Introduction
Overview of Amazon
Amazon.com is considered as the first company that offers or sells goods with the use of the Internet. The company has evolved as one of the best and biggest established brand names in e-commerce businesses throughout the world. Amazon is an American company founded by Jeff Bezos in the year 1994. The initial offerings of the e-commerce business were to provide books to its customers but due to the success the company diversified to different product and service lines including electronic equipment and merchant programs, groceries, clothing, home appliances, and others (Amazon.com).
Objectives of the Paper
There are four primary objectives of the current paper. The paper is structured in the following pattern.
External Analysis
An external analysis comprises of processes to evaluate and scan various factors that are beyond the reach of an organization. The main aim of conducting an external analysis is to determine the factors that can have a potential impact on the organizational performance. For Amazom.com, PESTEL and Five forces model are examined to identify the general and industry environment respectively.
General Environment
PESTEL Analysis
PESTEL analysis explains the impact of future tends of political, economic, social, technological, environmental, and legal environment that might have a positive or negative impact on Amazon.com.
Industry Environment
Porter’s Five Forces Model
Five forces model is proposed by Michael Porter and helps to analyze any industry. The design contributes to determining the profit potential of the industry with the help of developing an understanding of industry competitors, Threat of new entrants, the threat of substitute, and power of buyers and suppliers.
Internal Analysis
It includes processes and procedures to identify and evaluate the specific characteristics of an organization that includes core capabilities, competencies, resources, weaknesses, and opportunities and threats.
SWOT Analysis
SWOT analysis of an organization highlights the strengths, weaknesses, opportunities, and threats for an organization that can allow to improve the current operations or performance and also to draw strategic importance to future perspectives (MarketLine 4).
Tangible Intangible Resources
The most important tangible resource for Amazon.com is the reliable web infrastructure including scalable IT systems and online retailing technologies. On the other hand, the core intangible resources available to Amazon.com are management and the maintenance of the overall infrastructure and centrally managed web services. The human resources of the business are the underlying cause of competitive advantage for Amazon.com.
Financial Data interpretation
The paper discusses the overall increase in financial data from 2009 till 2012.
Balance Sheet Items
The results show that total assets occupied by Amazon.com show a decrease from 2010-2012. The total liabilities for the business do not show a major downturn as compared to a decrease in overall assets. On the other hand, total stockholder’s equity fell at a drastic pace, the major reason of the decrease would be the fluctuation of share prices of Amazon.com from 1998-2014.
Income Streams and P&L Items
The sales value for Amazon.com increased from 2009-2011 and in the year 2012 the total sales dropped with a 13.5% (40.1% in 2011 – 27.1% in 2012). The table also shows that the company was able to maintain the cost of goods whereas, the expenses rose with from 2007-2012. Due to the decrease in sales for the years and increase in expenses responded in a decrease of overall net income for Amazon.com. The results show that the company faced losses for two consecutive years from 2011-2012.
Key Issues and Strategic Actions
PESTEL, five forces model, and SWOT-analysis carried out for Amazon.com help to derive some major problems that require immediate and efficient strategic implications. The policy implications are influential in raising the chances of success for Amazon.com in the future.
Works Cited
Amazon.com. Amazon.com: Online Shopping for Electronics, Apparel, Computers, Books, DVDs & more. 2016. Web. 22 July 2016 <https://www.amazon.com/>.
MarketLine. Amazon.com, Inc. SWOT Analysis. London: MarketLine, 2015. Print.
Sorce, Patricia, Victor Perotti and Stanley Widrick. Attitude and age differences in online buying. New York: Rochester Institute of Technology, 2005. Print.
