Question

List out Amazon Competitive Analysis (assessment on the strengths and weaknesses of current and potential competitors. This analysis provides both an offensive and defensive strategic context to identify opportunities and threats), and the Target Market (a group of customers that the business has decided to aim its marketing efforts and ultimately, its merchandise towards). 500 words

Answer 1

Started operations back in 1995. In those days, its founder, Jeff Bezos, was simply beginning with a site that sold books. Yet, he already had a vision for the organization’s amazing development and rise to the top of internet retail. Indeed, from the very first moment, Bezos realized that he needed to make Amazon ‘an everything store

Amazon follows a cost leadership strategy, but so do many other online and offline retailers. Why then does Amazon outperform them?

• Low cost structure. By mainly selling online, Amazon doesn’t incur huge costs related to running physical retail outlets. Online marketplaces also potentially allow for selling more units without any increase in marginal costs.

  Amazon constantly invests in both additional fulfillment centers and to existing centers to enable a reduction in order fulfillment times and shipping costs. These time and cost savings result in lower prices that are passed on to consumers.

• Third party sellers. Amazon’s business model includes accommodating third party sellers who are able to offer their own merchandise on Amazon’s sites and whose products therefore compete against Amazon’s. At the beginning, third party sellers were mainly attracted to the Amazon Marketplace because of the high traffic to its stores. Now the main drivers are such programs as ‘Fulfilled by Amazon’ and Prime. Third party sellers often offer products that are not available through Amazon’s retail division.

• Synergies between Marketplace, Amazon Web Services, Prime and subscription services

  Amazon is involved in 4 key businesses:

• Amazon Marketplace
• Amazon Web Services (AWS)
• Subscription Service

To run an e-commerce website with millions of visitors each day the company had to invest heavily in its server infrastructure. These investments and the resulting server capacity have helped AWS to grow. In return, AWS provides two important elements for its sites:

• Speed. Page load speed is crucial for Amazon. Every 100ms of delay costs the company tens or hundreds of millions due to the lost customers. AWS helps to speed up the website’s load time, so that Amazon is able to serve each customer as quickly as possible. Subscription services also benefit from this. The content and especially, the video content is served very fast to the subscribers, increasing their satisfaction with the service.

• Capacity. During the peak times of Cyber Monday (the Monday after the Thanksgiving holiday in the U.S), Black Friday (the Friday after the Thanksgiving holiday), and in the several weeks leading up to Christmas, Amazon receives an overwhelming number of visitors to its sites. AWS’s huge capacity, which is not needed during the rest of the year, is employed during these peak times to help Amazon cope with the increased number of visitors