SWOT Analysis
Amazon
Chandler Stewart, Tanner Stallings, Makena Hoyt
MKTG 1030
Kammerman
09/15/15
INTRO
Amazon is an ecommerce site that sells a wide variety of products. Amazon is the number one online retailer in the United States, netting nearly 90 billion dollars in 2014 .

Amazon headquarters is based in Seattle, Washington. The founder of Amazon is Jeff Bezos, who created Amazon in 1994 as an online book store. Bezos wanted his website to be like nothing else before. Amazon got its name as Bezos looked through a dictionary and found the word Amazon, which means exotic and different, exactly what Bezos was looking for. In the first two months Amazon was open it was averaging $20,000 a week. As of July, 2015 Amazon employed 183,100 people. Amazon is an online store, therefore you can shop 24/7, you just have to wait for the product to arrive to your house.
STRENGTHS:
Amazon has many strengths that have helped them become the top online retailer.
Amazon offers a great variety of products that appeal to almost everyone, making their market very broad. They have various purchasing incentives (including Amazon Prime, free shipping on orders over $35) that encourage customers to purchase from them and not from other online

retailers. Another of Amazon’s strengths is that they were one of the first e-commerce sites to come to market. They founded their company in 1994, and being one of the first large ecommerce sites they were able to gain a large share of the market and have been able to build their brand loyalty. Amazon also uses the economic concepts of economies of scope and scale in their favor. They apply the concept of economies of scope by their production of a great variety of products which they store and produce in the same facilities and which go through the same channels. They apply economies of scale by mass producing their products, using the same molds and machines to make a large quantity of the same product to decrease the average production cost. The application of both of these economic concepts greatly benefits Amazon by decreasing their costs and it also makes it possible for them to sell their products for cheaper.
WEAKNESSES:
In the past few years Amazon has been branching out from its original focus of retailing books online. Now Amazon has broadened its market by providing thousands of different items far from books. This may seem like a strength but Amazon may lose one of its biggest advantages as it moves away from its original idea of selling books. Amazon is only an online retailer which may cause disadvantages to customers who want to see product that they are purchasing, as it is not tangible until you have already purchased it. In some of the images provided on the site it may seem difficult to get the full effect of the product being purchased or the description provided might not tell all the details about the product. Also there is less convenience because the customer has to wait to receive their purchases rather than a retailing store, like Walmart or Target, where you get the items you want on the spot. Amazon has also attracted negative publicity due to their tax avoidance in the US and UK, which happens to be

where they earn most of their revenue. Amazon strategically placed their company throughout the UK to avoid paying the full amount of taxes.
OPPORTUNITIES:
Amazon has multiple opportunities to expand their brand name to various countries while making a considerable amount of profit. One of the opportunities that Amazon has on their plate is to capitalize on making more products under their brand name instead of forwarding their customers to other sites for the specific product they want. An online payment could be considered their greatest opportunity because they can upscale and improve the company’s margins and seek the advantages of having their own online payment system. Amazon also has an opportunity to expand its global site in emerging markets which would make Amazon a higher competitor as an online retailing marketer. Adding to becoming a higher competitor online they can also expand their online market to other growing countries such as Asia or
Europe that could raise their revenue. The company also has opportunities to do collaborations with local retailing stores. Another opportunity for Amazon is the current push for higher education within America. The government and other organizations are promoting greater education, and with this Amazon has the opportunity to appeal to the college students to purchase textbooks.
THREATS:
One of Amazon’s biggest threats that relates highly to their customers is their online security. For many shoppers, having the chance that their bank account information and identity might be stolen is a factor heavily considered when choosing where to purchase a product. Also as mentioned in their weaknesses Amazon attracted negative attention from the lawsuit with the
UK and the US from the tax avoidance in recent years. Competitors such as Apple that team up

with other businesses have the opportunity to decrease Amazon’s sales and impact them as a retailer. Even though Amazon is one of the biggest online companies, without a strong alliance or partnership they have a chance of losing market share to their competition. Other online retailers are also becoming faster with shipping, cutting costs, and creating better knowledge about the market which might also put Amazon behind. Many people buy items from Amazon as gifts for others, which means mostly seasonal buying, causing high profit during certain months and low in others, setting them back from other retailers.
SUGGESTIONS
As Amazon has been vastly expanding to different markets over the last few years, we would suggest that they approach their expansion strategically and focus on the products they already sell without overexpanding. We would also suggest that Amazon strengthens their company by joining with a brick and mortar retailer creating a strong partnership that would shut down their competitors. This would allow people to access the tangibility of a product and then purchase it later if they decide to, decreasing consumer regret and the amount of returned products.