Amazon is currently has a formidable opponent in the form of Walmart and Target, as during the pandemic, it struggled to keep up with demand. The company began to systematically increase its delivery capabilities as the shipping requests increased drastically; however, it was not able to fully adapt to the situation. Moreover, Walmart and Target have also improved service with same-day delivery through their extensive store network. Currently, Amazon’s competitors should strengthen their position in the market more by developing further their logistics and shipping infrastructure.
Google is not able to compete with Amazon at the moment as it does not have a selling strategy that would match Amazon’s already established structure. Hitt et al. (2017) add that “a firm has a competitive advantage only when its strategy creates superior value for customers” (p. 4). Jet.com is also ceased to be considered a competitor to the corporation due to the fact that its main source of revenue, Walmart, decided to break its e-commerce contract with them.
The tactic of launching competing products under its own brand name, which is Amazon’s main strength, is not at all an invention of Amazon. However, now with the development of information technology, the accumulation of data from third-party sellers, and the unprecedented scale of concentration of capital in one corporation, this process has become easier and much more effective. Amazon has a strong network effect structure: more products lead to more users, which leads to more third party vendors, which again, offer more products. The main disadvantage that Amazon is currently experiencing is its aggressive management which has already brought several large-scale scandals for the company. Moreover, being the fastest in the online delivery race is so important to Amazon’s business that the corporation does not trust anyone to do the shipping and refuses to cooperate with its longtime delivery partners.
Failure to correctly assess the external environment often results in dire consequences for a firm. A good example of such a case is Subway – a fast-food franchise that has quickly conquered the world in the last 56 years. Subway failed to predict that its continuous expansion in the last 50 years would lead the business to an unpleasant situation. The overwhelming amount of shops have caused a collapse in sales. Many stores were too close to each other, generating strong competition inside the company.
Reference
Hitt, M. A., Ireland, R. D., & Hoskisson, R. E. (2017). Strategic management: Competitiveness & globalization: Concepts and cases. Cengage Learning.