Stakeholder Analysis assignment for Amazon

Question

Task: How to prepare a Stakeholder Analysis assignment for Amazon with the goal of analysing internal and externals stakeholders?

Answer

Introduction
On this Stakeholder Analysis assignmentwe identify that the rapid growth in globalization along with the outbreak of the pandemic has generated various challenges for e-commerce platforms. These e-commerce companies are dealing with changing consumer behaviour, rising inflation rates, supply chain disruptions, growing competition and others. The purpose of the report here is to conduct a strategic analysis of the world’s largest e-commerce platform Amazon to provide specific recommendations for improving its future performance. The first two sections have focused on providing a brief company background its strategic challenges. The analysis and discussion section has focused on evaluating the company’s position by using strategic frameworks like SWOT analysis, Porter’s Five Forces Model and BCG Matrix. The third section has provided strategic recommendations for future performance of the company. Lastly, a conclusion has been provided for displaying all the significant findings from the Stakeholder Analysis assignment paper.

Firm Background
On this Stakeholder Analysis assignmentwe identify that Amazon is one of the largest technology companies selling a wide range of products and services over its e-commerce platform. The mission of the company is to offer customers with anything and everything at convenient places within shortest possible time (Amazon, 2022). The vision of Amazon is to emerge as the most customer-centric company and safest place to work in the world. It is guided by its core principles pf customer obsession over competitor focus, long-term thinking, passion for invention and commitment to operational excellence. Some of the pioneering things offered by Amazon are Prime, 1-click shopping, personalized recommendations, SWA, Kindle, Just walk Out technology and others.

Strategic Challenges identified on this Stakeholder Analysis assignment
Amazon has been facing various strategic challenges in the recent years. With the businesses reaching saturation levels, it has become difficult for the company in keeping up its e-commerce growth (Gaus, 2019). It is further expected that there might be substantial slowdown in the online segment, which would further generate an impact on consolidated revenue growth. These growth concerns are emerging in both its e-commerce business and AWS segment (Gaus, 2019). Furthermore, Amazon has been facing regulatory pushback and increased scrutiny because of its involvement in antitrust matters. It has been opined that the cloud computing services of AWS unfairly harms competitors like small software firms(Gaus, 2019). The intense government scrutiny has also been for the expansion plans and large tax breaks of the company that showed the company’s influence over policymakers. There also has been conflicts on interests with third-party merchants on its e-commerce platform as Amazon has been accused for using their proprietary data for making cheaper and private-label versions of products (Dastin, 2021). In addition on this Stakeholder Analysis assignmentwe observe that Amazon has been facing increase competition from some of the biggest US companies like Walmart and Microsoft Corporation. Thus, these challenges make it essential to gain an understanding about the strategic position of the company.

Stakeholder Analysis assignmentAnalysis and Discussion

SWOT Analysis
This is a strategic framework for evaluating resources and capabilities of a firm along with its external market situation. SWOT model assesses both internal and external environment for identifying strengths, weaknesses, opportunities and threats of the company (Madsen, 2016). Strengths indicate the internal organizational elements for reaching goals while weaknesses are known to hamper organizational success. Opportunities are external aspects enabling firms to reach their targets, addressing gaps and undertaking new activities (Benzaghta, et al., 2021). Lastly, threats are external barriers preventing firms from achieving desired goals. This strategic framework has been applied to Amazon.

Strengths- Amazon consists of a strong brand name and valuation because of being the largest e-commerce platform in the world (Sadq, et al., 2018). Its differentiation and innovation strategy has helped to improve its product lines and service offerings to the customers. The cost leadership strategy enables the firm in gaining high profits and revenues in the market with strong brand loyalty from the customers. Weaknesses-the main weakness identified on this Stakeholder Analysis assignmentis that Amazon follows and easily imitable business model that have become common in the digital market. Offering free shipping and high discounts often leads to losing margins in various areas (Sadq, et al., 2018). Amazon has very limited brick-and-mortar presence that leaves customers willing to buy physically behind. Opportunities- The strong brand position offers the advantage of venturing into new markets and introducing new products through unrelated diversification(Sadq, et al., 2018). It can expand its physical stores, undertake backward integration and engage in more acquisitions. Threats- Rising governmental regulations, controversies of exploitative labour and aggressive competition are potential threats for the company.

