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    Service marketing management of amazon Service marketing management of amazon Document Transcript

    • SERVICE MARKETING MANAGEMENT Presented by: JEAN F. BAYLON. BSBA4 Mktg 29 Instructor: Mr. A. Quiwa August 2013
    • OUTLINE: I. II. III. IV. V. VI. VII. Overview o Amazon founder Jeff Bezos o Acquisitions o Merchant partnerships o Locations o Fulfillment and warehousing Products and Services o Retail goods o Consumer electronics o Computing services Service Management System SWOT Analysis Recommendations Conclusions References
    • I. Overview Amazon.com, Inc. (NASDAQ: AMZN) is a US-based multinational electronic commerce company. Headquartered in Seattle, Washington, it is America's largest online retailer, with nearly three times the Internet sales revenue of the runner up, Staples, Inc., as of January 2010. Jeff Bezos founded Amazon.com, Inc. in 1994 and launched it online in 1995. The company was originally named Cadabra, Inc., but the name was changed when it was discovered that people sometimes heard the name as "Cadaver." The name Amazon.com was chosen because the Amazon River is the largest river in the world, and so the name suggests large size, and also in part because it starts with 'A' and therefore would show up near the beginning of alphabetical lists. Amazon.com started as an online bookstore, but soon diversified, selling DVDs, CDs, MP3 downloads, computer software, video games, electronics, apparel, furniture, food, and toys. Amazon has established separate websites in Canada, the United Kingdom, Germany, France, Italy, Japan, and China. It also provides international shipping to certain countries for some of its products. A 2009 survey found that Amazon was the UK's favorite music and video retailer, and third overall retailer. Amazon founder Jeff Bezos The company was founded in 1995, spurred by what Bezos called his "regret minimization framework", which described his efforts to fend off any regrets for not participating sooner in the Internet business boom during that time. In 1994, Bezos left his employment as vice-president of D.E. Shaw, a Wall Street firm, and moved to Seattle. He began to work on a business plan for what would eventually become Amazon.com. After reading a report about the future of the Internet which projected annual Web commerce growth at 2,300%, Bezos created a list of 20 products which could be marketed online. He narrowed the list to what he felt were the five most promising products which included: compact discs, computer hardware, computer software, videos, and books. Bezos finally decided that his new business would sell books online, due to the large world-wide demand for literature, the low
    • price points for books, along with the huge number of titles available in print. Amazonwas originally founded in Bezos' garage in Bellevue, Washington. The company began as an online bookstore. In the first two months of business, Amazon sold to all 50 states and over 45 countries. Within two months, Amazon's sales were up to $20,000/week. While the largest brick and mortar bookstores and mail order catalogs might offer 200,000 titles, an online bookstore could "carry" several times more, since they had an almost unlimited virtual (not actual) warehouse: those of the actual product makers/suppliers. Bezos wanted a name for his company that began with "A" so that it would appear early in alphabetic order. He began looking through the dictionary and settled on "Amazon" because it was a place that was "exotic and different" just as he planned for his store to be, and he believed it was the biggest river in the world, and he planned to make his store the biggest in the world. Since 2000, Amazon's logotype has been an arrow leading from A to Z, representing that they carry every product from A to Z. Amazon was incorporated in 1994, in the state of Washington. In July 1995, the company began service and sold its first book on Amazon.com: Douglas Hofstadter's Fluid Concepts and Creative Analogies: Computer Models of the Fundamental Mechanisms of Thought. In October 1995, the company announced itself to the public. In 1996, it was reincorporated in Delaware. Amazon issued its initial public offering of stock on May 15, 1997, trading under the NASDAQ stock exchange symbol AMZN, at a price of US$18.00 per share ($1.50 after three stock splits in the late 1990s). Amazon's initial business plan was unusual; it did not expect to make a profit for four to five years. This "slow" growth caused stockholders to complain about the company not reaching profitability fast enough to justify investing in, or to even survive in the long-term. When the dot-com bubble burst at the start of the 21st Century, destroying many e-companies in the process, Amazon survived, and grew on past the bubble burst to become a huge player in online sales. It finally turned its first profit in the fourth quarter of 2001: $5 million (i.e., 1¢ per share), on revenues of more than $1 billion. This profit margin, though extremely modest, proved to skeptics that Bezos' unconventional business model could succeed. In 1999, Time magazine named Bezos the Person of the Year, recognizing the company's success in popularizing online shopping.
