Running head: STRATEGIC MANAGEMENT 1

Written Assignment Week 1

Strategic Management: Amazon.com SWOT Analysis

BUS 5116 Operations Management

Term 5, 2018-2019

University of the People

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Strategic Management: Amazon.com SWOT Analysis

Company Background

Amazon.com, an online retail company started by Jeffery P. Bezos on July 5, 1994, is

ranked 28th on Forbes’ 2019 Global 2000 list of the world’s biggest public companies (Forbes,

2019). On May 15, 1997, Amazon went public at $18 per share which shoot up to $2,039.51 in

2018 (DePillis & Sherman, 2019). From being an online bookstore based in a garage in Seattle,

Washington, Amazon expanded to become the world’s leading retail company with Marketplace

in 14 countries (Jurevicius, 2019). Amazon launched Prime in 2005, a membership program that

offers unlimited movie streaming, music library, TV Shows, and e-book in addition to shipping

benefits (Amazon, 2019). Furthermore, in 2006, Amazon launched the Amazon Web Services

(AWS), a low-cost IT infrastructure service known as cloud hosting platform (AWS, 2019).

SWOT Analysis

A SWOT analysis is a planning tool that uses internal and external data to identify the

strengths, weaknesses, opportunities, and threats of the company in order to develop a business

strategy and determine the possible impact of a decision to the business (Grant, 2019).

Main Changes in Amazon from 2013 to Present

In 2013, Amazon launched Smile, an alternative shopping platform in which Amazon

donates a portion of the purchase price to the customer’s charity of choice (Annual Reports,

n.d.). Further, in 2014, the Amazon Web Services acquired Twitch Interactive to pull the global

gaming community into its cloud platform (DePillis & Sherman, 2019).

Further advancing in the technology business, Amazon ventured into manufacturing

which started with the launch of its very first smartphone the Fire in 2014 (DePillis & Sherman,

2019). However, the phone manufacturing business was short-lived and the company ceased
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production in 2015 (DePillis & Sherman, 2019). In the same year, Amazon launched a voice-

activated speaker Amazon Echo along with its built-in virtual personal assistant Alexa (Pino &

Chacksfield, 2019) and the Fire TV Stick, a flash-drive streaming device with voice-activated

remote control. Both the Amazon Echo and Fire TV Stick has since advanced to cope up with the

ever-continuing technological innovations.

In 2015, Amazon began its brick-and-mortar retail business with its first physical

bookstore, Amazon Books (Schaverien, 2018). It was followed by Amazon’s acquisition of

Whole Foods in 2017 that makes the latter’s private label products available in Amazon

Marketplace (Thomas, 2017). Similarly, in 2017, the AmazonFresh Pickup was launched

allowing customers to order groceries online and pick them up at an AmazonFresh Pickup

location (Bishop, 2017). Furthermore, in 2018, Amazon officially launched Amazon Go, a self-

service cashier-less grocery store chain, as well as Amazon 4-Star which retails products

trending, top sellers, and rated 4 stars and above on Amazon.com (Day One Staff, 2018).

How have the strengths of the company evolved in this period?

Being a technology-based company, one of Amazon’s strengths is innovation which

continued to advance during this period (Business Strategy Hub, 2019). Amazon did not stop

from being a marketplace and expanded its business by introducing breakthrough products such

as the Amazon Kindle reading devices, Amazon Echo, Fire TV Stick, Fire Tablet, and Amazon

home security systems. Amazon integrated these devices with advanced software and

applications such as the virtual personal assistant Alexa in addition to its flagship membership

programs Prime and Kindle Unlimited. Amazon built a competitive name in the online retail

business and established a strong customer-oriented service which led to their increased

merchandise selection and third-party affiliations.

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What do you consider to be the weaknesses of the company during this period?

Between 2013 to present, Amazon’s success has not been without challenges. One of

Amazon’s weaknesses is its easily imitable business model (Business Strategy Hub, 2019).

During this period, e-commerce and online marketplaces such as eBay, Alibaba, and Craiglist

have become increasingly popular. These companies share the same business model as Amazon

and with the use of website builders and e-commerce platforms such as Shopify, BigCommerce,

WooCommerce, Volusion, and Wix, creating an independent e-commerce business has become

very easy (Johnson, 2019).

How have the opportunities of the company evolved in this period?

During the given period, Amazon’s opportunities evolved to become another one of its

strengths. Amazon expanded its operations by venturing into the brick and mortar operations

such as AmazonFresh, Amazon Go, and Amazon 4-star (Amazon, 2019) and acquisition of

businesses such as Whole Foods, Zappos, Kiva Systems, and Souq.com (Desjardins, 2017).

What do you consider to be the threats to the company during this period?

