SWOT Analysis Amazon

Amazon is a proIitable organization. In 2005 proIits Ior the three months to June dipped 32 to
$52m (29.9m) Irom $76m in the same period in 2004. Sales jumped 26 to $1.75bn. Until
recent years Amazon was experiencing large losses, due to its huge initial set up costs. The
recent dip is due to promotions that have oIIered reduced delivery costs to consumers. This
SWOT analysis is about Amazon.
Strengths.
O Amazon is a proIitable organization. In 2005 proIits Ior the three months to June dipped
32 to $52m (29.9m) Irom $76m in the same period in 2004. Sales jumped 26 to
$1.75bn. Until recent years Amazon was experiencing large losses, due to its huge initial
set up costs. The recent dip is due to promotions that have oIIered reduced delivery costs
to consumers.
O ustomer Relationship Management (RM) and InIormation Technology (IT) support
Amazon's business strategy. The company careIully records data on customer buyer
behaviour. This enables them to oIIer to an individual speciIic items, or bundles oI items,
based upon preIerences demonstrated through purchases or items visited.
O Amazon is a huge global brand. It is recognisable Ior two main reasons. It was one oI the
original dotcoms, and over the last decade it has developed a customer base oI around 30
million people. It was an early exploiter oI online technologies Ior e-commerce, which
made it one oI the Iirst online retailers. It has built on nits early successes with books, and
now has product categories that include electronics, toys and games, DIY and more.
Weaknesses.
O As Amazon adds new categories to its business, it risks damaging its brand. Amazon is
the number one retailer Ior books. Toy-R-Us is the number one retailers Ior toys and
games. Imagine iI Toys-R-Us began to sell books. This would conIuse its consumers and
endanger its brands. In the same way, many oI the new categories, Ior example
automotive, may prove to be too conIusing Ior customers.
O The company may at some point need to reconsider its strategy oI oIIering Iree shipping
to customers. It is a Iair strategy since one could visit a more local retailer, and pay no
costs. However, it is rumoured that shipping costs could be up to $500m, and such a high
Iigure would undoubtedly erode proIits.
Opportunities.
O The company is now increasingly cashing in on its credentials as an online retail pioneer
by selling its expertise to major store groups. For example, British retailer Marks and
Spencer announced a joint venture with Amazon to sell its products and service online.
Other recent collaborations have been with Target, Toys-R-Us and the NBA. Amazon's
new Luxembourg-based division aims to provide tailored services to retailers as a
technology service provider in Europe.
O There are also opportunities Ior Amazon to build collaborations with the public sector.
For example the company announced a deal with the British Library, London, in 2004.
The beneIit is that customers c an search Ior rare or antique books. The library's catalogue
oI published works is now on the Amazon website, meaning it has details oI more than
2.5m books on the site.
O In 2004 Amazon moved into the hinese market, by buying china's biggest online
retailer, Joyo.com . The deal was reported to be worth around $75m (40m). Joyo.com
has many similarities to its new owner, in that it retails books, movies, toys, and music at
discounted prices.
Threats
O All successIul Internet businesses attract competition. Since Amazon sells the same or
similar products as high street retailers and other online businesses, it may become more
and more diIIicult to diIIerentiate the brand Irom its competitors. Amazon does have it s
brand. It also has a huge range oI products. Otherwise, price competition could damage
the business.
O International competitors may also intrude upon Amazon as it expands. Those domestic
(US-based) rivals unable to compete with Amazon in the US, may entrench overseas and
compete with them on Ioreign Ironts. Joint ventures, strategic alliances and mergers could
see Amazon losing its top position in some markets.
O The products that Amazon sells tend to be bought as giIts, especially at hristmas. This
means that there is an element oI seasonality to the business. However, by trading in
overseas markets in diIIerent cultures such seasonality may not be enduring.


our results
Thank you Ior responding to this assessment, your responses have been brought together in the
graphs below.
O 1he Spldergap analysls makes easy Lo spoL areas LhaL need aLLenLlon and helps when comparlng
your resulLs agalnsL oLhers
O elow Lhe Spldergap analysls you can flnd Lhe prlorlLlsed gaps
You can share these results by copying and pasting the URL in your web browser. We've also
emailed you a link!
Spidergap analysis
ReuJlng the xplJer churt
We suggest looking at the Iollowing areas (click Ior more inIormation):
8|g gaps
1he blggesL gaps normally lndlcaLe Lhe areas LhaL should become a prlorlLy for lmprovemenL
Sma|| gaps
1he smallesL gaps show you areas LhaL are seen Lo need less aLLenLlon
Sect|on trends
CuesLlons are grouped lnLo secLlons you may flnd enLlre secLlons performlng well or poorly 1hls
provldes you wlLh wlder areas of focus LhaL may need coordlnaLed efforL
Cver performance
Cverperformance ls posslble and lLs noL always a good Lhlng lL may lndlcaLe an area ln whlch an
unnecessarlly large amounL of Llme or money ls belng spenL
!rioritised gaps
ank uest|on |abe| (?) Gap mean Sect|on |abe| (?)