    • Barnes & Noble sued Amazon on May 12, 1997, alleging that Amazon's claim to be "the world's largest bookstore" was false. Barnes and Noble asserted, "[It] isn't a bookstore at all. It's a book broker." The suit was later settled out of court, and Amazon continued to make the same claim."Walmart sued Amazon on October 16, 1998, alleging that Amazon had stolen their trade secrets by hiring former Walmart executives. Although this suit was also settled out of court, it caused Amazon to implement internal restrictions and the re-assignment of the former Walmart executives. “Amazon.com strives to be the Earth’s most customer-centric company where people can find and discover virtually anything they want to buy online.” Acquisitions      1998: PlanetAll, a reminder service based in Cambridge, Massachusetts; Junglee, an XML-based data mining startup based in Sunnyvale; Bookpages.co.uk,a UK online book retailer, which became Amazon UK on October 15, 1998. 1999: Internet Movie Database (IMDb); Alexa Internet, Accept.com, and Exchange.com 2003: Online music retailer CDNow.By 2011, the web site cdnow.com was defunct and in use by a different company. 2004: Joyo.com, a Chinese e-commerce website. 2005: BookSurge, a print on demand company, and Mobipocket.com, an eBook software company.[35][36] CreateSpace.com (formerly CustomFlix), a distributor of ondemand DVDs, based in Scotts Valley, California. CreateSpace has since expanded to include on-demand books, CDs, and video.
    •         2006: Shopbop, a retailer of designer clothing and accessories for women, based in Madison, Wisconsin. 2007: dpreview.com, a digital photography review website based in London; Brilliance Audio, the largest independent publisher of audiobooks in the United States. 2008: Audible.com; Fabric.com; Box Office Mojo; AbeBooks; Shelfari; (including a 40% stake in LibraryThing and whole ownership of BookFinder.com, Gojaba.com, and FillZ); Reflexive Entertainment, a casual video game development company. 2009: Zappos, an online shoe and apparel retailer Lexcycle, SnapTell, an image matching startup. 2010: Touchco.,Woot, Quidsi, BuyVIP, Amie Street. 2011: LoveFilm, The Book Depository, Pushbutton Yap 2012: Kiva Systems, TeachstreetEvi 2013: IVONA Software, GoodReads Investment   2008: Engine Yard, a Ruby-on-Rails platform as a service (PaaS) company 2010: LivingSocial, a local deal site. Subsidiaries     2004: A9.com, a company focused on researching and building innovative technology. 2004: Lab126, developers of integrated consumer electronics such as the Kindle. 2007: Endless.com, an e-commerce brand focusing on shoes. 2007: Brilliance Audio, the largest independent audio book producer in the U.S. Merchant partnerships Until June 30, 2006, typing ToysRUs.com into a browser would bring up Amazon.com's "Toys & Games" tab; however, this relationship was terminated due to a lawsuit. Amazon also hosted and managed the website for Borders bookstores but this ceased in 2008. From 2001 until August 2011, Amazon hosted the retail website for Target. Benefit Cosmetics, another merchant partner of Amazon, has also launched a major E-Commerce platform of their own based on Hybris and arvato systems NA, in the US, EU and China. Amazon.com operates retail websites for Sears Canada, bebe Stores, Marks & Spencer, Mothercare, and Lacoste. For a growing number of enterprise clients, currently including the UK merchants Marks & Spencer, Benefit Cosmetics' UK entity, edeals.com, and Mothercare, Amazon provides a unified multichannel platform where a customer can interact with some people they call the retail website, standalone in-store terminals, or phone-based customer service agents. Amazon Web Services also powers AOL's Shop@AOL. On October 18, 2011, Amazon.com announced a partnership with DC Comics for the exclusive digital rights to many popular comics, including Superman, Batman, Green Lantern, The
    • Sandman, and Watchmen. The partnership has caused well-known bookstores like Barnes & Noble to remove these titles from their shelves. These titles will be available for purchas e exclusively through Amazon's new Kindle Fire tablet. Locations Amazon has offices, fulfillment centers, warehouses, customer service centers and software development centers across North America, Latin America, Europe, Africa, and Asia.  North America o USA                 Goodyear, AZ Phoenix, AZ Patterson, CA (opening summer 2013) San Bernardino, CA Tracy, CA (opening 2014) Middletown, DE New Castle, DE Jeffersonville, IN Plainfield, IN Whitestown, IN Coffeyville, KS Campbellsville, KY Hebron, KY (near Cincinnati, OH) Lexington, KY Louisville, KY Robbinsville, NJ (opening early 2014)                  Fernley, NV North Las Vegas, NV Nashua, NH Breinigsville, PA Carlisle, PA Hazleton, PA Lewisberry, PA Lexington, SC Spartanburg, SC; Chattanooga, TN Lebanon, TN Murfreesboro, TN [83] Irving, TX (between Dallas and Fort Worth) Chester, VA Dinwiddie, VA (near Richmond, VA) Sterling, VA Bellevue, WA
