Amazon

Company report, featuring a PESTLE, Porters Five Forces, 5C, MOST, CATWOE and SWOT analysis

Introduction

This report provides a comprehensive overview of Amazon, a member of the world’s 10,000 largest companies. It is regularly updated to ensure the most current and accurate information is available.

Only Premium members have full access to this study on Amazon. This includes the SWOT analysis, PESTLE, 5C analysis, CATWOE, Porters Five Forces, MOST analysis, and a myriad of additional high value sections.

We identify potential new products and services, forecast future market trends, and make predictions regarding synergies between Amazon and other organisations, all outside of the analysis-driven sections.

Company Description

Amazon is an American technology company headquartered in Seattle, Washington, founded in 1994. Its main products and services include online retail, e-commerce platform and cloud computing services, which serve customers around the world. Amazon's main focus lies in consumer electronics, digital content, apparel and home goods. It also provides services such as Amazon Prime and Alexa, an artificial intelligence-powered voice service.

Industry Overview

The primary industry Amazon operates in is e-commerce, which has a total market size of more than $400 billion in the United States alone. This industry employs millions of people around the world, with a large number of employees based in the United States, India, and China. Amazon also employs a large number of people in other countries such as the United Kingdom, Japan, and Germany. The majority of Amazon's employees are based in the US, India, and China, with a combined total of over a million employees.

Industry Classification

In terms of formal classification, Platform Executive has tagged Amazon as a business operating within the Dotcom industry.

1. Introduction
2. Company Description
3. Industry Overview
    3.1 Industry Classification
4. Intellectual Property
5. Major Products and Services
6. Key Competitors
7. Stakeholders
8. Value Proposition
9. Customers and Cohorts
10. Competitive Advantages
11. Market Trends
12. Key Performance Indicators
13. Financials (BETA)
    13.1 Highlights
    13.2. Board members
    13.3 Share Performance
    13.4 Income Statement
14. PESTLE Analysis
15. Potential Products/Services
16. Potential Synergies
17. Porter's Five Forces
18. CATWOE Analysis
19. SWOT Analysis
    19.1 Strengths
    19.2 Weaknesses
    19.3 Opportunities
    19.4 Threats
20. 5C Analysis
21. MOST Analysis
22. Innovation Scorecard
23. Appendices

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Intellectual Property

Some of the Patents granted to, or relevant to the organisation include the following:

Patent Title: Method and Apparatus For Voice Input Of Text
Patent ID: 10,527,835
Date: April 2, 2020.

Patent Title: System and Method for Making Advertising Decisions
Patent ID: 10,527,834
Date: April 2, 2020.

Patent Title: Enabling Automated Selection Of Items From A Group Of Items
Patent ID: 10,527,833
Date: April 2, 2020.

Patent Title: System and Method for Determining Events in a Video
Patent ID: 10,527,832
Date: April 2, 2020.

Patent Title: Method and Apparatus For Voice Interaction With An Audio/Visual Device
Patent ID: 10,527,831
Date: April 2, 2020.

Patent Title: System and Method for Generating Targeted Recommendations
Patent ID: 10,527,830
Date: April 2, 2020.

Patent Title: System and Method for Rendering Media Content
Patent ID: 10,527,829
Date: April 2, 2020.

Patent Title: System and Method for Dynamically Generating Media Content
Patent ID: 10,527,828
Date: April 2, 2020.

Patent Title: System and Method for analysing Media Content
Patent ID: 10,527,827
Date: April 2, 2020.

Patent Title: System and Method for Automatically Generating Media Content
Patent ID: 10,527,826
Date: April 2, 2020.