SeLLlng goals and sLandards

ersonal managemenL


Managlng Llme and seLLlng prlorlLles

ersonal managemenL

3
lannlng and schedullng work

ersonal managemenL

3
LlsLenlng

CommunlcaLlon skllls

3
undersLandlng

CommunlcaLlon skllls

3
Maklng declslons

1echnlcal compeLence

7
Coachlng Lralnlng and menLorlng oLhers

1eamworklng skllls

7
1hlnklng clearly and analyLlcally

1echnlcal compeLence

9
CommunlcaLlng clearly

CommunlcaLlon skllls

ank uest|on |abe| (?) Gap mean Sect|on |abe| (?)



9
MonlLorlng and evaluaLlng performance

1eamworklng skllls

9
ldenLlfylng and solvlng problems

1echnlcal compeLence


Sharlng and allocaLlng workload

1eamworklng skllls

ReuJlng the prlorltlxeJ gupx
The areas are sorted by their gap size. You may see the Iollowing (click Ior more inIormation):
8|g gaps
1he blggesL gaps normally lndlcaLe Lhe areas LhaL should become a prlorlLy for lmprovemenL
Sma|| gaps
1he smallesL gaps show you areas LhaL are seen Lo need less aLLenLlon
Cver performance
Cverperformance ls posslble and lLs noL always a good Lhlng lL may lndlcaLe an area ln whlch an
unnecessarlly large amounL of Llme or money ls belng spenL

our results
Thank you Ior responding to this assessment, your responses have been brought together in the
graphs below.
O 1he Spldergap analysls makes easy Lo spoL areas LhaL need aLLenLlon and helps when comparlng
your resulLs agalnsL oLhers
O elow Lhe Spldergap analysls you can flnd Lhe prlorlLlsed gaps
You can share these results by copying and pasting the URL in your web browser. We've also
emailed you a link!
Spidergap analysis
ReuJlng the xplJer churt
We suggest looking at the Iollowing areas (click Ior more inIormation):
8|g gaps
1he blggesL gaps normally lndlcaLe Lhe areas LhaL should become a prlorlLy for lmprovemenL
Sma|| gaps
1he smallesL gaps show you areas LhaL are seen Lo need less aLLenLlon
Sect|on trends
CuesLlons are grouped lnLo secLlons you may flnd enLlre secLlons performlng well or poorly 1hls
provldes you wlLh wlder areas of focus LhaL may need coordlnaLed efforL
Cver performance
Cverperformance ls posslble and lLs noL always a good Lhlng lL may lndlcaLe an area ln whlch an
unnecessarlly large amounL of Llme or money ls belng spenL
!rioritised gaps
ank uest|on |abe| (?) Gap mean Sect|on |abe| (?)




roacLlve soluLlons

8ole of P8

ank uest|on |abe| (?) Gap mean Sect|on |abe| (?)




1rusLed advlsor

8ole of P8

3
road range of servlces

P8s Lechnlcal compeLence

3
Soundlng board

My relaLlonshlp wlLh P8

3
lnfluence me

My relaLlonshlp wlLh P8

3
lnvolved ln plannlng

8ole of P8

3
uellvery parLners

8ole of P8

8
ConslsLenL rellable servlce

P8s Lechnlcal compeLence

8
useful soluLlons

P8s Lechnlcal compeLence

8
ulld sLrong relaLlonshlps

My relaLlonshlp wlLh P8

8
SLraLeglc parLners

8ole of P8


MeeLlng SLAs

P8s Lechnlcal compeLence


undersLand buslness challenges

uslness undersLandlng


rlng exLernal lnslghL

uslness undersLandlng


SoluLlon focused

My relaLlonshlp wlLh P8


1hlnklng beyond P8

My relaLlonshlp wlLh P8

7
ueep Lechnlcal experLlse

P8s Lechnlcal compeLence

7
undersLand role/acLlvlLles

uslness undersLandlng

7
undersLand buslness ob[ecLlves

uslness undersLandlng

7
undersLand wlder buslness

uslness undersLandlng

ReuJlng the prlorltlxeJ gupx
The areas are sorted by their gap size. You


may see the Iollowing (click Ior more inIormation):
8|g gaps
1he blggesL gaps normally lndlcaLe Lhe areas LhaL should become a prlorlLy for lmprovemenL
Sma|| gaps
1he smallesL gaps show you areas LhaL are seen Lo need less aLLenLlon
Cver performance
Cverperformance ls posslble and lLs noL always a good Lhlng lL may lndlcaLe an area ln whlch an
unnecessarlly large amounL of Llme or money ls belng spenL