Amazon SWOT Analysis: The 2018 Lessons and the 2019 Perspectives

amazon SWOT analysis
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I don’t know any company that is as frequently researched in Business and Management studies as Amazon. So, meet the world’s most dynamic and ambitious company! Amazon SWOT analysis, therefore, is not only a complete evaluation of the company’s strengths, weaknesses, opportunities, and threats but also an ultimate marketing and business exercise.

Some think that Amazon is a soap bubble; and its burst is a matter of years, if not months. Our geeks aren’t that pessimistic. We’ve accumulated everything we know about Amazon to make the most accurate prognosis for the year 2019!

   SWOT Analysis of Amazon

Everything that you ever wanted to buy is at one place, and the name of this place is Amazon. When Jeff Bezos started his business in 1994, Amazon was one of the few Internet retailers and, certainly, had ample opportunities to turn into the tech giant. However, things change quickly, and now Amazon is to review its achievements and, possibly, chart a new development plan.

Therefore, we are happy to introduce Amazon SWOT analysis 2017 and Amazon SWOT analysis 2018 to inform the 2019 strategic planning. A special bonus is the TOWS matrix to inform your business reports!

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      💪 Strengths

So, what’s that special about Amazon? Well, there’s a bunch of strengths that distinguish the company from its competitors:

  • Strong background: When we speak about online retailing, we think about Amazon. The persistent association that arises in customers’ minds is, probably, the best advantage any company is dreaming of!
  • Customer-centric: Amazon is the place where you feel like a boss! A customer-centric approach is at the core of Amazon’s business philosophy: “We seek to be Earth’s most customer-centric company. We are guided by four principles: customer obsession rather than competitor focus, passion for invention, commitment to operational excellence, and long-term thinking.
  • Rapid business growth and expansion: It is fascinating to learn that the bookstore turned into the everything-you-wish store in less than a decade! Need a video game? Consider Amazon! Looking for a toy? Why not try Amazon! Depressed by your shabby furniture? Amazon will help you!

      ❌ Weaknesses

But we won’t cheat you by telling that Amazon is the place to invest your last dollar in. Every cloud has a silver lining, and Amazon SWOT analysis demonstrates it clearly:

  • Competition and shrinking margins: For several years, Amazon has been in the midst of the price wars and has witnessed its margins shrinking. Experts report that the company lost as many as $359 crs in India in just one fiscal year.
  • Tax avoidance: Have you heard about Amazon’s tax avoidance schemes in the USA, UK, and other countries? The problem is that many people did, and negative publicity can cost the company’s reputation!
  • Product flops: While most Amazon products are of high quality, some of them are a disaster! Fire phone and Kindle Fire did not impress the public and left the company with a dent in its pockets!

      📈 Opportunities

But the company doesn’t give up since there’s a number of opportunities around the corner:

  • Global expansion: The world is full of places where customer demand is many times the supply! Consider South Korea as a start: An ideal place with low competition in e-commerce!
  • Acquisition: The best way to beat competitors is to acquire them! While conducting a SWOT analysis on Amazon, our geeks have created a comprehensive list of competitors; and you can familiarize with it below!
  • Opening physical stores: Online retaining rules! BUT the company cannot ignore those customers who prefer the old school brick and mortar stores. Opening physical stores outside the United States wins customer loyalty and boosts sales!
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      📉 Threats

And, of course, Amazon SWOT analysis should keep abreast of events not to overlook threats:

  • Tough competition: The entry barriers are low, and everyone can enter online retailing, which is no longer a niche. Watching competitors is the only way to avoid price wars and shrinking margins.
  • Local competitors: Local competition is another fly in the ointment! With the launch of Snapdeal and Flipkart Amazon has been having hard times in India. It’s time to cheer up and come up with a deal that the competitors can’t invent!
  • Government regulations: Differences in government regulations make a hurdle! And it is especially true in developing countries that are the main focus of Amazon’s expansion.

   Amazon Competitors

And what about competitors? It seems like Amazon has many of them! Let’s take the following ones as an example:

IndustryCompetitor(s)
MediaEBAY
NFLX
TWX
AAPL
GOG
Electronics/General MerchandiseBABA
TGT
WMT
VIPS
JD
Operating SegmentCDW
CNXN
ACN

   TOWS Matrix

And the long-awaited bonus – Amazon’s TOWS matrix!

Basically, TOWS matrix is a tool that was developed by Heinz Weirich, and that offers practical use of SWOT findings. Time to put things upside down and think what we can do for Amazon!

So, here you go!

 Strengths (S)Weaknesses (W)
Opportunities (O)

Growing e-market

No competition
S-O Strategies

S1-O1: Entering the market with Alexa and Amazon Go
W-O Strategies

W1-O1: A balance of innovation, quality, and cost

W2-O2: Transparency; ethical business practices
Threats (T)

Local startups

Local consumer behaviors
S-T Strategies

S1-T1: Enter with innovative products

S2-T2: Create an offer that combines world known offers and the ones crafted for a particular developing market
W-T Strategies:

W1-T1: Outsmart local competitors by better deals

W2-T2: Open physical stores outside the United States

   Afterword

It is too early to say goodbye to Amazon! Despite the hurdles, the company’s pockets are deep, and the customers are still loyal. Of course, the times are getting hard, and competitors won’t miss a chance to bite off a lucrative piece of the e-retailing market. But come on, guys, Amazon has become the symbol of the online retailing era, and we’ll always love this feel-like-the most-precious-person-in-the-world place!

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