    •  o    DuPont, WA (opening 2013) Sumner, WA.  Canada  Mississauga, Ontario  Annacis Island a part of Delta, British Columbia Europe o United Kingdom, as of 2013, 7 in operation with 3 more planned.  England  Marston Gate (near Brogborough)  Rugeley, Staffordshire  Peterborough  Doncaster  Hemel Hempstead  Scotland  Gourock (Inverclyde)  Dunfermline (Fife)  Wales  Crymlyn Burrows [87][88]  Swansea (near Jersey Marine) o France  Boigny-sur-Bionne (2000)  Saran (2007)  Montélimar (2010)  Sevrey (Autumn 2012) o Germany  Bad Hersfeld (1996 and 2010) (Hessen) o o o o  Leipzig (2006) (Saxony) Werne (2010) (North Rhine-Westphalia)  Rheinberg (2011) (North Rhine-Westphalia)  Graben (2011) (Bavaria)  Koblenz (2012) (Rhineland-Palatinate)  Pforzheim (2012) (BadenWürttemberg) Netherlands  Amsterdam Italy  Castel San Giovanni (2011) (Emilia-Romagna) Slovakia: Bratislava (2011) Spain  San Fernando de Henares (Madrid) Asia o o o Japan         China     India  Ichikawa Yachiyo Chiba Sakai Daito Osaka Kawagoe Saitama Guangzhou Suzhou Beijing Chengdu Mumbai Fulfillment and warehousing Fulfillment centers are located in the following cities, often near airports. These centers also provide warehousing and order-fulfillment for third-party sellers: Warehouses are large and each has hundreds of employees. Employees are responsible for four basic tasks: unpacking and inspecting incoming goods; placing goods in storage and recording their location; picking goods from their computer recorded locations to make up an individual shipment; and shipping. A central computer which records the location of goods and maps out routes for pickers plays a central role; employees carry hand-held computers which communicate with the central computer and monitor their rate of progress. A picker with their
    • cart may walk 10 or more miles a day. In the United Kingdom initial staffing was provided by Randstad Holding and other temporary employment agencies. Some workers are accepted as Amazon employees and granted pension and shares of stock; others are dismissed. "When we have permanent positions available, we look to the top performing temporary associates to fill them." Development of a high level of automation is anticipated in the future following Amazon's 2012 acquisition of Kiva Systems, a warehouse automation company. II. Products and Services Retail goods Amazon product lines include books, music CDs, videotapes and DVDs, software, consumer electronics, kitchen items, tools, lawn and garden items, toys & games, baby products, apparel, sporting goods, gourmet food, jewelry, watches, health and personal-care items, beauty products, musical instruments, clothing, industrial & scientific supplies, and groceries. The company launched amazon.com Auctions, a web auctions service, in March 1999. However, it failed to chip away at the large market share of the industry pioneer, eBay. Later, the company launched a fixed-price marketplace business, zShops, in September 1999, and the now defunct partnership with Sotheby's, called Sothebys.amazon.com, in November. Auctions and zShops evolved into Amazon Marketplace, a service launched in November 2000 that let customers sell used books, CDs, DVDs, and other products alongside new items. Today, Amazon Marketplace's main rival is eBay's Half.com service. In August 2007, Amazon announced AmazonFresh, a grocery service offering perishable and nonperishable foods. Customers can have orders delivered to their homes at dawn or during a
    • specified daytime window. Delivery was initially restricted to residents of Mercer Island, Washington, and was later expanded to several ZIP codes in Seattle proper. AmazonFresh also operated pick-up locations in the suburbs of Bellevue and Kirkland from summer 2007 through early 2008. In 2012, Amazon announced the launch of Vine.com for buying green products, including groceries, household items and apparel. It is part of Quidsi, the company that Amazon bought in 2010 that also runs the sites Diapers.com (baby), Wag.com (pets) and YoYo.com (toys). Amazon also owns other e-commerce sites like Zappos.com, Shopbop.com and Woot. Amazon's Subscribe & Save program offers a discounted price on an item (usually sold in bulk), free shipping on every Subscribe & Save shipment, and automatic shipment of the item every one, two, three, or six months. In 2013, Amazon launched its site in India, amazon.in. It has started with electronic goods. However, it plans to expand into fashion apparel, beauty, home essentials and health