Essay: Amazon's Journey From Startup To World Phenomenon And Suggested Product For Startups.

The Origin and Growth of Amazon

Question:

Discuss about the Marketing Report Amazon.

Amazon was founded by Jeff Bezos who was an entrepreneur in 1994. The business began from Jeff Bezos garage, later Nick Hanauer and Tom Alburg made some supplementary investment (D'Onfro, 2014). With the added investment, Bezos come up with a more user-friendly website currently used by millions of people. Various products were added to the website as the number of clients grew. Later, through the various ides of Bezos there was another implementation that enabled clients to write and post their book reviews. The idea was successful, making Amazon   a successful venture (Schneider, 2017). In 1997, Amazon decided to go public hence the addition of a variety of products on their site. The products included CDs, movies and toys. In the year 2001 Amazon experienced financial loss and laid off over1000 employees (D'Onfro, 2014). Despite the loss Bezos never despaired hence implementing an idea of working with other sellers to market their goods through Amazon's website. Through this idea Amazon was able to get back on its initial track. Amazon is now a world phenomenon through hard work and persistence. To boost efficiency, these studies suggests the introduction of an application that can be used by Startups in the US to market their products.

Features of the Suggested Product

The suggested product will be used by the startups in the US to market their products to the Amazon online community. The companies will be able to distribute and market their products through this application. The program will have pages that are customized, a marketing package that is comprehensive, streamlined experiences, and a full access to the Amazon’s global networks. The product will help startups to sell their products and overcome new product challenges.

Threat of Substitutes

Even though e-commerce has advanced, there is often the existence of threat of substitutes from the physical world. The ancient mortar and brick stores gives the client the know how that is nearly impossible to understand in the online technological world. For instance, in a boutique a client tries the cloth on before purchasing it (Greenspan, 2017). The activity that cannot be found on Amazon. Also, Amazon is unable to offer real time client services like the brick and mortar. Not only does the threat of substitutes come from the physical globe but also from the technology world (Greenspan, 2017). Amazon can never compete with specialty online stores as much as it provides various products. Since Amazon needs to maintain its look and feel, it cannot customize its website to display and help the customer in making purchasing decision, Amazon will always be out beaten by specialty stores.

New Entrants

Today, there are challenges for the entry of two largest Amazon’s businesses, e-readers and online selling. Amazon is the 800-pound gorilla in the online selling space with sales three times higher than staples (Khalid, 2012). Amazon has a wide brand familiarity and supplements its online storefront with a wide network of more than 50centers of distribution globally. E-books or books traded via Amazon’s proprietary Kindle technology are the largest sources of development with a few number of competitors (Khalid, 2012). For the very first time in the history of Amazon, sales of Kindle eBooks were more than hardback and paperback sales. HP, Samsung and Apple companies have technological inventive history that offers competitive podiums for eBooks evolution and emergence creating competition for Amazon.

Features of the Suggested Product

Research and Development:

Research and development has led to implementation of features of client’s experience like Wish list and Listmania (Parnell, 2013). This feature enables the client get the desired good and establish the most valued goods that they need. The field of Research and Development has also let to breakthroughs in the production of products like Kindle, which has brought change in the publishing sector enhancing the company's competitive advantage. Despite the benefits brought by R&D department, companies like Sony and Barnes and Noble also offer the same services (Parnell, 2013).  Netflix and Google also provide same technology which have similar features to Wish list and Listmania which make the clients suggestions based on the past purchases or searches. These innovations are expensive in terms of R and D spending, in terms of the construction of the products and expertise needed to upgrade and enhance search algorithms (Parnell, 2013).  The products and features built by the R&D area focus at enhancing the experience of the client and improve customers shopping on the site.

Organizational Culture:

Values such as frugality, leadership and bias for action, are emphasized when revisiting Amazon standards (Adamkasi, 2015). Amazon treasures the company's culture which outlines the company’s capability to use resources effectively and apply changes quickly.  However significant, Amazon values are not scarce as other firms also have standards which emphasize on the effective utilization of resources and leadership (Adamkasi, 2015).  The organization's values, strives to enhance the experience of the client through empowerment, skills exhibition and efficient utilization of resources. This has made Amazon to be considered as the industry leader.

SWOT can be described as strengths, weaknesses, opportunities and threats. The process of identifying external and internal factors that can influence the organizations future achievements, by the management group is called SWOT analysis (Jurevicius, 2017). Internal factors include strengths and weaknesses, whereas external factors are opportunities and threats of a company (Jurevicius, 2017). SWOT analysis is performed generally as part of business planning process whereby operational and fiscal goals are determined for the forthcoming years and strategies are laid to achieve these goals.

SWOT TABLE

The table below illustrates Amazon SWOT analysis.

