GLOBAL POLICY AND STRATEGY ASSIGNMENT SAMPLE 2023
Introduction
Amazon initially started as an online book company that offered books at a more affordable price compared to other competitive stores which led to its success and slowly but surely expanding its business by diversifying its products and goods in the likes of electronics, houseware, music, movies, apparel, furniture etc. Amazon is considered one of the Big Four technology companies, along with Google, Apple and Facebook and is considered as the second largest private employer in the United States.
It is currently headed by Jeff Bezos as its Chairman, President and CEO and Werner Vogels as its CTO. In 2019, Amazon acquired a revenue of $280.522 billion, an operating income of $14.541 billion and a net income of $11.588 billion. Its total assets count up to $225.248 billion and its total equity of $62.06 billion (Farah and Ramadan, 2017).
Amazon has employees counting up to 840,400 worldwide. It is said that the video streaming industry is still in its developing phase resulting in the need for improvement and development in this industry. Currently, people are more into these online platforms rather than television as you can watch everything online rather than just sticking to one place.
This industry is investing massive amounts on online platform as market is booming and there are opportunities to capture new heights (Rehman, 2019). It is to be noted that more focus on cloud can be seen as this allows customers to access their data anywhere and anytime making it feasible for customers (Giannino, 2019).
Furthermore, diverse players within the digital videos content marketplace are embracing cloud computing for the convenience of customers to ensure they are getting digital content which is stored on the servers (Huang and Liu, 2019).
Market Size, Growth and Shares.
The global video streaming market size was previously valued at $38.56 billion in 2018, and is projected to reach $149.34 billion by 2026 expand at an 18.3% CAGR during the period of 2019 to 2026.
The video streaming industry has seen a rapid growth in the field of information and technology and used for business operations helping various organizations in modernizing their daily schedules (Iverson and Thompson, 2017). One of the most important factors that has contributed to its rise and popularity among customers is the “rising demand for live and on-demand video content among consumers”.
The video streaming market is a competitive industry with top streaming companies and emerging companies trying to offer content of the best quality at an affordable price with varying options the consumers can choose from the content library available in these sites which can help them earn a huge consumer rate. Some of Amazon’s top competitors are Netflix, Hulu, Google, HBO, Apple TV+, and Disney Plus.
SWOT Analysis of Amazon
Strengths- Amazon is the largest online retailer thus giving their brand name a big position in the marketing world. Amazon is ranked at the 3rd position right after Apple and Google in Interbrand’s Global Brand Ranking 2019 (Iwakabe And Conceicao, 2016).
It has a brand value of $125 billion. Through its strategic marketing plans and catering to the customers by providing products at inexpensive rates, it has garnered at huge customer loyalty across the world. It has formed numerous strategic alliance with many companies like Evi Technologues, Thalmic Labs, Shoefitr, etc. it has a strong value chain system which also helps in maintaining a low-cost structure. Amazon, as of 2018, has sold 562.3 million products from its website.
Weaknesses- Amazon is behind Netflix with their Amazon Prime streaming service. With new online streaming platforms available in the market, Amazon is vulnerable to losing customers to companies like Netflix, Hulu, Disney Plus, etc.
Opportunities- With the increase in online retail sales, Amazon can gain the opportunity to grow their brand by expanding their operations in developing market places.
Threats- There is an increasing amount of pressure on Amazon to collect sales tax on merchandise sold through online websites. There is also a growth in competition from brands and companies such as EBay and Netflix with the possibility of the latter hindering the growth of Amazon Prime.
PESTLE Analysis
Political factors- Amazon relies on the political stability in countries like the USA and other European countries for its growth and expansion. They also rely on the e-commerce network, however, they are affected by cybersecurity bills like other companies too (Jones and Harvey, 2017).
Economic Factors- Business companies depend on the economy to flourish, Amazon is no exception. The fate of all business companies, online or offline, depends on the economic situation of the countries they are functioning in. The economic stability of developed markets, the increasing disposable income, and the potential economic recession of China are seen as significant economic factors that affect Amazon.
Social Factors- Amazon has been facing social criticism as it is seen that Amazon is negatively impacting the public’s health. The reason behind this is because Amazon has been introducing ways that are a lot easier for the customers to receive their products in a matter of time without having them to step out of their homes and with their expansion into the grocery industry, is seen as a negative impact on the public (Kamps and Schetter, 2018). The ever increasing wealth disparity along with increasing consumerism in developing countries and increasing online buying habits are noted as the major social factors impacting Amazon.
Technological Factors- Amazon being a technological company, the technological factors could impact their profit and sales. It is determined that Amazon rely heavily on varying degrees of technology to distribute their products to customers. On top of that, Amazon faces the threat of rapid technological obsolescence which is a threat to its technological measures. The increasing rate of cybercrime and the opportunity in the increasing efficiency in IT resources are other technological factors of Amazon.
Environmental Factors- Sustainability is one of the greatest concerns for businesses all around the world. Online retailers are also required to focus on areas regarding packaging, waste reduction, and energy consumption which could have a great impact on environment and questions their sustainability. Amazon has taken these measures into consideration and has invested in CSR and sustainability that promote waste reduction and renewable energy (Kamps and Schetter, 2018).
Amazon’s key environmental focus is on renewable energy and has made major investments in this area.
Legal Factors- Being compliant with the law should be important for every business. Amazon maintains a separate legal team to oversee its legal issues and challenges. Companies like Amazon should be aware of other several laws besides the basic laws like labour laws and be in compliance with them. Every company should be aware of the laws that differ from country to country and remain compliant with them.
Conclusion
Amazon remains the largest and biggest online retail company despite all these factors and the competition. The risks of being overthrown from the top are high because of the growing competition from other big and growing companies like Netflix, Google, Hulu and so on, but if Amazon adopts new marketing measures that can have appositive impact on the masses, its place in the top list of business companies is assured.
However, there is no denial that competition will cease but will grow over time. With a market value of 1.6 trillion dollars and operating in 13 countries that are slowly expanded into other countries as well, it can be assured that Amazon will grow rapidly.
References
Farah, M. and Ramadan, Z., 2017. The Rise of the Impulsive Shopper: The Case of the Amazon Dash Button. ACR North American Advances.
Giannino, M., 2019. Selective Distribution Networks for the Marketing of Luxury Branded Products Versus the Amazon Marketplace: The Sisley v Amazon Case before the Court of Milan. Available at SSRN 3506834.
Huang, Y., Liu, H., Li, W., Wang, Z., Hu, X. and Wang, W., 2019. Lifestyles in Amazon: Evidence from online reviews enhanced recommender system. International Journal of Market Research, p.1470785319844146.
Iverson, L.R., Thompson, F.R., Matthews, S., Peters, M., Prasad, A., Dijak, W.D., Fraser, J., Wang, W.J., Hanberry, B., He, H. And Janowiak, M., 2017. Multi-model comparison on the effects of climate change on tree species in the eastern US: results from an enhanced niche model and process-based ecosystem and landscape models. Landscape ecology, 32(7), pp.1327-1346.
Iwakabe, S. And Conceicao, N., 2016. Metatherapeutic processing as a change-based therapeutic immediacy task: Building an initial process model using a task-analytic research strategy. Journal of Psychotherapy Integration, 26(3), p.230.
Jones, S. And Harvey, M., 2017. A distributed leadership change process model for higher education. Journal of Higher Education Policy and Management, 39(2), pp.126-139.
Kamps, I. and Schetter, D., 2018. Performance marketing. Springer Fachmedien Wiesbaden.
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