The current market has really evolved to become global market that people from all corners of the earth can trade as if they were trading face to face. The situation has been made possible through the globalizing business such that clients can access his/her desired products from their desired stores at their local towns or even have the product delivered to their doorstep. Venturing into such a developed market requires a detailed SWOT analysis that brings out the internal capabilities, external opportunities as well as the weakness and threats. This helps in planning for a particular market venture as it shows the facts of the business position. The case is not different from Amazon that is also operating in India. Amazon has of late made great progress in acquiring a Middle East website known as Souq.com. This has made it extend its tentacles into the Indian economy. Amazon deals with a wide range of product, from books to electronics to clothing just to mention a few. This paper will focus on the SWOT analysis and analyze the business using the same, based on a product that it aims to release in the market (Euromonitor, 2017).
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Strength Ø Low-cost structure Ø A wide selection of stock keeping units Ø Third party sellers arrangement Ø Synergy of the key business areas Like online store Ø Low prices on products Ø Free shipping Ø Good customer relations Ø A huge global brand that is well recognized Ø Makes good profits Ø Great competitive edge through information technology |
Opportunities Ø Expansion into new brands e.g. Marks and Spencer Ø Building of collaboration with the public sector e.g. the plan to deal with the British Library Ø Acquiring of new selling platforms e.g. Joto.com in China and Souq.com in the Middle East. Ø Online payments platforms Ø Production of product under its brand name Ø The availability of different kind of products in the store |
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Weaknesses Ø The free shipping strategy Ø Dealing with too many products at once Ø The autonomous focus on online selling platform Ø Near zero margin business model |
Threats Ø A lot of competition from upcoming retail business websites Ø Threat of strategic alliance by competitors in oversea markets Ø The element of seasonality purchases the highs and lows of business Ø Identity theft and hacking of the website confusing customers Ø Lawsuits from publishers and rivals due to aggressive pricing strategies |
India has one of the largest electronic market in the world totaling up to US$400 billion and is expected to grow at a compounded annual rate of 24.4%. India produces electronic hardware goods that are projected to reach US$ 104 billion in 2020. Among this, electronic goods is the broadcasting equipment that constitute about thirty one percent of the total electronic market. This is the highest share followed by consumer electronics. The growth in the electronic industry has been greatly attributed to the growth of customer base and the increased penetration of durable products in the Indian electronic sector. India has also been known to export electronic products worth US$ 8.3 billion. (Awan, 2014).
The Indian electronic market is served by five industries. This industries include, the tablet, mobile phones and GPS manufacturing industry, the LED manufacturing industry, that manufacture about 80% of the bulbs used in India, the screen manufacturing, and assembly industry, the solar power generation instruments manufacturing industry, and the smart meters industry (Awan, 2014).
Currently, the Indian market is dominated by Croma which deals with consumer electronics and durables. The store is promoted by infinity retail Ltd, a company that is 100% subsidiary of TATA. The second bestselling electronics company in India is NEXT which deals with consumer electronics, home appliance, IT, imaging accessory and customer durables. This company is a multi-product retailer.
The third best performing dealer is Reliance digital, which deals with household electronics, appliances gaming, computers and telecom products (Emerging-markets-research.hktdc, 2017).
The Indian electronic market is witnessing a strong growth due to increase in disposable income. The income is estimated to be increasing at a rate of 12.3%. The electronic industry is littered with many manufacturers that have stiffened the competition thus forcing the manufacturers to lower product prices. Consumers are now spending less on higher tech products. The government of India has contributed to the electronic industry by setting up an electronic hardware technology to encourage foreign direct investment into this industry. Moreover, it has provided the modified special incentive package that is injecting US$ 1.7 billion in benefits to the electronic sector for the next five years (El-Din, 2017).