Source: (Jurevicius, 2017)

Electronics industry in the US produces and distributes televisions, stereo components, telephones, calculators, alarm clocks, video cameras, VCRs, digital cameras, MP3 players and DVD. Also, a number of industry observers also have laptop PC and desktop (Hong, Bhattacharyya and Geis, n.d.). Unnecessary to mention, but consumer electronics is huge venture. In the U.S., in the year 2005 customers used over $76 billion on the purchase of electronics (Hong, Bhattacharyya and Geis, n.d.). The industry has designers, engineers, salespeople, marketers, finance gurus and customer service reps as employees. The workers are responsible for improvement of similar goods and establishing big next must have gadgets (Hong, Bhattacharyya and Geis, n.d.).  The companies offering these products will stand a good chance to succeed if they get a platform where they can sale their items. There are various careers in the U.S created by the industry despite the fact that the gadgets are manufacture in India. Opportunities exist patterning technical side such as quality assurance engineers, IT professionals, electronics and software engineers, manufacturing design engineers and industrial designers. Any person who can design a marketing campaign, write marketing copy, close a distribution deal and assist confused client comprehend a complicated product, consumer electronics industry is the place to be.

Challenges Faced by Amazon: Threat of Substitutes and New Entrants

One can get big income at multinational corporation such as Mitsubishi or Samsung through the same opportunity (Leheyda, n.d.). Also, one can start their own electronic shop in one market niche or the other. Therefore, before settling for any job examine whether like the resources and structure of a large firm of like the cutting-edge spirit and flexibility of a small organization (Leheyda, n.d.). Opportunity seekers should understand that consumer electronics are worldwide brands therefore, most of the industries have chances for global posts and travel, hence the need for foreign language skills (Leheyda, n.d.). Although there is concentration of consumer electronics jobs in the U.S in the West and East Coasts the industry is all over the nation. The large firms have plenty of offices with every office housing separate corporate function and product line.

Additional Insights for the Consumer Electronics Stores Industry

IBISWorld noted 250 major success factors for a venture. The key factors for the Consumer Electronics Stores Industry are:  Key markets Proximity, control stock ability and skilled labor force (Cosley, 2015). IBISWorld analysts also notes how external aspects like Percentage of services and income per capita disposable in the Consumer Electronics Stores industry influence its performance.

Strengths

In the developed economies like the US, Amazon has a solid existence. Today Amazon offers over20 million products with 21,000 sellers (Pratap, 2017). With the existence of developing markets is an advantage with will contribute to long-term development opportunities of the company. There are several segments that Amazon has gained from (Pratap, 2017). These include, Amazon Kindle and Amazon Web Services. Amazon Kindle is termed as innovatory by reviewers. Amazon Web Services provides over 517 services and features which are innovative in nature (Glanert, 2012). Amazon’s competency and experience in terms of marketing and developing goods and services is a strength which when capitalized has positive impacts on the development opportunities of the business.

Weaknesses

Amazon has a thin profit margin which cannot maintain its leadership strategy cost. Low profit margin and lack of profitability focus renders the business defenseless to external crises and shock and other market dynamics. Low profit made by Amazon have negative impacts on cash reserves and liquidity levels (Pratap, 2017). Due to changes in the external environment, Amazon may be unable to pass the low demand phase for its goods and services.

The Amazon website should aim at a wide target audience especially those with interest in shopping via the internet. To do so effectively, the company should adopt the program that will help the startups in the US’ consumer electronic industry to sell their commodities. The goods provided should suggest that they target clients of all ages (Bellew, 2017). The site should also allow the computer illiterate to access it. Amazon launches the first world smart, microwave to reuse and erase notebook, download the app for iOS or android and flash notes to Evernote, Dropbox, Box, iCloud, email and Google docs (Bellew, 2017). Reuse and erase the notebook 4 times. Amazon should introduce the first world smart microwave for erasing notebooks. Rocketbook Wave offers liberty of paper notebook and traditional pen.

Research and Development

Amazon marketing strategy incorporates several forms of media and print adverts, experiences, events, and sales promotion, direct marketing techniques and public connections. Therefore, what recommendations could assist Amazon.com much better than they are today? Amazon must continue pushing the sector into an era of cloud-computing by continually being innovative (Bellew, 2017). Amazon should also work hand in hand with other large retailers, to enhance the usage of Amazon's software in their site so as to boost their revenues. Amazon should also try and get other retail stores or manufacturers for the product sales. This will assist in getting the US demographic market share (Bellew, 2017). Amazon also requires to enhance its network so that travelers can access their accounts wherever they go and be able to download them at any time they require them. The competition is stiff therefore Amazon should not lose sight of their passion and goals because other companies given a chance will grab the markets away from Amazon. The following are some of the strategies that can be used to market the proposed Amazon product

Advertising

Amazon should utilize media and print advertising as its main marketing strategies to pass its marketing information to the target client niche (Glanert, 2012). Amazon should also collaborate with various TV channels, magazines and journals worldwide for this advertisement. Amazon also can apply creativity which can lead to publications of catalogues (Sellics, 2017). Amazon can also come up with images and pictures in their catalogues through the assistance of graphic artists this will enhance selling of their goods (Bhasin, 2016). Also, images and photos are cost effective which saves money and improve the appearance of catalogues. For the purpose of brand awareness viral marketing and social media advertisements can also be employed especially video clips.

