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Amazon.com, Inc. (SWOT Analysis) - December 2012

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“SWOT is an acronym for the internal Strengths and Weaknesses of a firm and the environmental Opportunities and Threats facing that firm. SWOT analysis is a widely used technique through which managers create a quick overview of a company’s strategic situation. The technique is based on the assumption that an effective strategy derives from a sound “fit” between a firm’s internal resources (strengths and weaknesses) and its external situation (opportunities and threats). A good fit maximizes a firm’s strengths and opportunities and minimizes its weaknesses and threats. Accurately applied, this simple assumption has powerful implications for the design of a successful strategy.”

Amazon.com, Inc.

Amazon.com, Inc. (Amazon or ‘the company’) is one of the leading global online retailers. It offers a wide range of merchandise, including books, apparel, electronics and home improvement products through its website www.amazon.com. Amazon also operates through various international websites. The company has operations in North America, Europe and Asia. It is headquartered in Seattle, Washington, and employed about 56,200 people as of December 31, 2011.


Strengths, Weaknesses, Opportunities and Threats (SWOT)

Location of Factor

TYPE OF FACTOR

Favorable

Unfavorable

Internal

Strengths

  • Largest online retailer
  • Extending product line and strengthening technical platform through strategic acquisitions
  • Kindle builds strong presence in the eBooks space

Weaknesses

  • Patent infringement issues affect stakeholder confidence
  • Frequent outages of Amazon's web hosting and cloud computing servers

External

Opportunities

  • Increase in online retail sales
  • Growing emphasis on online display advertising business
  • Growing eBook and tablet sales

Threats

  • Increasing pressure to collect sales tax on merchandise sold through online websites
  • Intense competition in the e-reader market
  • Risk of foreign exchange fluctuation
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