Summary of the Analysis
The mission statement of the company is efficient because it states what Amazon is, what it does, and why it exists, which are critical features. It also provides a guideline for the pricing strategy of the corporation; for instance, its choice to offer the lowest prices for quality products makes it very attractive to online shoppers. The firm formulates and implements its grand strategies, such as pricing, integration, diversification, location, and pricing based on its vision and mission statements. The SWOT analysis reveals that it has significant strengths that give it a competitive edge over its competitors. It also has weaknesses and threats that hinder its performance; however, it also has opportunities it can exploit to enhance its performance. In this regard, it should engage in international expansion into developing countries to reach more consumers and expand its market share. However, it observes strict ethical principles in its operations; for example, it engages in CSR and environmental sustainability activities, such as using recyclable materials in packaging its goods. However, it has failed to observe the privacy rights of its customers by monitoring their browsing habits and using their personal details in its big data strategy.
Deeper Evaluation of Amazon’s Mission Statement
According to the company’s website, the mission statement states that “We strive to offer our customers the lowest possible prices, the best available selection, and the utmost convenience” (Earth’s Biggest Selection” par. 2). It clearly describes the organization in terms of its reasons for existence and what it specializes in, which are the primary attributes of an effective mission statement (Gamble and Thompson 20). As opposed to the vision statement, which lacks a future orientation, the content and emphasis of the mission statement are forward-looking, and it provides information on the specifics that the business plans to engage in to realize a better world. For example, its claims to offer the best selection of products at the lowest price possible to its customers.
The mission statement guides the pricing strategy of Amazon; for instance, the aspect of offering the lowest prices for the finest goods makes Amazon very attractive to internet-based shoppers. This is because transacting online significantly lowers operating costs. This is further enhanced by the element of having the best selections that are offered for the convenience of customers, an aspect that enhances its performance (Niven 55).
Despite capturing the essence of the company, the mission statement falls short of some of the important requirements of an effective strategic statement. For example, it fails to identify the products that the company is aimed at delivering (Gamble and Thompson 23). In this regard, the external stakeholders are not able to know the exact benefits that they will receive from the business by simply reading its mission statement. It also fails to identify the specific markets or customer groups that it targets.
Amazon’s Strategy
The strategies of Amazon are derived from the vision and mission statements of the company. The corporation’s implementation of its grand policies is also based on the two aspects. In this regard, it utilizes business tactics, such as pricing, integration, diversification, location, and pricing.
The vision states that Amazon aims at offering all products to consumers through an online means. This is evident in its marketing mix, including pricing, product, promotion, and place. Amazon has positioned (placed) itself online, and it also does its promotional activities online for all its customers. The pricing strategy of Amazon is guided by its mission statement; for example, it offers high-quality products at a very low cost to its clients. The mission statement also states that it aims at offering different goods to its patrons, which guides its diversification strategies. For example, it currently offers different categories of products, such as apparel, accessories, electronics, music, and books (Rao and Purkayastha 405).
SWOT Analysis of Amazon
Strengths. Amazon has a big data resource compared to its competitors, which gives it a competitive edge on market knowledge.
Amazon is ranked as the top e-commerce shopping site, and hence, has a competitive edge as customers make it their first choice when looking for an online shop.
It offers a wide variety of products, for example, books, apparel, and accessories as opposed to its competitors.
It has many partners and has a presence in many foreign countries giving it access to a larger market.
Weakness.
It has not ventured into developing countries.
It over-relies on technology and online transactions, and hence, it is vulnerable to technological failure.
Opportunities
Technological advancements are making transactions easy.
More people are embracing online shopping, and hence, it has more market opportunities now and in the future.
Threats
The digital era allows people to read books on the screens of their personal computers, and hence, only a few people buy physical books.
Competition from other online shops, for example, Book Zone, Book Stack, e-bay, and alibaba.com.
Amazon faces a significant threat of theft in its warehouses, and hence, it needs to establish an effective strategy to lower the risk.
Recommendation for Amazon
Based on the SWOT analysis above, Amazon has a high competitive edge in the e-commerce sector. The firm is well prepared to operate in the unstable business environment due to the numerous strengths and opportunities that it has in the market. The SWOT analysis also reveals several opportunities for Amazon to exploit, and in this regard, my chosen recommendation is to engage in international expansion with a special focus on developing countries.
It should particularly concentrate on developing nations because these regions present the future market opportunities for online shopping. Currently, this firm is concentrated in their developed counterparts where e-commerce markets are already saturated. Therefore, it should expand to the former where there is a large market segment of new online shoppers. This will also help it to overcome its weakness of the lack of presence in other parts of the globe and at the same time help it exploit the technological capabilities of such nations.
Ethics of the Industry and the Strategy Used by Amazon
The unauthorized possession or use of personal details of consumers is ethically wrong because it has safety and security consequences. For example, in this age of technological advancements, profiting from consumers’ personal details is inappropriate because it can be stolen and used by criminals, such as terrorists for identity theft and stealing money from bank accounts (Guo 405). It is a threat to the safety and security of consumers because it can be used to track them. Using cookies to track clients’ purchasing and browsing habits is morally wrong because it is an invasion of their privacy. The creation of a 360 degrees customer profile and the use of big data based on customers’ information were done without the consent of consumers, which was a major violation of consumers’ rights to privacy (Guo 403).
The firm also engages in various corporate social responsibility (CSR) activities in the U.S. and beyond (“About Amazon” par. 5). For instance, it offers financial support to non-profit organizations and schools across the world, for example, donations to the American Red Cross and St. Jude's Children Research Hospital. The firm also prioritizes its internal and external stakeholders to ensure that all of them are satisfied.
On the same note, it embraces sustainability and implements several environmental protection measures. For example, it uses easy to open and recyclable materials to wrap most of its products (“About Amazon” par. 5). It also recycles its waste products and has considerably reduced its emission of greenhouse (GHG) gasses into the atmosphere. What is more, it uses clean sources of energy, for example, renewable sources of energy like solar and wind in its facilities.
Works Cited
“About Amazon - In the Community - Amazon's Innovations for Our Planet.” Amazon.com, 2013. Web. 6 Jan. 2017. <https://www.amazon.com/p/feature/tdfn6a3sn2bg5xg>.
“Earth’s Biggest Selection.” Amazon.jobs, 2016. Web. 6 Jan. 2017. <https://www.amazon.jobs/en/business_categories/retail?base_query=&loc_query=&job _count=10&result_limit=10&sort=relevant&business_category%5B%5D=retail&cache>.
Gamble, John E., and Arthur A. Thompson. Essentials of Strategic Management: The Quest for Competitive Advantage. Boston, MA: McGraw Hill, 2009. Print.
Guo, Meirong. “A Comparative Study on Consumer Right to Privacy in E-Commerce.” Modern Economy 3.4 (2012): 402-407. Print.
Niven, Paul R. Balanced Score Card Step by Step: Maximizing Performance and Maintaining Results. 2nd ed. Hoboken, NJ: John Wiley & Sons, Inc. 2006. Print.
Rao, Adapa Srinavasa, and Debapratim Purkayastha. “Amazon’s Big Data Strategy.” Crafting & Executing Strategy: The Quest for Competitive Advantage: Concepts and Cases. London, UK: McGraw Hill Higher Education, 2011, pp. 403–412. Print.
