Amazon, the company that used to be perceived as a leader solely in the online retail market, has proven to be able to apply its successful strategies in multiple industries recently. Moreover, a strong brand, remarkable revenues, investments in research and development, and highly efficient logistics have contributed to the company’s rapid expansion into a number of spheres that are not directly linked to retail. Thus, the analysis and the recommendations concerning the information technology giant’s performance should be centered around the increasing influence that the company has developed over various branches of the information technology industry.
The company was founded as one of the first online bookstores in Seattle in 1995. The place was chosen due to the abundance of IT specialists who were initially drawn to the city by Microsoft’s success. Currently, the IT giant operates in numerous spheres globally and provides a wide range of services, such as cloud computing, digital streaming, and artificial intelligence. It is crucial to realize the essential role of the above-mentioned branches in the company’s development. The online retail market is no longer considered lucrative due to the influx of new competitors. Moreover, Janger and Twerski (2020) state that Amazon is currently criticized for having significant influence over third-party sales. At the same time, the expertise in the provision of multiple unique services has become the company’s competitive edge.
The company seeks to promote itself as the world’s top customer-centric company and the best employer. Moreover, Lincoln IV (2018) claims that Amazon depends on numerous trademarks, such as the logo, and seeks to strengthen and enhance the brand. The remarkable quality of the internal process analysis has proven to be central to Amazon’s rapid evolution. The company’s vision has turned it into one of the most popular companies among investment funds, banks, and individual investors.
The company’s mission statement emphasizes the role of technology in customer experience. Altrad et al. (2021) pinpoint that Amazon is one of the companies that fuel society’s transition to e-commerce. The IT giant also seeks to accelerate the delivery of various goods and the provision of a wide range of its services, focusing on their accessibility. Therefore, innovations continue to be perceived as the cornerstone of the company’s success.
Although the number of online retailers has been rising recently, it is vivid that even major competitors cannot rival Amazon’s dominant position. Walmart and eBay are not even close to Amazon when it comes to the volume of assets and brand awareness. Moreover, the company’s total liabilities and equities continue to demonstrate rapid growth. Despite the overall positive trend in most business metrics, the company’s mediocre gross profit margin points to the existence of certain challenges.
Internal factors play a remarkable role in the company’s performance. Therefore, it is crucial to realize its current strengths and weaknesses. Amazon’s revenue continues to grow rapidly, while millions of customers have an Amazon Prime subscription. Moreover, the company demonstrates a high satisfaction rate, which allows for even more loyalty and new content distribution channels, such as branded devices. Although a number of controversies concerning working conditions have raised multiple questions recently, Amazon continues to guarantee the highest minimum wages for its employees. Investments in highly lucrative spheres, such as pharmaceutics, enhance the company’s popularity among investors.
Although the number of strengths is considerable, there are specific weaknesses that should be taken into consideration. For instance, the current promotion and distribution system that is applied to thousands of employees should be enhanced in a timely manner in order to mitigate numerous issues and negative media coverage. Moreover, anti-trust lawsuits continue to represent a severe obstacle to the company’s development abroad. Therefore, the company should create a more flexible framework for the establishment of a proper relationship with multiple governments that demonstrate highly varied attitudes to Amazon’s dominant position.
Amazon should take advantage of the rapid increase in e-commerce popularity that was accelerated by the COVID-19 pandemic. Moreover, the company would benefit from allocating more resources to streaming services and other niches that have proven to be lucrative. Amazon should continue to invest heavily in medical technologies, as they are generally believed to be among the most essential in the 21st century. Therefore, given the slowdown in the global economic growth, the IT giant should shift its focus from consumer goods to high-tech services and research.
It would be highly beneficial for Amazon to raise funds by increasing debt, as the interest rates are currently extremely low. At the same time, the resources should be allocated predominantly to R&D and the promotion of Alexa and other innovative services. Exploring new opportunities for investments should become one of the company’s new priorities. For instance, participation in the development of autonomous vehicles can benefit the entire logistics network. Moreover, the company should establish new strategies that seek to enhance both customer and employee satisfaction, which is instrumental for sustainable development in the long run.
Altrad, A., Pathmanathan, P. R., Al Moaiad, Y., Endara, Y. M., Aseh, K., El-Ebiary, Y. A. B., Farea, M. M., Latiff, N. A. A., & Saany, S. I. A. (2021). Amazon in business to customers and overcoming obstacles. Proceedings of the 2nd international conference on smart computing and electronic enterprise (ICSCEE 2021), 175–179, IEEE. Web.
Janger, E. J., & Twerski, A. D. (2020). The heavy hand of Amazon: A seller not a neutral platform. Brooklyn Journal of Corporate, Financial & Commercial Law, 14(2), 259–273. Web.
Lincoln IV, C. A. E. (2018). Porter analysis: A business strategy of Amazon.com through a value chain and comparative advantage analysis of Amazon’s trademarks and intangibles. In W. H. Byrnes, & R. T. Cole (Eds.), Practical Guide to US Transfer Pricing (3rd ed.). LexisNexis.