Major Products & Services

The main products and/or services commercialised by this business include the following:

Amazon Prime – A subscription service that offers free two-day shipping, unlimited streaming of movies and TV shows, and other exclusive benefits.
Amazon Web Services – A cloud computing platform that offers pay-as-you-go services such as computing, storage, networking, and analytics.
Amazon Marketplace – An online marketplace where third-party sellers can sell their products directly to consumers.
Amazon Echo – A voice-controlled device that enables users to control home appliances, play music, and access other services.
Amazon Music – A streaming music service that offers access to millions of songs, playlists, and radio stations.
Amazon Video – A digital video streaming service that allows users to watch movies and TV shows, including original Amazon content.
Amazon Kindle – An e-reader device that allows users to read digital books, magazines, and other publications.

Key Competitors

We have identified the following organisations as being key competitors:

Walmart
eBay
Apple
Best Buy
Costco
Target
Home Depot
Kohl's
Staples
Macy's

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Key Stakeholders

Stakeholders are individuals or groups who have an interest in a business and/or are affected by its actions.

These stakeholders can have different requirements and expectations from the business, which must be taken into account when making decisions.

By understanding their stakeholders’ requirements, a business can make informed decisions that benefit all involved.

Below is the list of internal and external stakeholders we have identified for this business:

1. Customers: Amazon's customers are its primary stakeholders, as the company's success depends on their satisfaction.

2. Shareholders: Shareholders have a financial stake in Amazon's success and are therefore key stakeholders.

3. Employees: Amazon's employees are an important stakeholder group, as they are the ones who drive the company's growth.

4. Suppliers: Amazon relies on suppliers to provide products to its customers, making them a key stakeholder.

5. Partners: Amazon has numerous partnerships with other companies, making them a key stakeholder.

6. Government: Governments can have a significant impact on Amazon's operations, making them a key stakeholder.

7. Competitors: Amazon's competitive environment is an important stakeholder group, as the company must remain competitive in order to succeed.

Value Proposition

A value proposition explains the unique value and/or benefits that an organisation provides to its customers, partners, stakeholders and the overall market. It outlines what makes a company like Amazon different from its competitors, along with what it can offer that key competitors cannot.

A corporate value proposition can be used with the competitive advantages section of this report in order to better understand Amazon and its position within the marketplace.

Web Services AWS offers a variety of cloud computing services that make it easy for businesses to get started and scale their operations. These services include Amazon Elastic Compute Cloud (EC2), Amazon Simple Storage Service (S3), Amazon Relational Database Service (RDS), and Amazon Elastic Compute Cloud (EC2) for Windows.

Competitive Advantages

Competitive advantages are unique attributes, strategies, resources, or capabilities that allow an organisation to outperform its competitors and achieve superior market position and profitability.

Competitive advantages for the business include the following:

Low Prices: Amazon’s competitive advantage is its ability to offer customers lower prices than its competitors. By leveraging its large scale and efficient operations, Amazon is able to pass on the savings to its customers.

Convenience: Amazon offers customers convenience by providing a one-stop-shop for all their needs. Customers can shop for multiple items in one place and have them delivered quickly.

Fast Shipping: Amazon offers fast shipping, with Prime members getting free two-day shipping on most items. This is a key competitive advantage over other retailers who may not offer free shipping or take longer to ship orders.

Variety: Amazon carries a wide variety of products, from everyday items to specialised items. This gives customers more options to choose from and makes it easier to find what they need.

Prime Membership: Amazon’s Prime membership program offers members exclusive access to discounts, free shipping, streaming services, and more. This encourages customers to buy from Amazon instead of its competitors.

Customers & Cohorts

As part of this competitive intelligence study, we have identified the main customers of the organisation.

These include the following cohorts:

Consumers
Business customers
Professional sellers
Marketplace sellers
Enterprise customers
Government agencies
Educational institutions

Market Trends

Market trends can impact an organisation by influencing consumer behavior, altering supply and demand dynamics, and affecting the organisation's ability to remain competitive in the market.

As part of this study, we have identified a number of potential short-term to medium-term trends that could impact the organisation. These include the following:

Increasing Competition: One of the major market trends that could impact Amazon over coming years is increasing competition. As more online retailers enter the market and new technologies are developed, Amazon will face increased competition from both established and new players. This could lead to higher prices, lower margins, and increased customer acquisition costs.