Sales Promotion

Amazon can frequently use sales promotions through coupons, reduction of price seasonally and special offers. (Ferguson, 2017) The current promotional sales should be advertised through Amazon website. There should also be discounts for customers who buy a certain number of goods. Amazon should also offer trips and free training to their loyal clients.

Conclusion

Amazon is a successful company, that has developed from small web based book retailer to a successful firm trading everything from clothing to music to books. Amazon has placed itself as cost effective alternative to mortar and brick firms that retail similar products. Through economies of scale leverage Amazon has kept supplier pressure at bay hence getting and increased large consumer sales share. Amazon is experiencing stiff competition from retail and online base organizations like Wal-Mart and overstock.com. Therefore, in order for Amazon to offer high standard customers experience it needs to refine its competitive offerings. For Amazon to be successful it is required to develop a product that will provide a platform on which startup companies in the US can launch and sell their new products.

References

Adamkasi, (2015). PESTEL Analysis of Amazon. [online] Free PESTEL Analysis. Available at: https://freepestelanalysis.com/pestel-analysis-of-amazon/ [Accessed 3 Apr. 2017].

Bellew, J. (2017). Strategy Recommendation Project Final. Master Degree. Capella University.

Bhasin, H. (2016). Marketing mix of Amazon - Amazon marketing mix. [online] Marketing91.com. Available at: https://www.marketing91.com/marketing-mix-amazon/ [Accessed 3 Apr. 2017].

Cosley, J. (2015). New Insights: The Consumer Journey For Electronics. [online] Search Engine Land. Available at: https://searchengineland.com/new-insights-consumer-journey-electronics-237128 [Accessed 3 Apr. 2017].

D'Onfro, J. (2014). 14 Quirky Things You Didn't Know About Amazon. [online] Business Insider. Available at: https://www.businessinsider.com/amazon-jeff-bezos-facts-story-history-2014-5?IR=T [Accessed 3 Apr. 2017].

Ferguson, E. (2017). Amazon.com Inc.’s Marketing Mix (4Ps) Analysis - Panmore Institute. [online] Panmore Institute. Available at: https://panmore.com/amazon-com-inc-marketing-mix-4ps-analysis [Accessed 3 Apr. 2017].

Glanert, M. (2012). Amazon's Marketing Techniques - Behavioral Targeting Blog. [online] Behavioral Targeting Blog. Available at: https://behavioraltargeting.biz/amazons-marketing-techniques/ [Accessed 3 Apr. 2017].

Greenspan, R. (2017). Amazon.com Inc. PESTEL/PESTLE Analysis, Recommendations - Panmore Institute. [online] Panmore Institute. Available at: https://panmore.com/amazon-com-inc-pestel-pestle-analysis-recommendations [Accessed 3 Apr. 2017].

Hong, A., Bhattacharyya, D. and Geis, G. (n.d.). The Role of M&A in Market Convergence: Amazon, Apple, Google and Microsoft. SSRN Electronic Journal, 20(1), pp.15-45.

Jurevicius, O. (2017). Learning from Amazon’s Advantage – 2017 SWOT Analysis. [online] Strategic Management Insight. Available at: https://www.strategicmanagementinsight.com/swot-analyses/amazon-swot-analysis.html [Accessed 3 Apr. 2017].

Khalid, T. (2012). External Factors Evaluation Matrix of Amazon.com | Amazon.Com. [online] Scribd. Available at: https://www.scribd.com/doc/90866697/External-Factors-Evaluation-Matrix-of-Amazon-com [Accessed 3 Apr. 2017].

Leheyda, N. (n.d.). Market Power, Multimarket Contact and Pricing: Some Evidence from the US Automobile Market. SSRN Electronic Journal, 10(1), pp.50-53.

Parnell, Z. (2013). Amazon.com - External and Internal Competitive Analysis. [online] Zacharyparnell.com. Available at: https://www.zacharyparnell.com/2013/08/amazoncom-external-and-internal.html [Accessed 3 Apr. 2017].

Pratap, A. (2017). Amazon SWOT Analysis 2016 - strengths and weaknesses. [online] Cheshnotes. Available at: https://www.cheshnotes.com/2016/10/amazon-swot-analysis-2016/ [Accessed 3 Apr. 2017].

Schneider, L. (2017). Understanding Amazon.com's History and Corporate Culture. [online] The Balance. Available at: https://www.thebalance.com/amazon-com-company-research-2071316 [Accessed 3 Apr. 2017].

Sellics. (2017). Amazon Marketing Methods: A Complete Overview [Infographic]. [online] Available at: https://sellics.com/blog-overview-amazon-marketing-advertising [Accessed 3 Apr. 2017].