Strategic Position Analysis Of Amazon In Singapore | SWOT Analysis

Market Description of Amazon Company

Discuss about the Prescriptive Theory of Dynamic Capabilities.

Amazon Inc is positioned as one of the largest global online retailers. It supplies a wide variety of merchandise such as the books, electronics and apparels through its website (Dyer et al. 2015). The company also operates through its international websites. Classification of the company’s business segments includes North America, International alone with through Amazon Web Services. Amazon has its business operations in Europe, Asia and North America and has it’s headquarter in Seattle. The company has observed revenue of US$135,987 million in the year 2016 and it also observed a decrease by 18.4% in 2017 in comparison to the previous year (Phx.corporate-ir.net. 2018).

The objective of this report is to analyze the strategic position of Amazon. Considering the same SWOT analysis will be carried out that will facilitate in analyzing the strengths and opportunities of the company in attaining competitive advantages. Moreover, threats and weaknesses of the company will also be revealed that can facilitate in addressing its major issues. Based on such analysis certain significant recommendations will also be offered regarding its new product description, target market, consumer value proposition and choice justification of new product.

Market description of Amazon Company will focus on the consumer electronics market within the selected nation (Singapore) (Fitzroy, Hulbert and O’Shannassy 2016). The market description of consumer electronics market includes considering market size, market leaders, market concentration, distribution & industry growth. The consumer electronics within Singapore is observed to have huge market size with including portable, in-home and in-car consumer electronics products market at a national level. The industry is observed to give leading consumers and brands that impacts the market with their new products development, distribution or pricing concerns. However, the industry growth of consumer electronics in Singapore is observed to become a bit slow (Hill, Jones and Schilling 2014). This is because the volume of sales of consumer electronics in the nation is observed to drop in the year 2017.

Additionally, consumer electronics segment such as mart wearables, analogue activity watches, and OLED televisions along with wireless speakers indicated high volume gains and contoured to attain increased consumer interest. The products that are covered in the Singapore electronics market includes peripherals and computers, digital cameras, in-car entertainment, portable consumer electronics, in-home consumer electronics and Tablets by OS (Hubbard, Rice and Galvin 2014). Integration combined with effective aesthetics is the driving forces within the luxury market. Luxury mobile phones, mp3 players along with electronic wearies segments are there in the consumer electronics markets. Within the luxury electronic industry the leaders are observed to companies like Apple, Samsung and Huawai that offers superior and highly competitive consumer electronics within the market. Market concentration in the Singapore electronics industry is now shifting towards offering Wi-Fi, MP3 playback and movie play, web surfing that is readily available within the electronics goods market. Distribution through internet detailing is deemed to be the fastest trowing channel that offers great a huge potential because of its high convenience to the consumers (Irani 2015).

SWOT Analysis of Amazon Company

Several companies are entering the electric goods market of Singapore and many new products launch is deemed to be lined up in future. For instance, TAG Heuer is the biggest entry within the consumer electronic market as it has positioned itself to be the first Swiss watch manufacturer that has launched a smart watch with the introduction of connected TAG Heuer. Market concentration of the electronic goods sector in Australia is focussed on introducing and distributing new consumer electronic goods to attain high industry growth (Lasserre 2017). The smart watches offered by the leading companies in Singapore are observed to offer stainless steel frame, large display along with operation within the Android wear platform. One major example of developing distributing channels in the Singapore consumer market is Michael Kars (Ritala, Golnam and Wegmann 2014). Collaborative distribution systems are also observed to get common in the industry that is building increased brand exposure. A major collaborate distribution within the industry took place between Apple and Hermes for developing luxury leather brands for Apple watches. This resulted in increased demand for new product development in Aitkin consumer electronics market for maintaining competitive edge (Loaiza et al. 2017).

SWOT Analysis of Amazon Company is conducted in the table below that has explained the company’s strengths, weaknesses, opportunities and threats in the industry. Moreover, threats and weaknesses of the company will also be revealed that can facilitate in addressing its major issues (Kew and Stredwick 2017).

Strengths ·       Strong background and good financial performance ·       Highly consumer centric ·       Cost leadership strategy ·       Effective network of delivery ·       Profitable GLOCAL Strategy ·       Successful acquisitions	Weaknesses ·       Decreasing profit margins ·       Issue of tax avoidance ·       Increased debt ·       Product innovation failure
Opportunities ·       Strategy of backward integration ·       Increased chances of acquisitions in new market ·       International expansion ·       Opening physical stores outside the US market	Threats ·       Low entry barriers within the industry ·       Increasing local competition ·       Strict government regulations

Amazon is positioned as among the top online book stores that converted into a top online retailer all through the world and recently is facing a tough competition. The company is observed to have a strong loyal consumer base that repeatedly purchases the online retailer (Pisano 2017). In order to analyze the position of the company within the industry, SWOT Analysis is carried out below:

• Strengths: Amazon is observed to have strong background that builds in its success with books. The company has attained expanded product categories that encompass toys, electronics, home and kitchen, games along with white and brown goods. The company has also turned out to be an e-commerce giant over the past decades. In order to differentiate itself through offering strategic alliances with other organizations to provide better consumer service (Ritala, Golnam and Wegmann 2014). With its strategic partners and because of Amazon’s fulfillment centres, the company has generated a deep along with structured distribution network for making the product available within the remote locations. The company’s CRM has generated consumer processes for carefully recording information regarding consumer purchasing behavior.
• Weaknesses: Because of wide network of delivery along wit price wars, Amazon margins are observed to be decreasing that is resulting in high losses. In India, the company has lost more than $359 in the year 2014 (Rothaermel 2015). The company also introduced fire phone in US that turned out to be a large product failure. At the same time, Kindle fire did not succeed as profoundly as Kindle did. The company has also attained negative publicity in the areas of tax avoidance in nations like UK and US (Ritala, Golnam and Wegmann 2014). Most of the company’s revenue is attuned from these established markets.
• Opportunities: Through backward integration, Amazon can introduce its in-house brands within distinct product categories. The company can also differentiate its products that can facilitate it in attaining increased profits in the e-commerce sector (Tjemkes, Vos and Burgers 2017). Expansion within the Asian and developing economies can facilitate the company as these are the markets with low competition within e-commerce sector and are less saturated like developed economies. Opening more physical stores outside US can facilitate Amazon Company in supporting its consumers to get involve with its brand that can result in increased repeat purchases and boost in loyal consumer base. Through acquiring the e-commerce organizations Amazon can decrease its competition level and can use other companies’ specialised capability (Zhu and Liu 2016).
• Threats: Low entry barriers faced by Amazon can affect the recent player’s business as an increasing number of companies are emerging as a tough competition. This is resulting in price wars, decreasing margins along with losses those results to questioning the sustainability of the businesses. Government regulations are another threat as not having clarity regarding concerns associated with FDI within multinational retail can hamper the success of e-commerce companies in several developing nations (Sarbah and Otu-Nyarko 2014). Local completion from the established brands like Flip cart and Snap deal are taking away major market shares. There are also many local players that grabs market share of Amazon and it becomes difficult for the company to attain huge profits.

The new products that will be launched by Amazon in the Singapore market include new gadgets those do not cost more than $150. It most considers launching quirky Echo Buttons that has cost of $20 per year. Other new product launch that must be considered by the company includes Echo Connect Landline and Fire TV that is 4K enabled (Fitzroy, Hulbert and O’Shannassy 2016). The company must successfully launch a new private level product on the company’s website. These products can include organic goods that are highly in demand with the Singapore market. Product innovations must also be focused on hardware and new services that can include launching Kindle e-readers, Fire tablet and Amazon fashion with the service of unlimited free shipping (Ritala, Golnam and Wegmann 2014).

New Product Launches of Amazon in Singapore

Target market of Amazon in Singapore are the people those have access to the internet along with having financial paying tools including debit card, credit card and PayPal. The company’s consumers belong to various consumer segments within the nation. The company must grab attention of its target consumers those are those consider shopping their products through online medium (Fitzroy, Hulbert and O’Shannassy 2016). Moreover, the company’s prime program must be focused on appealing to its old shoppers in comparison to the young shoppers. This target mart must be selected by Amazon for the reason that data exist regarding the fact that consumers above the of 40 years tends to remain loyal to the services of any company in comparison to the people belonging to the age group of 40 years (Hill, Jones and Schilling 2014).

Consumer value proposition strategies of Amazon must be focused on consumer usage along with engagement trends that can maintain the company’s competitive positioning over time. Focusing on the products and services engagement with time the company is recommended to encompass portraits of Amazon shopper with encompassing segmented subscription (Kew and Stredwick 2017). Increased attention must be provided to the Amazon Prime as it can result in increasing engagement and sales. With consideration to the online grocery purchasing trends a better online and in-store purchasing channel must be developed by Amazon that can result in better usage of Amazon survives by consumers. Such services include Amazon Fresh, prime pantry, whole foods acquisition along with subscribes and save that can offer a great value to its consumers (Hill, Jones and Schilling 2014).

Based on the demands and trends in the Singapore market, Amazon is recommended to launch for addressing the needs of its target consumer base. Second generation of Echo speaker of Amazon will have modified features (Ritala, Golnam and Wegmann 2014). It will offer exceptional value to all its consumers in the new market as it will have certain exceptional features such as being wireless, web search options, create to-do and shopping lists, obtaining instant weather reports along with having the ability to control all the popular smart phone products (Kew and Stredwick 2017).

Conclusion

The objective of this report is to analyze the strategic position of Amazon. Considering the same SWOT analysis will be carried out that will facilitate in analyzing the strengths and opportunities of the company in attaining competitive advantages. It is also revealed that Amazon is positioned as among the top online bookstores that converted into a top online retailer all through the world and recently is facing a tough competition. The company is observed to have a strong loyal consumer base that repeatedly purchases the online retailer. It is gathered from the report that consumer electronics segment such as smart wearables, analogue activity watches, and OLED televisions along with wireless speakers indicated high volume gains and contoured to attain increased consumer interest.

References

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Rothaermel, F.T., 2015. Strategic management. McGraw-Hill Education.

Sarbah, A. and Otu-Nyarko, D., 2014. An Overview of the Design School of Strategic Management (Strategy Formulation as a Process of Conception). Open Journal of Business and Management, 2(03), p.231.

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Zhu, F. and Liu, Q., 2016. Competing with complementors: An empirical look at amazon. com.