care categories by the end of 2013. Consumer electronics In November 2007, Amazon launched Amazon Kindle, an e-book reader which downloads content over "Whispernet", via the Sprint NextelEV-DO wireless network. The screen uses E Ink technology to reduce battery consumption and to provide a more legible display. As of March 2011, the stated library numbers over 850,000 titles. In September 2011, Amazon announced its entry into the tablet computer market by introducing the Kindle Fire, which runs a customized version of the operating system Android. The exceedingly low pricing of Fire ($199 USD) was widely perceived as a strategy backed by Amazon's revenue from its content sales, to be stimulated by sales of Fire. Computing services Amazon launched Amazon Web Services (AWS) in 2002, which provides programmatic access to latent features on its website. Amazon Web Services (AWS) was first launched as a public beta of Amazon Elastic Compute Cloud running Microsoft Windows Server and Microsoft SQL Server. This was later expanded to several operating systems, including various flavors of Linux and OpenSolaris.
    • In November 2005, amazon.com began testing Amazon Mechanical Turk, an application programming interface (API) allowing programs to dispatch tasks to human processors. In March 2006, Amazon launched an online storage service called Amazon Simple Storage Service (Amazon S3). An unlimited number of data objects, from 1 byte to 5 terabytes in size, can be stored in S3 and distributed via HTTP or BitTorrent. The service charges monthly fees for data stored and transferred. In 2006, Amazon introduced Amazon Simple Queue Service (Amazon SQS), a distributed queue messaging service, and product wikis (later folded into Amapedia) and discussion forums for certain products using guidelines that follow standard message board conventions. Also in 2006, Amazon introduced Amazon Elastic Compute Cloud (Amazon EC2), a virtual site farm, allowing users to use the Amazon infrastructure to run applications ranging from running simulations to web hosting. In 2008, Amazon improved the service by adding Elastic Block Store (EBS), offering persistent storage for Amazon EC2 instances and Elastic IP addresses, and offering static IP addresses designed for dynamic cloud computing. Amazon introduced SimpleDB, a database system, allowing users of its other infrastructure to utilize a highreliability, high-performance database system. Amazon continues to refine and add services to AWS, adding such services as Scalable DNS service (Amazon Route 53), payment handling, and AWS specific APIs for their Mechanical Turk service. In August 2012, Amazon announced Amazon Glacier, a low-cost online file storageweb service that provides reliable data archiving, storage, and backup. In November 2012 at AWS' web developer conference in Las Vegas it announced it was targeting large companies as cloud storage clients. It will further cut its S3 prices to customers with long-term contracts in its "Redshift" storage service launching in 2013. In March 2013 Amazon announced its Mobile Ads API for developers. The new Ads API can be used on apps distributed on any Android platform as long as the app is also available on Amazon’s Appstore
    • III. Service Management System Amazon does not ‘deliver customer service’, they build powerful partnerships. Amazon’s customer service has always been recognized and applauded as world-class. This is remarkable, especially since it is a purely online retailer. Amazon has hardly any ‘human’ interactions – often considered crucial perception points for increasing customer satisfaction and loyalty – in the value delivery chain. Customer satisfaction survey has rated Amazon as #1 among all online retailers. Many companies try to emulate Amazon and cost-effectively provide higher levels of service through leveraging technology. But Amazon does not only ‘deliver customer service’ – they build powerful partnerships with their customers. Every service cycle is a series of interconnected conversations: Explore, Agree, Del iver and Assure. 1. EXPLORE: find out what is important to the other person. 2. AGREE: make a promise to do something on their behalf. 3. DELIVER: do what you promised. 4. ASSURE: check and make sure they are satisfied. 5. EXPLORE to start a new cycle again To build powerful partnerships with ever growing levels of trust, a service provider must become excellent in all four stages. Most companies are chronically weak in at least one, which jeopardizes this accumulation of trust. How does Amazon do it? How does Amazon help you EXPLORE?  Search by any topic or title. View related titles, other titles by the same author, and titles of books purchased by people who also purchased this book.
