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Since its establishment, Amazon has a history of investing in emerging opportunities. In the early 2000’s, a trend in e-readers emerged and there was only one player in this new market and that was Sony readers. Amazon decided to set foot in this market and launched its first kindle model in 2007, which was an attempt to meet the unmet demands. Over the years, Amazon made modifications to the kindle and in 2010, their product market plummeted due to an up rise in competition.
In 2011, Amazon launched its second model, the Kindle Fire in attempt to undermine the current table market.
The Kindle Fire has custom features and retails at a low price of $199 compared to other products in this market category. This tablet has enhanced e-reader features and functions that attracted tablet buyers with its comparable tablet features. The Kindle Fire offers is; access to Amazon App-store, TV shows and movie streaming, downloading games, as well as being the best e-reader. “In a little over three months, Amazon had sold nearly 5 million Kindle Fire and had captured half of the non-Apple tablet market share” (Hitt, 2017, p.
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C-13). This device is superior to Apple, Samsung and Nook products in terms of customization, price, longer battery life, and its access to a large online e-book store.
Technologic advancement is a big factor that influences the tablet industry. The rapid change in technology presents both threats and opportunities. With the frequency of technological advancements, it is important for Amazon to keep its Kindle Fire up to date because more and more people are doing their shopping online on their tablets and smartphones.
New technology improves performance based on increased IT efficiency and maximizes innovation for new tablet features.
The demography of tablets users greatly affects this tablet industry. Factors such as level of education, age, number of family members, and social class matter greatly. For the Kindle Fire, the major demographic game changer is the age of buyers. Initially, it is targeted at the older generation, but it is embraced in the millennial generation.
Additionally, economic changes profoundly affect the Kindle Fire. Some of the macroeconomic factors that influence the tablet include consumer spending, increasing disposable income in developing nations, and the economic stability of developed countries and markets. Economic stability in developed markets promotes the growth of Amazon’s retail business because of minimized risks. Conversely, poor economic conditions mean most people are saving and effect of unemployment.
A huge cooperation like Amazon operates within political/legal trends. Different government decisions influence the market and finance of the industry. For instance, increased government support for e-commerce positively influences amazon online retail business. Amazon could grow under such government policies. It is also important to note that such government policies, the new entrance will increase competition. Political stability is another factor that determines that growth trends of Amazon’s customer base.
Social conditions also influence Amazon’s Kindle Fire. Some of the social cultural changes and trends that influence the market for the Kindle Fire include increasing wealth disparity, increased online buying habits, and increased consumerism in emerging markets. Increasing wealth disparity between the different social classes is a threat because it may lead to stagnation of disposable income and influence buyers. However, increasing level of consumerism and increasing e-readers demands are opportunities. Amazon can profit from through expanding.
Environmental awareness on issues such as global warming and reduced pollution also affect Amazon.com. Issues such as reduced travel and more shopping online positively influence the company. This is because publishers are choosing “green option”.
A number of aspects of Amazon’s marketplace business will be impacted by climate change and by public opinion of climate change. For example, Amazon could very well be scrutinized for its need for vast amounts of transportation resources and packing materials. Also, as the company continues to develop and produce more and more private label products, the public may consider the environmental cost of producing those products. Likewise, the various suppliers and sellers utilizing the Amazon marketplace could face similar challenges.
There are a variety of opportunities available to Amazon.com Inc. In the SWOT Analysis model, this aspect identifies the external strategic factors that the firm could use to grow its business. Amazon has the following opportunities related to the e-commerce market: penetrate developing markets, expand brick-and-mortar business, and boost measures to reduce counterfeit sales. Amazon faces a number of significant threats in the online retail market. External strategic factors that reduce business performance are considered in this aspect of the SWOT Analysis model. Amazon.com Inc. must address the following threats in the online retail industry environment: cybercrime, imitation, and aggressive competition with large retail firms. Amazon.com Inc.’s e-commerce success relies on its notable strengths.
In the SWOT Analysis model, this aspect enumerates the internal strategies factors that the company uses to grow its business. The following strengths support the success and ongoing growth of Amazon: strong brand, extensive product mix, and highest revenues in the industry. Amazon’s weaknesses present challenges that limit its e-commerce business. This aspect of the SWOT Analysis model outlines the internal strategic factors that impose difficulties in growing the business. In the case of Amazon, the following weaknesses are most significant: easily limitable business model, limited penetration in developing markets, and limited brick-and-mortar presence. Amazon.com Inc. has the necessary strengths to continue its e-commerce dominance. However, the company faces variety of concerns. For instance, Amazon has limited presence in developing markets (Greenspan).
The strategy that appears to be the most beneficial is the blue ocean strategy. Being able to identify and analyze rival’s weakness is a major advantage to Amazon because, with every innovation, there will always be flaws in the models and strategies of competitors. In addition, Amazon also has the option to use a hybrid strategy which is a combination of the platform strategy and the blue ocean strategy.
Amazon must perform the following steps to reach these targets. To begin, vertical integration should be used because of the flexibility and compatibility with the advancing needs in the table industry. Following that, a team of tech experts should be assembled who will analyze and innovate these devices. Finally, focusing on the features of the tablet readers. The focus of the device is to eliminate costs by developing differentiated products that do not have the common features such as a camera, Bluetooth, and GPS. Furthermore, focusing on reducing the screen size and storage capacity while raising the durability, lightweight, speaker quality, and screen clarity.
M09 Case Analysis 1 Kindle Fire: Amazon . (2022, Jun 05). Retrieved from https://studymoose.com/m09-case-analysis-1-kindle-fire-amazon-essay
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