Changing Consumer Habits: Changing consumer habits also present a major market trend that could impact Amazon in the coming years. As more people move towards shopping online, Amazon will need to adjust its strategies and offerings to keep up with changing market demands. This could lead to changes in product offerings and pricing, as well as the need for more efficient delivery and customer service systems.

Growing Demand for Localized Offerings: Another trend that could impact Amazon is the growing demand for localized offerings. Consumers are increasingly seeking out local products and services, and Amazon will need to adjust its strategies to meet this demand. This could lead to changes in product offerings and delivery services, as well as increased investment in local marketing and advertising.

Increasing Use of Social Media: Finally, the increasing use of social media presents a major market trend that could impact Amazon. As more people use social media to shop, Amazon will need to adjust its strategies and offerings to meet this demand. This could lead to increased investment in social media marketing, as well as the need for more efficient delivery and customer service systems.

Key Performance Indicators

Below is a list of KPI's that we have identified as being strategically relevant to this organisation:

Financials (BETA)

The key financials for Amazon include income statements, which can be found in their annual reports. These financial statements provide information on the organisation's financial performance and health, including revenue, expenses, and profits. This information, along with other indicators are used by investors, analysts and other stakeholders to evaluate the company's performance and future prospects.

Where a financial does not match, we have included those of the parent company (if a listed entity). If the financials are missing please contact us and we will prioritise the update.

Key Personnel

Income Statement

[eod_financials target="AMZN.US" id="10329343" preset="Income Statement" years="2018-2023"]

Highlights

Top-level corporate stats and financial highlights for the listed entity, include:

Share Performance

Below is the current (EOD) share performance for the company, or its listed parent:

Potential Products/Services

As part of this study we have attempted to prognosticate potential products and/or services this organisation could develop in the short to medium-term.

A streaming music service: Amazon could expand its Prime Music service or develop a new streaming music platform offering access to a library of music content.

A grocery delivery service: Amazon could expand its Amazon Fresh service to offer grocery delivery to customers.

A streaming video service: Amazon could expand its Prime Video service or develop a new streaming video service offering access to a library of movies and TV shows.

A travel/hotel booking service: Amazon could expand its Amazon Travel service to offer hotel and travel booking services.

A meal-kit delivery service: Amazon could develop a meal-kit delivery service offering pre-prepared ingredients for a variety of meals.

A home improvement/repair service: Amazon could develop a home improvement/repair service offering on-demand repair services for customers’ homes.

A home security service: Amazon could develop a home security service offering customers an array of home security solutions.

A virtual personal assistant service: Amazon could develop a virtual personal assistant service offering customers access to a virtual assistant to help with various tasks.

Potential Synergies

Using our product and portfolio-matching algorithm, we have determined that the following organisations have potential synergies with the company:

1. Microsoft: Microsoft and Amazon have a strong partnership, with Amazon Web Services (AWS) offering a range of cloud services and Microsoft's Azure cloud platform being used to power Amazon's e-commerce platform.
2. Apple: Apple and Amazon have a strong partnership, with Amazon's Alexa voice assistant being integrated with iOS devices and Apple Music streaming service being available on Amazon Echo devices.
3. Alibaba: Alibaba and Amazon have been in a partnership since 2015, when Alibaba began offering its products on Amazon’s marketplace.
4. Walmart: Walmart and Amazon have a partnership, with the two companies agreeing to cooperate on voice shopping and delivery services.
5. Google: Google and Amazon have a strong partnership, with the two companies collaborating on Google Assistant and Amazon Echo devices.

Porter's Five Forces

Created by Harvard Business School Professor Michael Porter in 1979, Porter's Five Forces model is designed to help analyse the particular attractiveness of an industry; evaluate investment options; and better assess the competitive environment.

