The rivalry in the online retail industry is very high. However, the brand has continued to grow its investment into innovation and research to provide the customers a better overall experience. However, challenges too abound and apart from the rising competition and regulatory pressures, there are other challenges in the way of Amazon’s growth. Example of ETOP Analysis Lets take the example of the environment analysis of Hindustan Aeronautics Limited (HAL) Variable Opportunity Threat Economic Infrastructural development is enhanced. Amazon is the worlds leading online retailer and its success has spurred other physical, brick, and mortar retailers to have an online presence. Technological factors are now more important in the context of international business than ever. In 2017 its expenditure on R&D was 22.6 Billion dollars. Amazon marketing strategy: Business case study, revenue model and culture of customer metrics: History of Amazon.com. Environment scanning is the process of gathering, analyzing and dispensing information for tactical or … However, challenges too abound and apart from the rising competition and regulatory pressures, there are other challenges in the way of Amazon’s growth. Walmart and Costco have also entered e-retail which has led to increase in the level of competitive rivalry among the existing brands. It helps the organization to identify opportunities and threats 2. However, due to intense competition from the likes of Google, the brand would like to remain careful about what products it is trying to build. Getting customer reviews. The preparation of ETOP involves dividing the environment into different sectors and then analyzing the impact of each sector on the organization. Michael Porter’s analysis regarding five important forces of business environment can be utilized on business operation of McDonald’s. Finding profitable products to sell. Net income during the same period rose to 3033 million dollars from 2371 million dollars. The SWOT/TOWS analysis report for this ecommerce business focuses on providing insightful details about the internal and external analysis of the company. The suppliers being very smaller in size as compared to Amazon are unable to dictate their terms and it is mostly the e-commerce brand that has the upper hand. Sony’s SWOT Analysis – Recommendations. Amazon, on the other hand, is known for its online shopping, quick deliveries, and a huge selection of items. Therefore, the SWOT analysis is a … A PESTEL analysis of Amazon inc.: Political forces are of utmost importance in the 21st century. This means that the company cannot lose sight of its local market conditions in the pursuit of its global strategy. Being the world’s leading online retailer, Amazon derives its strengths primarily from a three-pronged strategic thrust on cost leadership, differentiation, and focus. In 2017, its expenditure in marketing efforts was higher than 10 Billion dollars. ETOP is tool used for environmental analysis. project on consumer prefernce b/w nestle and cadbury ACKNOWLEDGEMENT I too would like to do it as I really wish to express my gratitude toward all those who have been helpful to me directly or indirectly during the development of this project. Its North America net sales in E-commerce were close to double the net sales of the brand internationally. Amazon … 213 and Merchandising, Fashion Shows, and Media and Marketing. Sustainability and environmental factors are now central to business and large businesses are devoting more and more resources to make their business and supply chains more sustainable. For Amazon, it’s not just these other giants that are giving it a tough time; many small-scale retailers, brands, and online stores are also fighting it for market share (Dudovskiy, 2016). It was founded by Jeff Bezos and is based at Seattle in Washington. The kind of growth that Amazon has achieved within a short period was not possible without having a few sources of competitive advantage. While the Americas are still its main market, the brand is also growing fast overseas. Secondly, traditional brands are also offering online sales giving further competition to these online retailers. ; Experienced founders: The Founders of Flipkart, Sachin & Binny bansal are Ex-Amazon employees. In this way, it caters to a very large range of customers’ needs worldwide. Apart from taxes, there are several areas in which a large web of laws is frequently troubling international businesses. o AAFREEN AHMED o ABHINAB MISHRA. PESTEL is an acronym for political, economic, social, technological, environmental and legal. Further, this would improve the companys margins as it lets it reap the advantages of using its own payment gateway. Its uses targeted online marketing channels, like its sponsored search, Associates program, social and online advertising, television advertising, and other initiatives to direct consumers to its websites and increase sales and retention. These forces are known as PESTEL forces. A PESTEL Analysis of Amazon. It has interests in communications and information technology, engineering, materials, services, chemicals. In several categories including fashion and music Amazon has become the most favourite destination for the shoppers. A competitive analysis is the analysis of your competitors and how your business compares. Releasing new products like its Alexa can help the brand achieve faster growth. Amazon has maintained a very large customer base of loyal customers. ETOP Preparation: The preparation of ETOP involves dividing the environment into different sectors and then analyzing the impact of each sector on the organization. The following strengths support the success and continuousgrowth of Amazon: 1. We invest deep in order to bring you insightful research which can add tangible value to your business or academic goals, at such affordable pricing. Businesses operating in an international environment are subject to several pressures that can be economic, political, social or technological in nature. This is a detailed SWOT analysis of Amazon. From labor to product/service quality and environment, there are several laws that the companies have to care for because non compliance in all these areas results in very large fines and financial losses. Similar analysis has also been done for the competitors of the company belonging to the same category, sector or industry. The product