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Amazon swot analysis 2017

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Amazon swot analysis 2017

  1. 1. AMAZON.COM SWOT ANALYSIS 2017
  2. 2. SLIDE | 2 ABOUT AMAZON Name Amazon.com, Inc. Logo Industries served • Internet, Amazon Web Services, Amazon Video) • Retail (Amazon Marketplace, Amazon Prime • Consumer Electronics (Amazon Kindle, Fire HD, Fire TV, Amazon Echo) Geographic areas served Worldwide Headquarters Seattle, Washington U.S. Current CEO Jeff Bezos Revenue US$107.006 billion (2015) increased 20.2% over $88.988 billion (2014) Profit US$595 million (2015) increased 347% over $(241) million (2014) Employees 230,800 (2016) Main Competitors Alibaba Group, Apple Inc., eBay Inc., Facebook Inc., Google Inc., IBM, Microsoft Microsoft Corporation, Netflix, Wal-Mart Stores Inc.,, and many other Internet and retail Internet and retail companies.
  3. 3. Amazon.com business overview from the company’s financial report: “Amazon.com opened its virtual doors on the World Wide Web in July Earth’s most customer-centric company. We are guided by four rather than competitor focus, passion for invention, commitment to long-term thinking. In each of our two geographic segments, we serve consisting of consumers, sellers, enterprises, and content creators. In services, such as advertising services and co-branded credit card We serve consumers through our retail websites and focus on selection, We design our websites to enable millions of unique products to be sold across dozens of product categories. Customers access our websites mobile websites and apps. SLIDE | 3 BUSINESS DESCRIPTION (1/4) “ ”
  4. 4. We also manufacture and sell electronic devices, including Kindle e- readers, Fire tablets, Fire TVs, Echo, and Fire phones. We strive to offer our customers the lowest prices possible through low everyday product pricing and shipping offers, and to improve our operating efficiencies so that we can continue to lower prices for our customers. We also provide easy-to-use functionality, fast and reliable fulfillment, and timely customer service. In addition, we offer Amazon Prime, an annual membership program that includes unlimited free shipping on millions of items, access to unlimited instant streaming of thousands of movies and TV episodes, and other benefits. SLIDE | 4 BUSINESS DESCRIPTION (2/4) “ ”
  5. 5. 1. online, offline, and multichannel retailers, publishers, vendors, distributors, manufacturers, and producers of the products we offer and sell to consumers and businesses; 2. publishers, producers, and distributors of physical, digital, and interactive media of all types and all distribution channels; 3. web search engines, comparison shopping websites, social networks, web portals, and other online and app-based means of discovering, using, or acquiring goods and services, either directly or in collaboration with other retailers; 4. companies that provide e-commerce services, including website development, advertising, fulfillment, customer service, and payment processing; 5. companies that provide fulfillment and logistics services for themselves or for third parties, whether online or offline; 6. companies that provide information technology services or products, including onpremises or cloud- based infrastructure and other services; and 7. companies that design, manufacture, market, or sell consumer electronics, telecommunication, and electronic devices. SLIDE | 5 BUSINESS DESCRIPTION (3/4) Our current and potential competitors include “ ”
  6. 6. We believe that the principal competitive factors in our retail businesses include: • Selection • Price • Convenience • Fast and reliable fulfillment SLIDE | 6 BUSINESS DESCRIPTION (4/4) “ ”
  7. 7. SLIDE | 7 STRENGTHS 1. Low cost structure, the largest merchandise selection and a huge number of third party sellers S W O T 22.5% 26.1% 38.5% 28.9% 27.9% 39.5% 40.5% 27.0% 21.9% 19.5% 16.3% 26.0% 24.0% 20.5% 3.8% 2.6% 16.6% 17.2% 14.7% 16.5% 15.4% 15.0% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0% 45.0% 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Amazon Growth Rate U.S. E-commerce Growth Rate In 2006-2015, Amazon has grown much faster than the entire U.S. e-commerce market.