The five forces are as follows:

Competitive rivalry
Supplier power
Buyer power
Threat of substitution
Threat of new entries

Porter's 5 forces is a framework for assessing the competitive forces in an industry. The framework identifies 5 forces that shape competition:

1. Threat of new entrants: The ease with which new firms can enter the market and compete with existing firms.

2. Bargaining power of buyers: The ability of buyers (e.g. consumers) to negotiate prices and terms with suppliers.

3. Bargaining power of suppliers: The ability of suppliers (e.g. manufacturers) to negotiate prices and terms with buyers.

4. Threat of substitute products: The availability of products or services that are close substitutes for the products or services offered by existing firms.

5. Rivalry among existing firms: The intensity of competition among existing firms in the market. In general, Amazon scores WELL in relation to Porter's 5 forces.

1. Threat of new entrants: Amazon has a significant competitive advantage in terms of scale, technology, and customer data. As a result, it would be very difficult for new firms to enter the market and compete with Amazon.

2. Bargaining power of buyers: Amazon has a very strong brand and customer base. As a result, buyers do not have a lot of bargaining power when it comes to negotiating prices and terms with Amazon.

3. Bargaining power of suppliers: Amazon has a very strong brand and customer base. As a result, suppliers do not have a lot of bargaining power when it comes to negotiating prices and terms with Amazon.

4. Threat of substitute products: There are many close substitutes for the products and services offered by Amazon. However, Amazon has a very strong brand and customer base. As a result, it is not easy for substitute products to gain market share.

5. Rivalry among existing firms: There is intense competition among existing firms in the market. Amazon is the clear market leader, but there are many other firms that are trying to compete with Amazon.

PESTLE Analysis

This PESTLE analysis is a strategic planning tool that assesses key external factors affecting the organisation, including the following:

Political
Economic
Social
Technological
Legal
Environmental

Each of these factors is analysed to determine their impact on the organisations strategy, objectives, and operations.

By utilising a PESTLE analysis, the organisation can make better decisions and develop strategies to address potential risks and opportunities.

CATWOE Analysis

The CATWOE analysis is used to investigate each stakeholders perspectives in order to enable the business to make informed decisions.

The CATWOE analysis is a problem-solving tool consisting of six elements:

Customers
Actors
Transformation process
World view
Owners
Environmental constraints

We view the CATWOE as being most useful when used in conjunction with other problem-solving tools such as a SWOT analysis.

Customers: Amazon's customers are individuals and businesses who use its online shopping platform, digital media services, cloud computing services, and other products and services.

Actors: The actors for Amazon include the customers, employees, partners, and suppliers.

Transformation process: Amazon's transformation process involves the customers searching for and buying the products they need through the Amazon website, the employees fulfilling orders and providing customer service, the partners helping to expand Amazon's reach and services, and the suppliers providing the products and services to customers.

World view: Amazon's world view is that it is a customer-centric company that strives to provide the best customer experience possible. It seeks to provide the lowest prices and the most convenient shopping experience for customers.

Owners: Amazon is owned by its shareholders and operated by its CEO, Jeff Bezos.

Environmental constraints: Amazon's environmental constraints include government regulations, competition from other online retailers, and the availability of products and services. Additionally, it is subject to economic conditions, such as fluctuations in the stock market and changes in consumer demand.

SWOT Analysis

This SWOT analysis is a strategic planning tool used to assess the strengths, weaknesses, opportunities and threats of the Amazon business.

When creating this SWOT the team at Platform Executive have taken into consideration the corporate strategy; brand; key financials; the competitive landscape; along with the products and/or services offered.

To offer increased context for future innovation and product development we also consider the historical context for the business and industry; and perceived direction of travel.

Upon researching the company, we have uncovered a number of strategic and operational strengths, weaknesses, opportunities and threats.

