Amazon Strategic Plan

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Amazon Strategic Plan http://www.scribd.com/doc/24854038/Amazon-Strategic-Plan
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environmental telecom
policies
The
between
credit
technological, environmental
factors which on
2006
squeeze
liberalization,
will
and e-retailing
andorganisations
affect
legal 2011
andasthewith
opposed
environmentse-commerce
housing
sales
attovarious
rising
mightslump
heavyover
promotion
has an
influence
levels. It is and
organisation
important access
reliable
markets
entering
to
(Johnsonand
internet
through
India
increase
and
access
in for
legislation
reduced
100%.
industries
This
consumer
(Kobrin
(Held
growthetS,al.,
is
spending
2001)
fuelled
1999) byin the
the USA.
numberHowever,
of on- internet users
national
acquisitions
developingusers
the Chinese
consider
et al, P65).
the potential impact
consumer
line ofspending
householdsthe external
in theis US,factors
rising
which onhas
in Chinatheincreased
individual
and India dueorganisations (Johnson
by market.
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et al, 2006, P65). to high

85% economic
since growth in bothInternational
2000. (Euromonitor countries. (The
from
national statistics)
will have an annual disposable income exceeding for Amazon.com.

US$5,000. 143 million of these will be in Asia-
Pacific. Second only to Western Europe with 185
million. (Euromonitor International from national
statistics)
Social Increase in online social networking (e-Marketer Marketing needs to take

online, 2008) advantage of this new
channel
Product category risk and financial risk decrease Need to consider

online shopping (Sorce et al, 2005) overcoming risks to
increase users.
Growth of internet from 2002 to 2007 is 244.7%. Opportunity to increase

18.9% of world population use the internet market share.
(Internet World Stats, 2007)
Technological There is an increase in broadcasting, information Increased frequency of use

and telecommunications technologies for internetaccess and sources (e.g. mobile
devices, TV etc) for
internet access by online
shoppers
Rapid development of ‘high-speed’ network services Media-rich contents are

(e.g. broadband) increases usability of media-rich easily made available to
applications online shoppers
Environmental Global Warming/ Pollution Awareness Less car journeys, more

shopping online. (Matthews
et al, 2001)
Have to become more “green” to attract consumers Changing business

methods and environment
to become more “green”,
i.e. with postage and
packaging, work
environment.
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et al, 2000).
The Electronic Signatures Law: China's First Removes legal obstacles

National E-Commerce Legislation
Summary of PESTEL
Political, economic, social, technological progress indicates an increasing and attractive market
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to be exploited by Amazon.com. The Chinese and Indian markets have shown exceptional and provides a more
secure and transparent
growth. The use of internet as a social networking channel has created new opportunities
legal to be
environment (Yan,
2005).
exploited. Additionally, as environmental awareness increases globally (Stern et al, 2006) it is
Increased use of e-
important that Amazon.com’s strategy support environmentally friendly activities. Thecommerce
global for both
nature of Amazon.com’s activities also suggests that strategies developed should comply with and businesses
consumers
(Yan, 2005).
the different legal obligations internationally.
2.1.2 Industry and competitor analysis
The analysis on industry and competitor environment is important for organisations, because it
Porters Five Forces in the E-Retailing Industry
Porter’s Five Forces analysis is used to assess the attractiveness of different industries, and
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is useful for
therefore, it can
managers
help into
illustrating
understandthethe
sources
competitive
of competition
forces acting
in a particular
on and between
industrythe
(Johnson
organisations
et al, 2006, p78).
in the same industry (Johnson et al., 2006, p77).
Power of suppliers
Low – For standardised products that are easily available supplier power will be low
(12manage, 2008)
High - Specialised products and brands increase switching costs for buyers so the
suppliers have higher power. With Amazon products such as the Harry Potter books are
exclusive from publisher (Johnson et al, 2006)
High - Online shops making it easier for publishers/ brands to sell directly to consumers
without a third party (e.g. Blackwell’s), suppliers may not need Amazon (Johnson et al,
2006)
High – If there is a concentration of suppliers for certain products in the industry rather
than fragmented (Johnson et al, 2006)
Low - Global shipping has increased the amount of suppliers available (Bennett, 2007)
Threat of Substitutes Threat of new entrants

High - Physical stores and touch, feel, Competitive Rivalry Low – For online established retailers a
hear factors (Ward, 2001) High – As search engines are becoming strong brand image generates consumer
High - Renting products online instead the first choice for consumers when trust (Johnson et al, 2006)
of buying them is increasing in Low - Economies of scale – Retailers that
have refined technology and processes and
High – There is an increasing amount of

dotcom companies due to the little
Low - Strong experience in the online

High – The internet is a “Global retail industry gives e-retailers advantages
Market”, consumers can substitute any in terms of cost and customer loyalty
High - Capital requirement entry is a low
for online businesses’ as cost of lease
premises is minimal (Wiley et al, 2001)
Low – Catalogue/mail order although
not as popular still a substitute to online
Power of buyer
buying (Bennett, 2007)
High – There is a large variety of online shops
and comparison websites to compare best prices
(McGrath and Heiens, 2003)
Figure 3: Porter's five forces
Summary of key findings from Porter’s Five Forces
• The competitive rivalry amongst the e-retailing industry is intense. From some of the
• The threat of new entrants that are able to compete directly with Amazon.com is low
• The strong brand image of Amazon.com should be an advantage in any price wars
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d l titb Thi hi i fj fi h it li d lid t t G

t Sl Thi
ll i h bl t b i b lk ff th l t
largest to the smallest companies, dotcom businesses are abundant, making
competition intense. Amazon.com competes directly with big firms such as Barnes and
Noble and Ebay.
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Amazon Strategic Plan http://www.scribd.

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et al, 2006, P65). to high

will have an annual disposable income exceeding for Amazon.com.

Social Increase in online social networking (e-Marketer Marketing needs to take

Product category risk and financial risk decrease Need to consider

Growth of internet from 2002 to 2007 is 244.7%. Opportunity to increase

Technological There is an increase in broadcasting, information Increased frequency of use

Rapid development of ‘high-speed’ network services Media-rich contents are

Environmental Global Warming/ Pollution Awareness Less car journeys, more

Have to become more “green” to attract consumers Changing business

ment for Free

The Electronic Signatures Law: China's First Removes legal obstacles

ment for Free

2.1.2 Industry and competitor analysis

Porters Five Forces in the E-Retailing Industry

ment for Free

Threat of Substitutes Threat of new entrants

High – There is an increasing amount of

Low - Strong experience in the online

Summary of key findings from Porter’s Five Forces

ment for Free

d l titb Thi hi i fj fi h it li d lid t t G

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