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Strengths Ø The market has a large population Ø The majority of the population is the young generation Ø The country is now engaged in manufacturing of electronic devices such as phones Ø The continued awareness of the use of electronic devices to make work easier Ø The success of other electric appliance and devices in the same market shows that also the new product will be supported. |
Ø Opportunities Ø The government has introduced an incentive package to the electronic manufacturing sector. Ø The setup of an electronic hardware technology to aid research and development in the electronic industry Ø Amazon is a big brand and well recognized Ø The smart bag to be introduced by Amazon has more functions, and currently, India is not manufacturing such. Ø The population is big in the country thus the labor force required to market the product is readily available |
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Weaknesses The market consumption is dependable on necessity. The electronic products manufactured in the country are not of highly quality compared to those found on Amazon. The locally manufactured are costly despite the subsidies |
Threats Ø The Indian currency is currently performing poorly against the dollar Ø There are many established electronic dealers in the Indian market. Ø With the penetration of electronic products from China, there is a threat |
According to the SWOT analysis conducted, it is clear that the strength out do the weaknesses and so does the opportunities to threats. This shows that the product has a great chance of performing well once it is introduced to the Indian market. The conclusion is based on the findings from the analysis.
The move by the Government to finance the electronic industrial sector, gives the Amazon company good business due to its reputation in dealing with quality and high-end products. Moreover, the availability of labor force ensures that product-marketing activities will not be costly. Also, the Indian population consumes electronic products based on its necessity. Therefore, the smart bag will attract many customers due to the benefits it provides. Moreover, it is an opportunity to start a manufacturing plant in India as it will reduce the cost as well as help take advantage of the available subsidies provided by the government (Adham, 2017). Moreover, manufacturing the product and branding it with the Amazon logo will skyrocket its sales
The product targets the entire Indian population, which according to the survey has embraced the use of smart phone in a significant way. However, more production emphasis will be put on women handbags as well as office bags. Working class women will be the most viable market segment, as women like to purchase many handbags to ensure that all the colors have been catered for. Coupled with the benefits that the product delivers, the limitation on profits from this segment is only the sky. The office and touring bags segment is also considered due to the nature of the situation, which requires charging the handset especially while travelling (Söllner and Rese, 2014. P25).
The smart bag is a bag that allows the consumers to enjoy uninterrupted communication on their handset devices either the tablet or smartphone. For once, one will be able to use his/her phone at its full operational capacity without fear of lack of a power source regardless of where one is. The bag is designed in a way that it can be used to charge your device while you are communicating and at the same time walking. The bag has an inbuilt high quality and non-explosive power bank with a capacity of 15,000mah. Moreover, the bag is made from durable leather, which ensures that the bag is long lasting while at the same time attractive and stylish. Also, the bag is made of a water resistant material and can be rained on without any water penetration into the bag. The careful consideration in the choice of material and design serves to ensure that the power bank is not exposed to any moisture as this will damage the charging system.
The customization of the bag ensures that the customer acquires a stylish and attractive product. Apart from this, the high-quality leather material used, coupled with the affordable price of the bag will leave the consumer yearning for more of the product; this will not only impress the customer but will create more referrals for the future. This bag is one of a kind bag that gives the consumer more than just the value of their money. The trendy bag will also give the Indian consumer the opportunity to own it as it will be manufactured in India and marked with the logo of a giant brand, Amazon (Yau, 2015).
The smart bag is a new revolutionized bag that will deliver total satisfaction to the customer. Amazon being the first provider of this bag into the Indian market gives the company a head start as there is no other company dealing with such type of a product. Moreover, the government has announced that it will thwart efforts to import fake products thus ensuring that the domestic market is well safeguarded. Besides all this, there is no other competitor in the same field. Finally branding the product with the Amazon logo will attract huge sales due to the worldwide popularity of the brand. The main strategy here is to manufacture a product that is owned by Amazon with Amazon’s logo (Gordon, 2012).
Conclusion
The SWOT analysis tool has benefited the Amazon organization in that it has established the areas that it’s good at as well as the areas that require improvement. From this study it is recommendable to conduct analysis on the market for it enables making of informed decisions when venturing in new markets.
References
Adham, E. 2017. Amazon to Acquire the Middle Eastern E-Commerce Site Souq.com. [online] Indian Streets. viewed 6 Apr. 2017 <https://Indianstreets amazon-to-acquire-the-middle-eastern-e-commerce-site-souq-com>
Awan, M. 2014. International Market Segmentation: Exploring Cell Phone Market of Young Adults. International Journal of Trade, Economics and Finance, 5(2), pp.151-154. (Awan, 2014, p151)
Euromonitor. 2017. Consumer Electronics in India. viewed 6 Apr. 2017] <https://www.euromonitor.com/consumer-electronics-in-India/report>
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< https://emerging-markets-research.hktdc.com/business-news/article/Middle-East/India-Market-Profile>
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