Strengths

Below is a list of the strengths we have identified for the business:

1. Amazon has a diversified business model with a strong focus on innovation.

2. Amazon is a market leader in e-commerce and cloud computing.

3. Amazon has a strong customer base and brand equity.

4. Amazon has a global footprint with a growing international business.

Opportunities

Below is a list of opportunities we have identified for the business:

1. Increase customer loyalty and engagement by providing more personalised shopping experiences. Amazon should focus on leveraging its data-driven insights to target customers with tailored product recommendations, discounts, and other incentives. This could also help Amazon to increase its market share and expand into new customer segments.

2. Strengthen its logistics infrastructure and delivery capabilities. Amazon should continue to invest in its logistics infrastructure, including its fleet of trucks, warehouses, and other delivery systems, to ensure fast, efficient, and reliable delivery of products. This could help Amazon improve customer satisfaction and increase revenues.

3. Invest in disruptive technologies. Amazon should continue to invest in technologies such as artificial intelligence, machine learning, and robotics to automate and streamline its operations. This could help Amazon to reduce costs, increase efficiency, and improve customer service.

4. Expand into new markets and geographies. Amazon should continue to explore new markets and geographies to increase its customer base and revenue. This could be done through expanding into new countries, launching new products, and opening new stores.

Weaknesses

Below is a list of the weaknesses we have identified for the business:

1. Lack of brick-and-mortar presence: Amazon is a primarily online-based company, which can be a disadvantage when competing against companies with a strong brick-and-mortar presence.

2. Warehouse locations: Amazon has a limited number of warehouses compared to its competitors. This can lead to longer delivery times for customers.

3. Vendor relations: Amazon has been known to be tough on its vendors, which can lead to difficulties in negotiating favorable terms and prices.

4. Shipping costs: Amazon’s shipping costs are higher than its competitors, which can price some customers out of the market.

Threats

Below is a list of the threats we have identified for the business:

1. Regulatory uncertainty. Amazon has faced a variety of regulatory headwinds, including antitrust and privacy concerns raised by government and regulatory bodies worldwide. These could potentially impact Amazon’s operations and strategies, including its ability to innovate, expand into new markets, and maintain competitive pricing.

2. Increasing competition. Amazon’s market dominance is facing increasing competition from both traditional and online retailers, as well as technology companies like Apple, Google, and Microsoft. These companies have the resources to challenge Amazon’s market position, which could lead to lower profits and increased customer attrition.

3. Delivery delays. Amazon is constantly striving to reduce delivery times but there are still delays due to capacity constraints, weather-related issues, and other factors. Delays of even a few days can lead to customer dissatisfaction and lost business.

4. Security risks. Amazon’s customer data, intellectual property, and financial information are all vulnerable to cyber-attacks and data breaches. These security risks can have a negative impact on the company’s reputation and its ability to attract and retain customers.

5C Analysis

The 5C Analysis is a marketing framework that can be used to provide insight into the key drivers of success, as well as the risk exposure to various environmental factors.

This (concise) 5C analysis examines the external and internal environment for Amazon. It includes analysing the company's customers, competitors, collaborators, context, and capabilities. We have produced this short analysis to identify potential opportunities and threats to Amazon, as well as areas where the company needs to improve its operations or strategy.

Company: Amazon is one of the world’s largest online retail stores. Founded in 1994, Amazon has grown to be a leader in the industry, offering a wide range of products, services and digital content.

Collaborators: Amazon has a wide network of partners, such as manufacturers, content providers, retailers, wholesalers and logistics providers, who help it to deliver its products and services.

Customers: Amazon’s customers range from individual shoppers to large companies. It offers a variety of services to meet the needs of its customers, such as Amazon Prime, which offers free shipping and access to digital content.

Competitors: Amazon’s competitors include other online retailers, such as Walmart, Target and eBay, as well as brick-and-mortar stores.

Content: Amazon’s digital content includes videos, music, books, magazines and games. It also offers a range of services, such as Amazon Web Services and Amazon Prime. Through its content, Amazon provides customers with an enjoyable experience and a convenient way to shop.

