Sept 2022 Week Four

External Factors

Weight

Rating

Weight Score

Remarks

Opportunities

Dominance of online shopping

0.3

2

0.4

Online shopping has a become common place in all most every country of the world. Amazon is one of the organizations that enjoys this new shift. For instance, since the outbreak of the global COVID-19 pandemic the number of online shoppers has increased around the world (Warrier, et al. 2022).

Possibilities of expanding in developing countries

0.05

1

0.1

With increasing numbers of online shopping as a new trend in developing countries of the world, Amazon can expand and exploit these markets. Amazon can take the first step ahead of its competitors like Alibaba and eBay and venture into these markets (Tarabasz, 2022). However, this segment has been given a lower score because internet penetration in such countries is still very low.

Better use of internet and computing related opportunities

0.2

3

0.5

Amazon is always ahead with internet and computing advancements. The organization indeed understands the nature of its business and invests a lot in information technology (Tarabasz, 2022). This key building block in ecommerce and therefore it has a higher score for the company.

Product differentiation

0.05

2

0.06

If a business can offer that which its customers can find unique and appealing, then it is in a better position to win their loyalty. Amazon has mastered what makes it customers buy its products and capitalized on it (Dudely, 2020).

Worldwide acceptance of the brand

0.1

1

0.1

Brands that dominate the marketplace have a characteristic of being accepted and recognized by the target consumers. For Amazon, global acceptance and recognition makes it easy for its customers to associate with its products. Amazon has now become a household name not only in the United States of America, but also in other countries of the world (Tarabasz, 2022).

Cost leadership

0.05

0.08

0.07

Cost leadership is the advantage that a business has over its rivals by controlling and minimizing its overheads where possible. The business model adopted by Amazon is one key factor that is attributed to its cost leadership. The organization has invested in robots to minimize operational costs

Threats

Overreliance on online business model

0.05

1

0.5

While Amazon uses its online presence to its advantage, it is notable that the organizations over relies on the business model. The model is easy to imitate and can easily be copied and implemented by a new entrant in the industry (Dudely, 2020).

Declining Profitability

0.04

0.8

0.4

While Amazon has mastered the art of operating under tight margins to increase sales, this move may affect its future profitability. A promotion strategy such as free shipping has the potential of affecting the organization’s profits.