Porter’s Five Forces Model
This Stakeholder Analysis assignment strategic model focuses on analysing the competitive intensity of an industry in which a company operates (Dobbs, 2014). For this purpose, Porter’s Five Forces model emphasizes on five forces of buyers’ bargaining power, suppliers’ bargaining power, threat of substitution, threat of new entrants and competitive rivalry. These competitive forces help in determining the strengths and weaknesses of the particular industry alongside understanding the level of competition within it (Indiatsy, et al., 2014). Thus, this model has been applied to the e-commerce industry where Amazon operates.

Buyers’ Power- This refers to the bargaining power of buyers in driving down prices of products and services (Dobbs, 2014). Amazon already offers low prices to its customers alongside various other discounts, offers and coupons, thus, buyers do not require to lower prices. However, the large number of buyers present across the world have the ability of influencing product and service prices of Amazon (Sadq, et al., 2018). Thus, these buyers have high bargaining power in the industry. Suppliers’ Power- This indicates the suppliers’ power in driving up prices (Indiatsy, et al., 2014). Amazon consists of a small population of suppliers in the market having relatively strong force. They have the capability of increasing prices, however, the products sold are not significantly unique or different (Onyusheva&Seenalasataporn, 2018). Thus, suppliers have moderate bargaining power.

Threat of Substitution-It refers to the presence of close substitute of products or services in the market (Dobbs, 2014). Amazon sells a wide variety of products and services on its e-commerce platform to the customers. However, these products are also available in retail stores or outlets while the services are offered by various other online platforms (Onyusheva&Seenalasataporn, 2018). This increases the likelihood of customers switching to alternatives when prices increase. Thus, there is a high threat of substitution in this industry. Threat of New Entrants- This Stakeholder Analysis assignment indicator helps measure profitability of the industry attracts new firms (Indiatsy, et al., 2014). The e-commerce industry is highly profitable requiring only internet and website set-up costs without having to invest in infrastructure. This provides opportunities to various new firms in entering the industry and thereby reducing profitability share of Amazon (Onyusheva&Seenalasataporn, 2018). Thus, threat of new entrants is high in this market.

Competitive Rivalry-It refers to the presence of competitors and market attractiveness of the industry (Dobbs, 2014). Retail businesses have online presence or digital platforms alongside their physical stores for addressing online shopping behaviour (Onyusheva&Seenalasataporn, 2018). Various competitors like Walmart, eBay, Tesco and others are present. Thus, there exists strong competitive rivalry.

Stakeholder Analysis assignmentBCG Matrix
The Boston Consulting Group (BCG) growth-share matrix is a strategic tool that helps in analysing the business units of a company under four categories of stars, question marks, cash cows and dogs (Madsen, 2017). This classification is provided based on the relative market share of the SBUs and market growth rate of the industry.

Cash Cow- Business units or products with large market share in a slow and mature growth industry fall here (Hossain& Kader, 2020). The Kindle product, e-books, audio books and movies on demand are products falling under this category. These units bring revenues or cash to the company but have low growth prospects as they operate in a mature industry.

Star-These indicate business units and products with larger market share in fast growing industry (Madsen, 2017). Amazon’s online store or e-commerce platform falls here as it has high growth rate and brings the highest revenue for the company. Besides, the AWS services and cloud segment also fall under this category because of their market attractiveness and large market share. Question Mark- Business units and products with small market share in a high growth market fall here (Hossain& Kader, 2020). Amazon’s segment of video on demand has issues of poor connectivity and limited growth, which can become a question mark in the future. Here, Zappos also falls here because of its slow growth and low returns on investment after being acquired by Amazon.