range has continued to grow based on the increasing number of third party sellers from all over the world. Apart from eBay and Flipkart, Alibaba is also adding to the intensity of competition. EU has taken action against several of the large businesses and slapped major fines on some of them in the last few years. E-commerce giants like Amazon uses demographic & psychographic segmentation to segment the markets. Important resources and capabilities of Amazon: Brand image and equity: Amazon’s customer focused rand image is a major source of competitive advantage for the brand. But there’s also Amazon, Hulu, HBO, and YouTube to worry about. At the centre of Amazon’s business strategy is customer convenience. Amazon segmentation, targeting and positioning. The preparation of ETOP involves dividing the environment into different sectors and then analyzing the impact of each sector on the organization. Amazon also maintains heavy focus on marketing and sales. Strengths of Amazon. ETOP ANALYSIS Political factors : Legal factors : Political system. The SWOT analysis method is the situation analysis method. It is because of the growing role of technology in terms of sales, marketing and customer service. Investment in research and development has also continued to aid the growth of Amazon Web Services. The brand is also growing through acquisitions and continuously investing in technology to change the face of the retail game. All this investment is meaningful because apart from bringing down the carbon footprint of the brand, it helps it minimise wastage, save resources as well as cut down costs and create a green and happy ecosystem. Shopping. People are looking for an alternative to the long lines, the lack of employee help, and crammed stores. In 2017, Amazon was hit by a fine of 250 million Euros in back taxes. From technology to human resources and marketing, there is a very large investment in all these areas. According to CNN.com the U.S e commerce … In 2019, the company earned US$141.247 billion from online sales of its own merchandise and an additional US$53.762 billion from the commissions of the third party sellers’ sales in its online stores. A recommendation is to expand thecompany’s operations into developing markets, which present rapid economicdevelopment and high e-commerce growth potential. Though it started as an online bookstore, its success in its venture spurred it to diversify into selling anything that can be sold online. – Amazon must focus on increasing profit margins by releasing more of its own products. ETOP 2. Technology is a major source of competitive advantage for an e-commerce brand in the modern era. Apart from that in other parts of the world too retail and retail brands like Flipkart and Alibaba are competing with Amazon. Sociocultural factors affect marketing strategies since ads that are more suited to the local culture and society are more successful at connecting with the local customers. Sociocultural factors too have acquired a major role in the context of business. This PESTEL/PESTLE analysis of Amazon identifies key issues thatare critical to the company’s long-term success. Jeff Bezos and his organization have found a way to optimize nearly every piece of the supply chain puzzle – from warehousing and inventory management to delivery times and prices. Updated: 01 Oct 2020, 04:52 PM IST Suneera Tandon. Competition both in Cloud services and e-retail is a major threat for the brand and it has kept intensifying. Protecting against “black hat” tactics, counterfeiters, and other risks. For example, its Q4 2020 earnings of $125.6 billion soared past the $119.7 billion Wall Street forecast: for that period, the company saw a 42% increase in earnings (Motley Fool, 2021).These gains come at the tail of a $4 billion expenditure for coronavirus measures (The Guardian, 2020). No mental shift required. img. Amazon can increase the portfolio of its offerings wherein it stocks more products than the norm currently which places it in a position of strength and comfort as this can translate into higher revenues. Amazon has its task cut out as far as its future strategies are concerned and this SWOT Analysis can provide a guide and a roadmap that the company can implement going forward. HISTORY Tata Group is an Indian multinational conglomerate company headquartered in the Bombay House in Mumbai, India. The competition is fierce. The website sells hundreds of millions of unique products. Its introduction of Amazon prime has also proved to be highly effective in terms of attraction and retention of customers. In this way, it caters to a very large range of customers’ needs worldwide. These … In this era of heavy competition, brands cannot be successful without having a strong business strategy and more than one sources of sustainable competitive advantage. Environmental Threat and Opportunity Profile (Etop) Download now. India’s Largest E-commerce Retailer: Flipkart is the India’s largest E-commerce company & had sold GMV (gross merchandising value) of $1 billion till now. Its total assets were worth 131 Billion dollars in 2017. Amazon has different websites for different markets that cater to the local customers. Cash On Delivery The brand has seen global success by being the most customer focused e-commerce brand. Amazon is the trading name of Amazon.com, Inc. Its journey began in 1994. Alexa enabled devices are the best selling across entire Amazon and 2017 had brought more good news for the retail giant. Strongbrand 2. In addition to industry-leading price performance for analytics services, S3 intelligent tiering saves customers up to 70% on storage cost for data stored in your data lake, and Amazon EC2 provides access to an industry leading choice of over 200 instance types, up to 100Gbps network bandwidth, and the ability to choose between on-demand, reserved, and spot instances. SWOT analysis of Amazon analyses the brand/company with its strengths, weaknesses, opportunities & threats. Investing in technology is key to faster growth, enter consumer experience as well as a better brand image. Amazon is the world’s largest online retailer and is indeed a pioneer in the online retailing space. The brand uses several channels to attract customers. Amazon has maintained a strong focus on innovation so as to provide its consumers with the best experience. Cart All. 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