Amazon Company Analysis

Amazon.com (Consumer Electronics)

Strategic Analysis

Prepared by:

Neal Adams

Alex Baker

Emily Evans

Caroline Greenlee

Maureen McCafferty

Zac Thiessen

In Partial Fulfillment

Of the Requirements for

MANGT 595: Business Strategy

MoWeFr 1:30 pm

10-23-2015

Table of Contents

Executive Summary

Introduction

Company Overview

Amazon is the leading online retailer and operates in 10 countries. They are headquarter in Seattle, Washington, and since their inception in 1997, they have grown from a small online book store to the online retail giant they are today. There revenue has consistently increased over the past 10 years, reaching $281.3 billion. Also, Amazon has branched out to include a plethora of different product they produce and sell, but their real talent is their distribution. Although, they there distribution is king these skills are not fully transferable to their consumer electronics side of the business, because of this there consumer electronics have mostly fallen flat compared to their competitors.^[b]

Issue Statement

Amazon’s recent ventures into the consumer electronics market through their fire brand has mostly led to poor performance. The market they have chosen to enter is highly competitive, and it require a significant amount of capital to start up. But, the main issue they are facing with their electronics is they has not focused on what the customer wants, which has had detrimental effects^[c]. This report will examine actions Amazon could take to correct their performance in their consumer electronics.

External Analysis

>>Rewrite/expand with focus on Amazon’s consumer electronics (e.g. fire phone, tablet, echo, etc.) – It’s good to mention the fact that Amazon has a focus in e-commerce in general, but in this case we are looking at competitors like Samsung, Apple, and a very high tech industry with a different set of challenges –MM, ZT

Industry Overview

Amazon is a part of the E-Commerce & Online Auctions industry^[d]. This industry is comprised of companies that sell merchandise online where the internet is the primary selling platform for items from either online stores or auction sites. Currently it is in the growth stage of the life cycle. There is a consistent introduction of products and brands to the market, rapid technological changes occurring, and new companies being created, signifying the continued growth of the industry. Revenue has consistently increased over the past 10 years, reaching $281.3 billion this year, an 11.6% increase from 2014. Annual growth from 2015-2020 is expected to continue increasing by 13.4% (Carter, 2015). Barriers to entry are low, making this an attractive area for potential new entrants, but competition is high and it can be challenging for entrants to have unique products and keep up with the high technology changes. The majority of products and services focused on are: computer hardware, clothing, footwear and accessories, furniture and home appliances, and medication and cosmetics. These are the primary items that make up and service segmentation.