MOST Analysis

The MOST analysis framework is commonly used to identify an organisation's strategic goals, assess its strengths and weaknesses, and develop a plan to achieve its objectives. This analysis helps organisations to focus on what they want to achieve and how to achieve it, while also identifying potential roadblocks or obstacles that may arise along the way.

Mission
Objectives
Strategy
Tactics

We have created this analysis from a 3rd person perspective.

Innovation Scorecard

As part of our research and analysis activity, the team at Platform Executive assesses and then benchmarks businesses and the industry verticals in which they operate using a proprietary scoring mechanism.

First, we allocate a score of A-E for the industry vertical, gauged on the key organisations operating within the space; and then score the individual business using a 1-5 score.

A score of D-E within an industry means that it is potentially ripe to be disrupted by a new entrant into the marketplace; and/or vulnerable to technological change.

Likewise, a high score of 4-5 for the company in question indicates that in the view of the analysis team it lags behind notable businesses in terms of innovation and product pipeline.

Below is a guide to each score:

Industry score:

A	The industry is amongst the most innovative; with the leading players all driving the sector forward. Example industry: PaaS
B	The industry and its leading players have a good track record of innovation; and can quickly react to change. Example industry: Pharmaceutical
C	Companies operating within the sector have adequate levels of innovation; and engage in R&D activities when appropriate. Example industry: FMCG
D	Businesses operating in the industry do not invest enough time and resource into innovation. The sector is stagnant and a good candidate for disruption. Example industry: Retail Banking
E	The major players in the sector seem to lack suitable product development roadmaps; and as a result the sector is highly vulnerable to industry change. Example industry: Publishing

Company score:

1	The business is amongst the leading players in terms innovation and product pipeline. This will fulfil and reinforce the operations of the business in the medium to long-term.
2	The business has a good track record of innovation, in terms of its products and/or its business model. It is therefore more likely to be able to react and adapt to any changes to the industry.
3	The business is deemed to have an adequate innovation plan, build on research and development and sustainability where appropriate. The business has a product development strategy.
4	The business needs to invest more resource and/or intellectual capital in product development, pipelines and/or its business model. The business is at risk of stagnation.
5	The business seems to lack a suitable product development roadmap; and as a result is vulnerable to any notable industry change and/or new entrants in the marketplace.

The team at Platform Executive has judged Amazon as having an innovation score of B3.

Appendices

The appendices section of this report contains supplementary information that the team at Platform Executive deems helpful in providing a more comprehensive understanding of the report's contents.

This information is not considered an essential part of the study but serves as a useful supplement to the main text.

Methodology

This study on Amazon forms part of our series of competitive intelligence reports, which focuses on 10,000 of the largest corporates.

The information and data included are updated on a timely schedule to ensure that our Premium members receive the most up to date information .

The report is based on information and learning from the following sources:

Corporate websites
Proprietary research databases
SEC Filings
Corporate press releases
News articles
Financial data API's
Product-matching algorithm

Further Information

Premium members: If you cannot find the desired information or data set for the business you are researching then please reach out to our research and analysis team. We can tailor reports to meet your requiremnents, with a fast turnaround time.

If you require a bespoke study on a particular industry vertical, or marketplace we may also be able to help.

Disclaimer

Reproduction of the content produced in this report is prohibited without the prior permission of the publisher, Platform Executive Pty Ltd.

The facts of this report have been gathered in good faith from both primary and secondary sources. It is believed to be correct at the time of publication, but cannot be guaranteed. As such Platform Executive can accept no liability whatever for actions taken based on any information that may subsequently prove to be incorrect.

Changelog

Premium members: To request a priority update to this report, please contact us. Our standard turnaround time is normally 48 hours.

The changelog for this report can be found below, complete with the next scheduled update:

v1.1: Initial load of report
Date: 1st March 2023

Key Financials added (BETA)
Date: 17th March 2023

Next scheduled update: 29th May 2023

Industry Keywords

Related keywords:

Cloud Computing e-commerce logistics Marketplace

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