  8. 8. SLIDE | 8 STRENGTHS Amazon follows a cost leadership strategy, but so do many other online and offline retailers. Why then does Amazon outperform them? S W O T What is the key to such success? According to Jeff Bezos, the founder and CEO of Amazon.com, the company’s success lies in its: • Low-cost structure • Selection • Third-party sellers
  9. 9. Amazon sells around 339.7 million of stock keeping units (SKU’s) in its Amazon.com Marketplace. In comparison, Walmart offers only 8 million SKU’s[5] in its online shop, or just 2.35% of the number of products that Amazon offers. SLIDE | 9 STRENGTHS S W O T Figure 3. Walmart prices compared to Amazon.com prices Source: Boomerang[6]
  10. 10. 1. Increasing long-term obligations-to-assets ratio Amazon’s debt-to-asset ratio has risen significantly over the past few years and it is now one of the highest among its competitors. SLIDE | 10 WEAKNESSES Company 2011 2012 2013 2014 2015 Total long-term debt Amazon 2.625 5.361 7.433 15.675 18.161 Wal-Mart 47.079 41.417 44.459 40.889 38.214 Long-term debt growth Amazon 68% 104% 38.6% 110% 15.9% Wal-Mart 7.4% (12%) 7.3% (8.0%) (6.5%) Debt/asset ratio Amazon 10.3% 16.5% 18.5% 28.7% 27.8% Wal-Mart 24.3% 20.4% 21.8% 20.1% 19.14% Figure 7. Amazon’s and Wal-Mart’s long-term obligations and debt-to-asset ratios (debt in US$ billions) Source: The respective companies’ financial reports [1][5] S W O T
  11. 11. 1. The e-commerce market is forecast to reach US$2.5 trillion by 2018, a projected growth of 89.1% in 4 years SLIDE | 11 OPPORTUNITIES S W O T Figure 10. Total e-commerce sales worldwide (actual and forecast), 2013-2018 1.077 1.316 1.592 1.888 2.189 2.489 25.9% 22.2% 20.9% 18.6% 16.4% 13.3% 2013 2014 2015 2016 2017 2018 Total E-Commerce Sales (in trillions, US$) Change (%) Source: eMarketer[30]
  12. 12. • Amazon currently operates in 7 of the 10 largest e-commerce markets in the world, including China, the U.S., the U.K., Japan, Canada, France and Germany. • China is also forecast to become the largest e- commerce market in the world • Amazon should open in Brazil, South Korea and Russia. SLIDE | 12 OPPORTUNITIES Countries 2014 2015 2016 2017 2018 1. China 315.75 426.26 562.66 871.79 1,011.28 2. U.S. 264.28 305.65 349.06 442.55 493.89 3. UK 70.39 82.00 93.89 114.64 124.96 4. Japan 62.13 70.83 79.33 96.87 106.07 5. Germany 51.91 63.38 73.46 91.97 99.33 6. France 34.21 38.36 42.62 49.71 53.26 7. South Korea 29.30 33.11 36.76 44.07 47.82 8. Canada 20.98 24.63 28.77 37.61 42.67 9. Russia 15.06 17.47 20.30 26.88 30.91 10. Brazil 13.34 16.28 18.80 23.79 26.17 Figure 11. Top 10 countries ranked by total e-commerce sales worldwide (actual and forecast, 2014-2018 (in US$ billions) Source: eMarketer[30] S W O T
  13. 13. 1. Wal-Mart’s efforts to establish itself as a leading online retailer The retail sales of physical stores compared to e-commerce sales are declining. Many retail companies, including Amazon’s key rival Wal-Mart, are making huge efforts to establish themselves as electronic commerce retailers. • In 2016, Wal-Mart’s e-commerce sales grew to over US$13 billion.[5] • Wal-Mart now has e-commerce websites in 11 countries and competes with Amazon in the U.S., U.K., Canada, China, India and Japan. SLIDE | 13 THREATS S W O T
  14. 14. Wal-Mart cannot compare to Amazon.com yet, but the company is strongly focusing on expanding its e-commerce operations: • New fulfillment centers • Fastest-growing retail app • Grocery deliveries • In-store pick up service SLIDE | 14 THREATS S W O T Although Walmart is still new to the e-commerce market, it already has some strengths that even Amazon cannot match.