    •   Amazon provides book reviews from other readers as well as the publisher and author. If you are a member of a specific community, company or affinity group, Amazon tells you what books people in that group are buying now. How does Amazon AGREE?   You can have products sent to multiple locations, request individual giftwrapping, pay either by credit card, wire transfer or check. You can choose standard, express or overnight delivery and see the costs of each before deciding. If a product is not in stock, you can have each item sent as it becomes available, or hold and ship all your items at once. If you choose the first option, Amazon guarantees shipping costs will be no more than if you chose the second. How does Amazon DELIVER?      As soon as you place an order, you receive an e-mail confirming all the details. You can change it if you reply right away. When your order is filled, you get another confirmation by e-mail. Your credit card is charged only when the order is actually shipped. Products are packed in strong boxes with extra padding to ensure they reach you in good condition. You can track your orders in process and see your complete order history at any time. Inside each box is a complete description of the order and an attractive bookmark, useful information or gift. How does Amazon ASSURE?   Amazon is committed to your complete satisfaction. If you have a problem, they will reply to you quickly by e-mail and take remedial actions right away. If you have any suggestions to help improve the service, Amazon enthusiastically welcomes your ideas. By continuously Stepping UP! in all four stages, Amazon earns high levels of customer satisfaction with every purchase, builds extraordinary levels of loyalty and converts ‘one-shot’ deals into powerful partnerships.
    • IV. SWOT Analysis STRENGTHS  Cost leadership strategy. The goal of cost leadership strategy is to produce products and services with a lower cost than the competitors do. The key to achieve this strategy are the economies of scale. For Amazon to succeed with the cost leadership strategy it has to provide the widest range of products to achieve the economies of scale and benefit from the low costs of displaying those products on its online marketplace. In a result, the business became the largest online retailer in the world.  Superior quality services and products. Amazon delivers only the best quality services and products. It is reliable, convenient, offers one of the lowest and fastest shipping, the lowest price, many free additional features with its services and has the widest selection of goods. Amazon has a brand reputation for great customer service. Shipping free and time delivery service. When people purchase items which Amazon.com holds more than $25, the shipping cost will be free. To receive items safely, people can order Guaranteed Accelerated Delivery that buyers can choose delivery speed.  Strategic acquisitions. Amazon has been successfully acquiring new firms to bring the new products, services, capabilities, assets and skills to the business. Due to these strategic acquisitions Amazon is now capable of offering cloud services, has developed its information management (IM) and customer relationship management (CRM) skills.  Efficient logistics and distribution. Amazon has a number of fulfillment warehouses in each market it operates. The warehouses are geographically spread in each country so the goods could be dispatched faster and with lower cost. Amazon.com is recognized worldwide as it has international sites; Canada, United Kingdom, Germany, Japan, France, and China.  Economies of scope. Economies of scope are the savings that come from producing two or more goods (or providing services) at less cost than producing each individually using the same resources and technology. Amazon experiences economies of scope by using its superior IT skills to offer the largest range of products online (instead of offering fewer products). It also uses excess server capacity (which originally were built to support online marketplace) to provide cloud computing services.  Everybody can find virtually any item with lower prices especially, Books, DVDs, and music. Amazon.com has expanded to provide music download called “amazonMP3,” which is ¢10 cheaper than iTunes.  Amazon.com has produced wireless reading device called “Kindle.” Subsequently, electronic books for the Kindle can be bought from only “amazonKindle,” hence as a