Dog- These business units have small market share in a mature industry (Madsen, 2017). The retail outlets or physical stores of Amazon fall under this category as they are least competitive units in terms of market share. Here, Alexa can also fall in this quadrant as it has been showing negative market growth in the last five years.

Recommendations
On this Stakeholder Analysis assignmentwe recommend that Amazon undertake two strategies for improving its performance in the future. These are introducing agile implementation and diversification.
• Implementing agile in its processes, operations and services would be beneficial for Amazon to keep its competitors at bay. It would enable the company in delivering the products at shortest possible time to the customers with better control, improved predictability, increased flexibility, reduced risks, continuous improvement and enhanced team morale (F. Tripp& Armstrong, 2018). This would further help in offering superior quality products and services, thereby exceeding customer expectations. Thus, agile implementation can help in improved customer satisfaction, thereby leading to more revenues and profits for the company.
• Furthermore, Amazon should focus on diversification strategy for improving its future performance. The company has already gained widespread success in e-commerce market by offering a wide range of products to the customers (Bowen, et al., 2015). It can now introduce healthcare products and medicines in its range for offering them to new underdeveloped markets having little or no presence of e-commerce companies. This would help in enhancing profits of the company through new product ranges and catering to new target markets. Thus, Amazon would incur improved financial performance in the future.

Conclusion
The Stakeholder Analysis assignmentaimed at conducting a strategic analysis of Amazon and providing specific recommendations for improving its future performance. The first section provided a brief background of Amazon followed by the challenges it has been facing such as increased antitrust scrutiny, high competition and keeping up its ecommerce growth. The analysis and discussion section helped in pointing out various opportunities and threats for the company, alongside its strengths and weaknesses. In this regard, the strategic frameworks of SWOT, Porter’s five forces and BCG matrix were helpful. SWOT model was used for analysing internal and external environment of Amazon. Porter’s five forces pointed out the high competitive rivalry present in the industry, while BCG matrix analysed the business units or products of Amazon. Lastly, the Stakeholder Analysis assignmentprovided two strategic recommendations of agile implementation and diversification for improving future performance of the company.

References
Amazon. (2022). Who We Are. https://www.aboutamazon.com/about-us
Benzaghta, M. A., Elwalda, A., Mousa, M. M., Erkan, I., & Rahman, M. (2021). SWOT analysis applications:An integrative literature review.Journal of Global Business Insights, Stakeholder Analysis assignment6(1),
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Dobbs, M. E. (2014). Guidelines for applying Porter's five forces framework: a set of industry analysis templates. Competitiveness review, 24(1), 32-45. https://www.doi.org/10.1108/CR-06-2013-0059
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Hossain, H., & Kader, M. A. (2020). An Analysis on BCG Growth Sharing Matrix. International Journal of Contemporary Research and Review, 11(10).

Indiatsy, C. M., Mucheru, S. M., Mandere, E. N., Bichanga, J. M., &Gongera, E. G. (2014). The application of Porter’s five forces model on organization performance: A case of cooperative bank of Kenya Ltd.European Journal of Business and Management, 6(16), 75-85.
Madsen, D. Ø. (2016). SWOT analysis: a management fashion perspective. International Journal of Business Research, 16(1), 39-56.https://www.doi.org/10.3390/admsci9030071
Madsen, D. O. (2017). Not dead yet: the rise, fall and persistence of the BCG Matrix. Problems and Perspectives in Management, 15(1), 19-34.
Onyusheva, I., &Seenalasataporn, T. (2018). Strategic analysis of global e-commerce and diversification technology: the case of amazon. com inc.The EUrASEANs: journal on global socio-economic dynamics, (1 (8)), 48-63.
Sadq, Z. M., Sabir, H. N., & Saeed, V. S. H. (2018). Analyzing the Amazon success strategies. Journal of process management and new technologies, Stakeholder Analysis assi