  15. 15. 1. Amazon.com, Inc. (2016). Form 10-K for the Fiscal Year Ended December 31, 2015. Available at: http://phx.corporate- ir.net/phoenix.zhtml?c=97664&p=irol-reportsannual Accessed January 8, 2017 2. Internet Retailer (2016). TOP 500. Available at: https://www.internetretailer.com/top500/?cid=2015Top500-IRT-Lead#!/ Accessed January 8, 2017 3. Wingo, S. (2009). Amazon's Wheel of Growth. Available at: http://seekingalpha.com/article/121955-amazons-wheel-of-growth Accessed January 8, 2017 4. Monsoon Commerce (2015). How Many Products Does Amazon Really Sell? Available at: https://www.monsooncommerce.com/2015/06/how- many-products-does-amazon-really-sell/ Accessed January 8, 2017 5. Walmart (2016). Annual Report. Available at: http://s2.q4cdn.com/056532643/files/doc_financials/2015/annual/2015-annual-report.pdf Accessed January 8, 2017 6. Boomerang Commerce (2015). Introduction to Price Perception Index (PPI). Available at: http://www.boomerangcommerce.com/ppi- whitepaper-rboomerang/ Accessed January 8, 2017 7. Liddle, J. (2008). Amazon found every 100ms of latency cost them 1% in sales. Available at: http://blog.gigaspaces.com/amazon-found-every- 100ms-of-latency-cost-them-1-in-sales/ Accessed January 8, 2017 8. Smith, C. (2016). By The Numbers: 110+ Amazing Amazon Statistics. Available at: http://expandedramblings.com/index.php/amazon- statistics/ Accessed January 8, 2017 9. Interbrand (2016). Best Global Brands 2015. Available at: http://interbrand.com/best-brands/best-global-brands/2015/ranking/ Accessed January 8, 2017 10. Forbes (2016). The World’s Most Valuable Brands. Available at: http://www.forbes.com/powerful-brands/list/ Accessed January 8, 2017 11. Kline, D. B. (2015). Amazon's Sustainable Competitive Advantage. Available at: http://www.fool.com/investing/general/2015/05/18/amazons- sustainable-competitive-advantage.aspx?source=eptmsmlnk0000001 Accessed January 8, 2017 12. Mamiit, A. (2014). Amazon Order Fulfillment More Efficient with its Fleet of Robots. Available at: http://www.techtimes.com/articles/21229/20141201/amazon-order-fulfillment-more-efficient-with-its-fleet-of-robots.htm Accessed January 8, 2017 SLIDE | 15 SOURCES (1/4)
  16. 16. 13. Marsan, J. (2016). Order Fulfillment Services: Who’s The Best? Available at: http://fitsmallbusiness.com/order-fulfillment-services/ Accessed January 8, 2017 14. MWVPL International (2016). Amazon Global Fulfillment Center Network. Available at: http://www.mwpvl.com/html/amazon_com.html Accessed January 8, 2017 15. Jaruzelski, B., Staack, V. & Goehle, B. (2015). Innovations New World Order. Available at: http://www.strategy-business.com/feature/00370 Accessed January 8, 2017 16. Strategic Management Insight (2016). Google SWOT Analysis 2015. Available at: http://www.strategicmanagementinsight.com/swot- analyses/google-swot-analysis.html Accessed January 8, 2017 17. U.S. Patent and Trademark Office (2014). Patenting by Organizations 2013. Available at: http://www.uspto.gov/web/offices/ac/ido/oeip/taf/topo_13.htm Accessed January 8, 2017 18. U.S. Patent and Trademark Office (2015). Patenting by Organizations 2014. Available at: http://www.uspto.gov/web/offices/ac/ido/oeip/taf/topo_14.htm Accessed January 8, 2017 19. U.S. Patent and Trademark Office (2016). Patenting by Organizations 2014. Available at: http://www.uspto.gov/web/offices/ac/ido/oeip/taf/topo_15.htm Accessed January 8, 2017 20. Jaruzelski, B., Staack, V. & Goehle, B. at Strategy& (2014). The Global Innovation 1000: Proven Paths to Innovation Success. Available at: http://www.strategy-business.com/article/00295?pg=all Accessed January 8, 2017 21. Carvalho, C. & Marden, M. (2015). Quantifying the Business Value of Amazon Web Services. Available at: https://d0.awsstatic.com/analyst- reports/IDC_Business_Value_of_AWS_May_2015.pdf Accessed January 8, 2017 22. Butler, B. (2016). And the cloud provider with the best uptime in 2015 is. Available at: http://www.networkworld.com/article/3020235/cloud- computing/and-the-cloud-provider-with-the-best-uptime-in-2015-is.html Accessed January 8, 2017 23. Marino, J. (2015). The online grocery business faces a unique challenge. Available at: http://www.businessinsider.com/grocery-delivery- challenges-2015-3 Accessed January 8, 2017 24. IBIS World (2016). Supermarkets & Grocery Stores in the US: Market Research Report. Available at: http://www.ibisworld.com/industry/default.aspx?indid=1040 Accessed January 8, 2017 SLIDE | 16 SOURCES (2/4)
