Key strength: The steady growth in net sales since 2012 from the US $61.093 million to the US $135.987 million (Amazon.com, 2016).
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Key weakness: The lack of an accurate forecasting system; the company implements fixed amounts of expense and investments which may hinder a timely adjustment to environmental changes, e.g., decrease in sales and customer loyalty (Amazon.com, 2016).
Key opportunity: Established partnerships with such enterprises as America Online, Yahoo!, Excite, Netscape, AltaVista, @Home, etc. (Amazon.com, 2016).
Key threat: The level of competition is always intensive and continuously growing (Amazon.com, 2016).
Competition in the e-Commerce and Online Auctions industry
PESTEL: Technology is one of the major forces driving competition in e-commerce. This functional area comprises operations about digital content management, infrastructure management, computing services, order management, etc. (Killen, 2014). To keep up with the pace of advancement and ensure excellent information safety (e.g., confidentiality, reduced information distortion and loss, etc.), companies should constantly invest in technology.
Porter’s Five Forces: Rivalry. Intense rivalry triggers competition in the industry. The major of Amazon’s rivals include Alibaba, eBay, ASOS, and so on. Since many of these companies offer similar items, to maintain the leading position, the company should use smart pricing and marketing strategies, product diversification, etc. to attract new buyers.
Amazon has more strengths than weaknesses. First of all, the high level of competitiveness is supported by the low-price strategy. Secondly, the implementation of customer-oriented policies played a crucial role in Amazon’s development. The company invests in the improvement of customer services and marketing which largely contributes to the company’s success and profitability.
Amazon’s current opportunities outweigh the risks. It has a high profitability level and a vast profile of business partners. Moreover, the company uses smart market entry strategies (e.g., alliances, licensing) to mitigate the legal and financial risks due to operating in unfamiliar distant markets such as China or India.
According to IBISWorld’s Shopping Mall Management market research report (2017), there has been a decline in buyer traffic in the shopping mall market due to the growth of e-commerce. For several years, the major Macy’s strategic priorities were the attraction and retention of talents and aggressive pricing, yet the company fails to adjust to the shift in customers’ preferences and continues to promote the same old vision. Since nowadays e-commerce becomes dominant, a more innovative approach is required to revive the offline retailing. For instance, Loeb (2016) recommends arranging fashion shows and using space innovatively.
Comparing to Macy’s, Target aims to expand the customer base by diversifying the product range and improving branding. At the same time, the company’s management doubled down on the core Target’s departments and products such as fashion and furniture which is considered to be the mall’s distinctive (Halzack, 2015). It means that Target recognizes customer preferences and interests and improves the marketing processes including analysis of customer needs and feedback. Additionally, Target has introduced effective pricing and shipping policies for the online business which helped to increase profits by over 30% (Halzack, 2015).
Organizational culture can be defined as a set of values, behavioral norms, and goals shared by staff members. Since corporate culture is an intangible asset, it can be managed through such practices as knowledge management, communication, value creation, etc. Communication may be considered one of the main success factors in organizational culture management. Through the establishment of open communication with subordinates, managers may increase team cohesion by introducing high standards of conduct, professionalism, and ethical values (Negin, 2013). Whereas the lack of efficient communication patterns within the organization may hinder organizational growth, employee productivity, and dissemination of important information.
There is no chance to convey organizational values, mission, vision, and other intangible and psychological elements of organizational performance without communication. Thus, it may be regarded as a means of strategic control. Not only communication allows the improvement of corporate culture but also encourages employees’ commitment to service improvement and overall business excellence.
Amazon.com. (2016). Annual report. Web.
Halzack, S. (2015). Business after a major rough patch, Target looks to be in the early stages of a turnaround. The Washington Post. Web.
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Killen, O. (2014). Three important trends impacting the ecommerce technology market. Econsultancy. Web.
Loeb, W. (2016). Macy’s fights for survival as store productivity declines. Forbes. Web.
Negin, M. (2013). Study the relationship between managers’ communication skills and staffs organizational Commitment. Interdisciplinary Journal of Contemporary Research in Business, 5(5), 198.
Shopping Mall Management market research report. (2017). Web.