One of the biggest threats of a technology-based company like Amazon is cyber-attacks

and hacking. Between May and October 2018, hackers altered Amazon sellers’ accounts and

moved funds into their accounts (Browning, 2019). Similarly, in November 2018, a data breach

where customers’ names and emails were posted on the website occurred days prior to one of the

most anticipated shopping day events in the US (Brignall, 2018).

The SWOT analysis of Amazon shows that the company’s strengths and opportunities

have been successfully used to expand its business operations. However, Amazon must address

its weaknesses and threats to avoid damages and losses. Amazon can use its strengths to repel

these internal and external risks and further strengthen its position in the global market.
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References

Amazon. (2019). About Amazon Prime. Amazon. Retrieved from

https://www.amazon.com/gp/help/customer/display.html?nodeId=201910360

Amazon. (2019). Amazon physical stores locations. Retrieved from

https://www.amazon.com/find-your-store/b/?node=17608448011

Annual Reports. (n.d.). 2013 Amazon.com annual report. Retrieved from

http://www.annualreports.com/HostedData/AnnualReportArchive/a/NASDAQ_AMZN_2

013.pdf

AWS. (2019). About AWS. Amazon Web Services. Retrieved from

https://aws.amazon.com/about-aws/

Bishop, T. (2017, May 25). We tried the new AmazonFresh Pickup service in Seattle, and this is

what happened. GeekWire. Retrieved from https://www.geekwire.com/2017/tried-new-

amazonfresh-pickup-service-seattle-happened/

Brignall, M. (2018, November 21). Amazon hit with major data breach days before Black

Friday. The Guardian. Retrieved from

https://www.theguardian.com/technology/2018/nov/21/amazon-hit-with-major-data-

breach-days-before-black-friday

Browning, J. (2019, May 8). Amazon hit by extensive fraud with hackers siphoning merchant

funds. Bloomberg. Retrieved from https://www.bloomberg.com/news/articles/2019-05-

08/amazon-hit-by-extensive-fraud-as-hackers-siphoned-merchant-funds

Business Strategy Hub. (2019). Amazon SWOT 2019 | SWOT analysis of Amazon. Retrieved

from https://bstrategyhub.com/swot-analysis-of-amazon-amazon-swot/
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Day One Staff. (2018, September 26). Introducing Amazon 4-star. The Amazon Blog Day One.

Retrieved from https://blog.aboutamazon.com/shopping/amazon-4-star

Debter, L. (2019, May 15). Amazon surpasses Walmart as the world’s largest retailer.

Forbes.com Retrieved from

https://www.forbes.com/sites/laurendebter/2019/05/15/worlds-largest-retailers-2019-

amazon-walmart-alibaba/#667de96a4171

DePillis, L. & Sherman, I. (2019, February 14). Amazon’s extraordinary evolution: A timeline.

CNN. Retrieved from https://edition.cnn.com/interactive/2018/10/business/amazon-

history-timeline/index.html

Desjardins, J. (2017, September 12). Infographic: Amazon's biggest acquisitions. Business

Insider. Retrieved from https://www.businessinsider.com/amazon-stock-price-biggest-

acquisitions-infographic-2017-9

Forbes. (2019). The world’s largest public companies. Forbes.com. Retrieved from

https://www.forbes.com/global2000/list/#tab:overall

Grant, M. (2019, April 27). Strength, weakness, opportunity, and threat (SWOT) analysis.

Investopedia. Retrieved from https://www.investopedia.com/terms/s/swot.asp

Johnson, T. (2019, February 21). The top 10 absolute best ecommerce platforms in 2019. Tinuiti.

Retrieved from https://www.cpcstrategy.com/blog/2019/02/ecommerce-platforms/

Jurevicius, O. (2019, January 10). SWOT analysis of Amazon (5 key strengths in 2019).

Retrieved from https://www.strategicmanagementinsight.com/swot-analyses/amazon-

swot-analysis.html

Pino, N. & Chacksfield, M. (2019, February 22). Amazon Echo (2014) review. Techradar.

Retrieved from https://www.techradar.com/reviews/amazon-echo-2014

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Schaverien, A. (2018, December 29). Five reasons why Amazon is moving into bricks-and-

mortar retail. Forbes. Retrieved from

https://www.forbes.com/sites/annaschaverien/2018/12/29/amazon-online-offline-store-

retail/#60e21f9e5128

Thomas, L. (2017, August 24). Amazon says Whole Foods deal will close Monday, with

discounts to begin then. CNBC. Retrieved from

https://www.cnbc.com/2017/08/24/amazon-says-whole-foods-deal-will-close-monday-

prime-customers-to-immediately-get-discounts.html