Free Essay on Amazon.com Inc. Competitive Forces Analysis and Value Chain Models

Amazon.com Inc. is a leading company across the world and a trusted brand considering its business in e-commerce. Any new entrants into the market to operate in the e-commerce industry may use the laid groundwork by Amazon. However, it is challenging for new entrants to attain the same level as the scope of Amazon.com Inc. based on website visits from customers (Baburaj & Narayanan, 2016). The sheer influence and the website of the company allow it to deliver low-cost and high-quality services and products to their customers.

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Amazon.com Inc. business strategy

The Chief Executive Officer of Amazon.com Inc., eff Bezos, talked about the possibility of the company losing its influence in the ecommerce aspect. The statement explains why the company has adopted innovation and transformed their business strategy. Technological advancement is a key aspect that affects a business. Companies are compelled to adopt new technology to meet the needs of the ever-growing public needs. The company management understands that tech firms have a shorter lifespan compared to other business due to technological advancements. Therefore, the lack of innovativeness and failure to address the ever-increasing consumer demands impacts the firm negatively.

Amazon.com's expansion into Books, Video, Music, General Merchandise, Cloud Computing, and Devices markets

Amazon.com Inc. is perceived as pioneers and attained dominance across the ecommerce industry, particularly in the aspect of music, books, video, and general merchandise. The company has a 45 percent market share for the above-identified products and services. According to the 2018 data, the firm continues its dominance in music, books, and video markets by 80 percent (Zhu & Liu, 2018). The primary elements that led to the significant advantage for Amazon.com Inc. over the diverse markets include price offerings, range of products and services, and convenience elements. The company operates in a thin profit margin and has continued to innovate their business model. Further, Amazon.com Inc. adopts regular diversification that allows them to generate the best products and services for their customers.

Amazon.com Inc. five P’s

Amazon utilizes its marketing mix as a robust plan to attract potential customers to the ecommerce website. The five P’s of the company, including place, product, price, promotion, and profit involves a combination of approaches and tactics applied to execute their marketing approach (Thabit & Raewf, 2018). Amazon.com Inc reaches out to the online target market via the marketing mix. It concentrates on the price and place elements as primary selling points. Amazon.com Inc. provides a wide product selection such as retail service, Amazon Prime, retail goods, consumer electronics, video, Amazon Web Services, etc. (Zhu & Liu, 2018). the promotion aspect of its product mix aims at convincing customers to visit the company’s website. Amazon applies strategies such as sales promotions, advertising, direct marketing, and public relations. Underpricing component of the marketing mix, Amazon.com Inc. applies various approaches such as price discrimination, market-oriented, and value-based pricing approaches. The firm ensures that the marketing mix remains up to date in relation to the market trends. The focus on the five P’s allows it to attain organizational resilience while at the same time supporting innovation efforts for long-run competitive advantages in the online retail business.

Amazon.com Inc. success

From the technical viewpoint, it cannot be ruled out that after numerous years the business will continue to dominate the industry. Other emerging and expanding businesses have shown the potential to take the industry, such as Alibaba and Facebook. The strive to attain dominance across the globe relies upon how Amazon.com Inc. will focus on addressing and innovating its services to allow better and improved service to its customers. It is empirical that every company needs to always take into consideration data-driven solutions and consumer-based data to address the emerging threats of today’s modern digital world.

References

Baburaj, Y., & Narayanan, V. K. (2016). Five Forces Framework. DOI: 10.1057/978-1-349-94848-2_632-1 ·

Thabit, T., & Raewf, M. (2018). The evaluation of marketing mix elements: A case study. International Journal of Social Sciences & Educational Studies, 4(4). https://ssrn.com/abstract=3173274

Zhu, F., & Liu, Q. (2018). Competing with complementors: An empirical look at Amazon. com. Strategic management journal, 39(10), 2618-2642. Doi: 10.1002/smj.293