    • result of the monopoly, they make a lot more profit from selling the kindle and its compatible electronic books  Amazon.com collects information on each customer’s likes and dislikes based on what they view or purchase on the site, while constantly making suggestions through e-mail on items the customer might like to view or purchase.  Amazon is the dominant online retailer. The Seattle-based company is synonymous with online shopping. You can buy anything, from the useful to the questionable.  As it does business exclusively online, it doesn't have as much overhead as some of its competitors, including Barnes & Noble(NYSE: BKS), Wal-Mart (NYSE: WMT) and even Apple (NASDAQ: AAPL). Compare Wal-Mart's $85.27 billion SG&A last fiscal year with Amazon's relatively paltry $9.93 bilion. Apple spent over $10 billion on SG&A last year as well. Those cool stores aren't cheap to maintain. WEAKNESSES  Only online presence. Amazon lacks physical presence like retailers such as Wal-Mart and Target. People can see and touch the purchases there and buy them instantly. Amazon.com has sold daily goods such as cleaning cloths. Most of customers do not purchase by online, and they get in offline retail stores because it is faster and to get.  Selling at zero margins. Many of the products the Amazon offers are sold at zero margins to gain the market share and push the competition out of the market. In a short
    • term, it is a strong tactical move (due to Amazon’s cost leadership strategy) but in the long run it only hurts firm’s profits. Competitors will adapt and can easily gain their market share back by pursuing differentiation strategy.  Negative publicity. Amazon has recently attracted much negative publicity due to its tax avoidance in the countries (UK and US) where it earns most of its revenues. Amazon is also criticized for poor warehouse conditions for workers, anti-competitive actions, price discrimination and etc.  Amazon.com does a daily check and a constant maintenance of its server to ensure the functioning of its systems. These are checks are costly and risky as a failure in any of its systems could lead to a loss of customers.  The company's cost structure can become a liability. The company posted a loss last quarter of $27 million. A lot of its costs come from the cost of media. Those TV shows and movies it's streaming on Prime cost money.  The online retail indsutry has a relatively low barrier to entry: Anyone can start an online store. Just fill out the paperwork and sign a contract with FedEx or UPS. On the other hand, it's hard for small businesses to compete with Amazon's economies of scale. That would be like bringing a knife to a nuclear bomb fight. A better bet for them is to specialize, like Zappos does for shoes ... and which Amazon happens to own.  As nice and technically solid as the Kindle Fire is, it will always be perceived as an iPad knockoff. As Seth Myers put it on Saturday Night Live: "It's expected to sell well among parents who always buy the wrong thing," even though Kindles existed before iPads did. It's kind of like Oreos stealing the thunder of Hydrox cookies.  The company still gets flak for breakdowns in customer service. The company recently froze a Danish woman's Kindle Fire before reinstating her after bad publicity broke out over the Web. The incident recalls an earlier publicity black eye after Amazon remotely sent copies of George Orwell's 1984 down the memory hole. OPPORTUNITIES  Online payment system. Amazon could extend its current payments system and introduce the service similar to PayPal. Amazon’s payment system would be of great use for mobile buyers who usually by on the go and find it hard to provide bank details or other personal information that is required when purchasing the product. In addition, such service could be used by many other online retailers for a small fee.  Release more own brand products and services. With an access to such large market, Amazon could benefit by releasing more of its own brand products.