  17. 17. 25. Soper, S. (2011). Inside Amazon's Warehouse. Available at: http://articles.mcall.com/2011-09-18/news/mc-allentown-amazon-complaints- 20110917_1_warehouse-workers-heat-stress-brutal-heat Accessed January 8, 2017 26. Amazon.com (2016). About Shipping Large Items. Available at: https://www.amazon.com/gp/help/customer/display.html?nodeId=201117810 Accessed January 8, 2017 27. Market Wired (2013). A.T. Kearney Study Finds Brick & Mortar Stores Still Key to Consumers in the Omni channel World. Available at: http://www.marketwired.com/press-release/at-kearney-study-finds-brick-mortar-stores-still-key-consumers-omnichannel-world-1840725.htm Accessed January 8, 2017 28. Amazon.com, Inc. SWOT analysis by Strategic Management Insight Available at: https://www.strategicmanagementinsight.com/swot-analyses/amazon- swot-analysis.html Accessed January 8, 2017 29. Kantor, J. & Streitfeld, D. (2015). Inside Amazon: Wrestling Big Ideas in a Bruising Workplace. Available at: http://www.nytimes.com/2015/08/16/technology/inside-amazon-wrestling-big-ideas-in-a-bruising-workplace.html?_r=0 Accessed January 8, 2017 30. Ingram, M. (2015). Amazon to start paying more EU taxes after pressure from regulators. Available at: http://fortune.com/2015/05/25/amazon-tax-eu- regulators/ Accessed January 8, 2017 31. eMarketer (2014). Retail Sales Worldwide Will Top $22 Trillion This Year. Available at: http://www.emarketer.com/Article/Retail-Sales-Worldwide-Will- Top-22-Trillion-This-Year/1011765 Accessed January 8, 2017 32. Banjo, S. (2015). Walmart built the fastest-growing retail app by focusing on one key shopper habit. Available at: http://qz.com/499682/walmart-built-the- fastest-growing-retail-app-by-focusing-on-one-key-shopper-habit/ Accessed January 8, 2017 33. Perez, S. (2016). Walmart expands its curbside grocery pickup service in the US. Available at: http://techcrunch.com/2016/04/13/walmart-expands-its- curbside-grocery-pickup-service-in-the-u-s/ Accessed January 8, 2017 34. Bender, M. (2015). Grocery Shopping That Works with Your Schedule. Available at: http://blog.walmart.com/innovation/20150929/grocery-shopping-that- works-with-your-schedule Accessed January 8, 2017 35. Identity Theft Resource Center (2016). Identity Theft Resource Center Breach Report Hits Near Record High in 2015. Available at: http://www.idtheftcenter.org/ITRC-Surveys-Studies/2015databreaches.html Accessed January 8, 2017 36. Wallace, C. (2016). Amazon to collect Colorado sales tax on purchases starting Feb. 1. Available at: http://www.denverpost.com/business/ci_29390906/amazon-collect-colorado-sales-tax-purchases-starting-feb Accessed January 8, 2017 SLIDE | 17 SOURCES (3/4)
  18. 18. 36. Packaged Facts (2012). Private Label Foods & Beverages in the U.S., 7th Edition. Available at: http://www.packagedfacts.com/Private-Label-Food- 7165114/ Accessed January 8, 2017 37. Packaged Facts (2014). Private Label Foods & Beverages in the U.S., 8th Edition. Available at: http://www.packagedfacts.com/Private-Label-Foods- 8358109/ Accessed January 8, 2017 38. Supermarket News (2013). Private Label & National Brands: Paving the Path to Growth Together. Available at: http://supermarketnews.com/iri- reports/private-label-national-brands-paving-path-growth-together Accessed January 8, 2017 39. Kline, D. B. (2015). Can Amazon Disrupt the Grocery Market with a Private Label Brand? Available at: http://www.fool.com/investing/general/2015/06/01/can-amazon-disrupt-the-grocery-market-with-a-priva.aspx?source=iedfolrf0000001 Accessed January 8, 2017 40. Bensinger, G. (2015). Amazon Plans to Add Its Own Line of Food. Available at: http://www.wsj.com/articles/amazon-plans-to-add-its-own-line-of-food- 1432843763 Accessed January 8, 2017 41. Enright, A. (2015). The e-grocery explosion. Available at: https://www.internetretailer.com/2015/08/03/e-grocery-explosion?p=1 Accessed January 8, 2017 42. Ibis World (2016). Online Grocery Sales in the US: Market Research Report. Available at: http://www.ibisworld.com/industry/online-grocery-sales.html Accessed January 8, 2017 43. Marvin, G. (2015). US E-Commerce Sales Jump 14 Percent, Account For 7.2 Percent Of All Retail. Available at: http://marketingland.com/us-e- commerce-sales-jump-14-percent-account-for-7-2-percent-of-all-retail-139307 Accessed January 8, 2017 44. Bishop, B. (2014). Ready or not, here comes online grocery. Available at: http://supermarketnews.com/online-retail/ready-or-not-here-comes-online- grocery Accessed January 8, 2017 45. Nielsen (2015). The Future of Grocery. Available at: http://www.nielsen.com/us/en/insights/reports/2015/the-future-of-grocery.html Accessed January 8, 2017 SLIDE | 18 SOURCES (4/4)
  19. 19. SLIDE | 19 GET THE FULL PRESENTATION BUY AMAZON.COM SWOT 2017

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