Amazon.com, Inc. is an online based commerce company that was incorporated in 1996 that serves four customer sets (sellers, consumers, content creators and enterprises) , . The company operates in both the United States (where its headquarters is) and internationally , . Because of its widespread presence throughout the world, Amazon.com offers a unique advantage in the e-commerce world that is better understood by analyzing their external and internal environment, as well as their business and corporate-level strategy.
Advantage
Amazon.com fields its biggest advantage over competitors by offering low-prices on high-quality products with a highly-convenient way to acquire those products . Amazon.com also wields a huge advantage over its competitors by offering an increasingly diverse field of products and services (such as moving from selling primarily books to other pieces of merchandise, to now selling kindles and an on-demand television application) .
Another way in which amazon.com has an advantage is the fact that amazon.com has no physical stores present (just warehouses for shipping and receiving) . This results in a lower cost structure that a physical store location can’t afford .
Another two ways in which amazon.com has an advantage is, for one, its fast and efficient shipping methods, which it has by making shipping deals with shipping companies and by utilizing statistics and linear modelling to predict what will sell at what time (or at least attempt to predict) . The second way in which amazon.com has an advantage is that it keeps credit card information for customers on file, which allows its customers to conveniently buy products (hassle-free shopping) .
External Environment
In regards to its external environment, amazon.com is affected the most by its customer base and the economy. Amazon.com’s customer base is one that strives for convenient and affordable shopping (with amazon.com offering both) . However, a fickle customer base has resulted in amazon.com having to jump into many different markets, in order to keep up with its competitors.
The economy is also a large factor, in regards to the external environment for amazon.com. In an economic slump, amazon.com could see a drop in sales (as people will buy less), which will affect revenue and money spent on future projects and expansions. However, amazon.com continually offers low and affordable prices (especially when compared to other competitors), which saves the company in an economic slump .
Internal Environment
A rather big factor for amazon.com’s internal environment is its strain on its employees . Amazon.com has to keep up with the demand during holiday hours, and therefore its employees have to provide . This can create a strain on the workforce for amazon.com, which is a threat to the internal environment of the company.
Business and Corporate Strategy
Overall, amazon.com’s business strategy revolves around the process of offering high-quality products at low prices which gives the company an incredible competitive advantage . Its corporate strategy revolves around bringing a diverse set of products and options to the table, which allows the company to make radical changes in a fluctuating market .
Conclusion
Amazon.com is a giant in the online retail world. Its strategy of offering a diverse amount of products and services at low prices give amazon.com an advantage over its many competitors (some physically located, others online-based). As well, amazon.com has learned to strive from its external environment, but does suffer some weaknesses from its internal environment.
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