    •  Increase services and product portfolio through acquisitions. The company has already acquired many companies to successfully extend its products and services offering.  Open more online stores in other countries. To sustain current growth levels, Amazon could open its online marketplaces in other large and growing economies in Asia and Europe.  Physical presence. The business could establish some physical presence in the markets it operates. Smaller store-warehouse (like Argos’ stores) outlets could serve as warehouses, distribution centers, the stores where customers could pick up their purchases and physical contact points. Amazon’s brand presence would be significantly improved. THREATS  Online security. Amazon stores its online shoppers’ personal information, such as bank account details, which is a target for online thefts. The more online customers Amazon has, the more attractive as a target it becomes.  Lawsuits. The business has already attracted much negative attention from UK and U.S. authorities for tax avoidance and is subject for litigations and fines. Lawsuits are costly and consume time.  Strategic alliances. Although Amazon is a massive online shopping mall and can’t be easily surpassed by small competitors, it faces serious challenges from strategic alliances. For example, the strategic alliance between Apple and e-books content providers allowed the content providers to demand that Amazon would sell e-books for higher price or that they will sell their e-books through Apple store only. Without the strategic alliance, content providers were unable to compete against Amazon’s bargaining power.  Legislation against tax avoidance. There are growing concerns over how huge multinational companies, such as Amazon, avoid paying taxes for the countries they operate in. Eventually, governments will pass a legislation requiring that all companies would pay a fair share of taxes. In this case, Amazon’s profits would be significantly affected.  Regional low cost online retailers. Regional low cost online retailers could outrival Amazon on faster and cheaper shipping, localized product offering and better knowledge about home market.  Amazon.com is difficult to compete with other online stores such as eBay beca use both of them are selling similar products and having similar categories of products. Online stores normally sales huge range of products that are produced by other companies. If Amazon.com does price competition, it will damage about loss profit.
    •  Competitors can always offer lower prices. Products on Amazon are often significantly cheaper than the retail list price already. As the result of SWOT analysis, Amazon.com has very high qualities as e-commerce, which became No.1 in the Internet Retailer Top 500 Guide in the fourth quarter of 2007. Amazon’s mission is providing a place to buy easier and faster, and enjoy doing shopping for everybody. As internet marketing strategies, it is important for Amazon.com to consider customer value and marketing relationship for loyalty. To keep being high e-business, Amazon.com needs to improve on point of customer value. So will Amazon keep its place as the king of the Internet retail mountain? We'll have to wait for it to release its earnings to see, but with this analysis, it's obvious that the company has a strong position. V.        Recommendations Sustain value o Focus on core competencies and understand your business boundaries o Maintain visionary leadership o Brand image will help sustain value o Exploit opportunities and build entry barriers o First mover advantages Increase collaboration with channel partners. Enhanced integrated marketing o Communicate to more clients in the global markets Forward-integration o Promote and manipulate where products and services are being sold Continued focus on R&D o Innovative strategies and devices to provide a competitive advantage in the electronics marketplace Positive cash flow o Upward trends in sales o Technology and restructuring costs might level off o Estimated increase in revenue from hosting o Conduct focus groups o Collect customer data Exponential growth o Long-term positive forecasts for U.S. online retailing
    • o Focus on providing infrastructure services o Promote more in online retailing o Build alliances for hosting services for other product categories [kitchen/home improvement, electronics, software] VI. Conclusions Technological innovation drives the growth of Amazon.com to offer customers more types of products, more conveniently and at lower prices. Since 1995, Amazon has significantly expanded its product selection, international retail websites, and worldwide network of fulfillment and customer service centers. Today, Amazon retail websites offer everything from toys and video games to MP3 downloads and collectible items. Amazon’s evolution from Web site to e-commerce and publishing partner to development platform is driven by the spirit of innovation that is part of the company’s DNA. The world’s brightest technology minds come to Amazon to research and develop new technologies that improve the lives of our customers: shoppers, sellers, content creators, and developers around the world. Because that's what being Earth's most customer-centric company is all about, and it's still Day One at Amazon. VII. References http://www.strategicmanagementinsight.com/swot-analyses/amazon-swot-analysis.html http://www.slideshare.net/sfarooqui.5/amazoncom-swot-analysis http://aws.amazon.com/fws/ http://aws.amazon.com/pricing/fws/ http://en.wikipedia.org/wiki/Amazon.com http://www.amazon.com/CareersHomepage/b?ie=UTF8&node=239364011http://beta.fool.com/ddelony/2012/12/28/swotanalysis-amazon/18812/ http://www.managementparadise.com/forums/principles-management-p-o-m/208111swot-analysis-amazon-com.html http://www.amazon.com/Careers-Homepage/b?ie=UTF8&node=239364011