branches also have top management
leaders responsible for every activity and action carried out in their jurisdiction.
Why ABC?
There are many reasons as to why an individual would prefer Amazon to other
organizations or companies. Since its formation, the organization has achieved success through
the provision of quality and timely services. Therefore, for anybody requiring the services they
offer, compared to other companies offering the same, Amazon leads the race as one of the best
(Robischon, 2017). Furthermore, Amazon is unique compared to other organizations as it provides
unique product identification. Their products’ uniqueness provides different clients across the
globe with a better shopping experience and enhanced delivery of good quality products and
Amazon’s unique culture of creativity and innovation makes it a leader in producing
different services to clients globally. With its timely services like overnight deliveries, incredible
customer service, and good reputation, Amazon has effectively offered the required services in the
market, making the organization a global giant. The company’s talented management has provided
practical guidance in various critical situations regarding proper advice and timely deliveries
(Benet et al., 2018). These managers have offered valuable support to the organization that has
helped it develop. Ethical leadership in Amazon has enabled it to provide the best possible services.
Furthermore, one would choose Amazon over other organizations or companies due to its
enhanced culture of innovation. Thanks to technology, the Amazon leaders have provided an
enhanced approach towards taking their company a step ahead of others in the market. They have
offered correct leadership and support to various organizational practices that have helped develop
revenue growth.
Alves, H. P., Pimenta, N. L., Hanada, R. E., Lima, A. A., Mustafa, E. V., & Santos, E. M. R.
(2019). Networks of collaboration and management in phytocosmetrics companies in the
Amazon. Intl. J. Adv. Eng. Res. Sci., 6, 454.
Bennett, A., Ravikumar, A., & Paltán, H. (2018). The Political Ecology of Oil Palm CompanyCommunity partnerships in the Peruvian Amazon: Deforestation consequences of the
privatization of rural development. World Development, 109, 29-41.
Denning, S. (2019). How Amazon uses metrics to drive success. Strategy & Leadership.
Robischon, N. O. A. H. (2017). Why Amazon is the world’s most innovative company of
2017. Fast Company Magazine, 2.
Vallejo, I., Cielo, C., & García, F. (2019). Ethnicity, gender, and oil: Comparative dynamics in
the Ecuadorian Amazon. Latin American Perspectives, 46(2), 182-198.

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