Amazon Analysis Notes
The analysis on industry and competitor environment is important for organizations, because its useful for managers to understand the competitive forces acting on and between the organizations’s in the same industry.
Porters Five Forces in the E-Retailing Industry
Porter’s Five Forces analysis is used to assess the attractiveness of different industries, and therefore, it can help in illustrating the sources of competition in a particular industry.
The competitive rivalry amongst the e-retailing industry is intense. From some of the largest to the smallest companies, dotcom businesses are making competition intense. Amazon.com competes directly with big firms such as Ebay. The threat of new entrants that are able to compete directly with Amazon.com is low.
The strong brand image of Amazon.com should be an advantage in any price wars.
Macro Environment
Political. Government invests money in IT Infrastructure. In consequence, more people can have Internet, which means an increase in users. Faster and better Internet access for users.
Economic. In UK high interest rate slow consumer spending, but situation is different in China due to high economic growth that brought and idea enter Chinese market. More potential customers for Amazon.com
Social. Increase in online social networking, which can give an advantage of this new channel. Some people are still afraid of shopping online which needs to be overcome in order to increase users.
Technological. There is an increase in broadcasting, information and telecommunications technologies for Internet access. Increased rate of Internet sources usage. Rapid development of ‘high-speed’ network services (e.g. broadband) increases usability of media. Contents are easily made available to online shoppers.
Environmental. Less movements (car trips), more shopping online. Changing business methods and environment to become more “green”, e.g. with postage and packaging, work environment.
Legal. No common
Porters Five Forces in the E-Retailing Industry
Porter’s Five Forces analysis is used to assess the attractiveness of different industries, and therefore, it can help in illustrating the sources of competition in a particular industry.
The competitive rivalry amongst the e-retailing industry is intense. From some of the largest to the smallest companies, dotcom businesses are making competition intense. Amazon.com competes directly with big firms such as Ebay. The threat of new entrants that are able to compete directly with Amazon.com is low.
The strong brand image of Amazon.com should be an advantage in any price wars.
Macro Environment
Political. Government invests money in IT Infrastructure. In consequence, more people can have Internet, which means an increase in users. Faster and better Internet access for users.
Economic. In UK high interest rate slow consumer spending, but situation is different in China due to high economic growth that brought and idea enter Chinese market. More potential customers for Amazon.com
Social. Increase in online social networking, which can give an advantage of this new channel. Some people are still afraid of shopping online which needs to be overcome in order to increase users.
Technological. There is an increase in broadcasting, information and telecommunications technologies for Internet access. Increased rate of Internet sources usage. Rapid development of ‘high-speed’ network services (e.g. broadband) increases usability of media. Contents are easily made available to online shoppers.
Environmental. Less movements (car trips), more shopping online. Changing business methods and environment to become more “green”, e.g. with postage and packaging, work environment.
Legal. No common