SWOT Analysis

SWOT is short for strengths, weaknesses, opportunities, and threats. It involves business competition or project planning.

  • Strengths are qualities of the organization that help achieve its goals.
  • Weaknesses are drawbacks that prevent the organization from meeting its goals.
  • Opportunities are events happening outside that help businesses.
  • Threats are external conditions that can badly affect the organization’s business performance.

SWOT Analysis

STRENGTHS

  • Things a company is good at
  • Things that make you different from your rivals
  • Resources in the company. For instance: skilled, experienced workforce
  • Material resources like intellectual property, capital, propriety technologies, etc.

WEAKNESSES

  • Things a company doesn’t have
  • Things rivals are better at
  • Limits to resources
  • USP that isn’t clear

OPPORTUNITIES

  • Demand for a product that hasn’t been met in the market
  • Few local rivals
  • Increasing demand for product and services
  • Media coverage

THREATS

  • New rivals
  • Increasing regulations
  • Negative attention in media
  • Change in customer opinion of the company

Amazon – STRENGTHS Analysis

Amazon's “Shipment Zero” Vision

1. Revenue and Margins

  • Sept. 30, 2020, was the most profitable quarter in Amazon.com Inc.’s history.
  • In the same quarter in the previous year, net sales were $69.98 billion. This saw a 37.4% increase to net sales of $96.15 billion.
  • In 2019, Amazon earned a net income of $6.33 billion, which increased by 196.7% from $2.13 billion in the same quarter.

2. Strong Brand Name

  • Amazon is a massive global e-commerce brand. That’s why it has a good brand image and is in a strong position in the market.

3. Largest Merchandise Selection

  • Amazon has a variety of products. This makes online customers buy most products from it, instead of its rivals.
  • 562.3 million Amazon products have been sold in its Amazon.com marketplace till 2018.

4. Technology

  • >150 Million An average Amazon non-Prime member spends $600. This is less than half the spending of the prime members, who spend $1400.
  • Revenue from subscriptions was $6.57 billion, up 32.6% from $4.96 billion. This includes Prime Fees.

5. Amazon Big data

  • It gathers more than 2000 historical and real-time data points on every single order.

6. Sellers Base

  • 2.5 million sellers are active on the Amazon marketplace.
  • 25,000 sellers on Amazon have crossed $1 million in sales, and 200,000 have crossed $100,000.

Amazon – WEAKNESSES Analysis

1. Lack of  Physical Stores

Slow in the adoption of the brick and mortar model.

2. Imitable business model

Rivals can build e-commerce websites for selling anything. Limited penetration in developing markets.

3. Lack of Physical Stores

Slow in the adoption of the brick and mortar model.

4. Imitable business model

Rivals can build e-commerce websites for selling anything.

5. Limited penetration in developing markets

Amazon has little presence in developing markets. So, it hasn’t been able to take advantage of its high economic growth rates.

Amazon – OPPORTUNITIES Analysis

1. Amazon Web Services (AWS) – OPPORTUNITIES

From the previous year, AWS revenue grew 29% in the third quarter of 2020. A lot of Amazon’s revenue comes from AWS. It earned $35.03 billion in 2019 net sales. This is an increase from $17.46 billion two years ago.

2. Prime Air

A service named Amazon Prime Air uses drones to deliver packages up to five pounds in half an hour or less.

3. A kick-start to the Physical Store Presence

Whole Foods acquisition

4. International Expansion

Amazon can grow in developing markets. Sweden saw a new Amazon marketplace launch in October 2020 (domain name Amazon.se.)

5. Growth in Private label segments

Its website has more than 100 private label brands in many markets. For instance: food and beverage, automotive, clothing, and electronics. Amazon’s own product sales grew by nearly 33% in Q3 2020.

Amazon – THREATS Analysis

1. Competition

Global offline retailers such as Walmart, Home Depot, Costco are Amazon’s competitors. Amazon has competition from e-tailers such as Alibaba from China, Walmart-backed Indian e-tailer Flipkart, and Jio Mart.

Competition from Netflix, Disney Hotstar, Hulu, Apple TV+

2. Cybercrime

Amazon was attacked by hackers in May 2019. They stole funds from its merchant accounts for over half of last year. The Seattle-based e-tailer said that unknown hackers stole money from around 100 seller accounts. Amazon said the hack took place between May 2018 and October 2018.

3. Government Regulations

Governments of many countries is looking into Amazon’s fair play practices and its anti-ambitious policies.