Discusss about the Market and Product Analysis of Amazon in India.
In this report the global company which is chosen for analysis is Amazon.com, Inc. The country which is chosen for discussion is India. Amazon.com is based in Seattle, Washington and the company was founded by Jeff Bezos in 1994. Amazon .com is a cloud computing and electronic commerce company. The company was launched as an online bookstore initially. The company entered the Indian market in 2013.India had billion plus population and 65 percentage of India’s population is under the age of 35. This huge number of youth populace in India and rising amount of purchasing power of people in the rapidly developing country lured Amazon to begin its operation in India. The company produces consumer electronic good, the most popular in India being Kindle e-readers. The electronic goods market in India is one of the largest in the world and it is estimated that this market will reach a value of US $ 400 billion by 2022.In India the current e-commerce market for Amazon is huge and the product lines that are available to customers are car and mobile accessories, camera and photography, home and kitchen appliances, computer and accessories and many more. In this report SWOT analysis of Amazon in India will be done. SWOT analysis enables an organization to understand its internal strength and weakness and analyze opportunities and threats posed by the macro environment. Amazon started in India in 2012 and since then it has come a long way. The SWOT analysis of Amazon is made with reference to India .Amazon would require to constantly adapt its business model to suit the Indian market as India is a rapidly developing country and the business model or product needs that will suit the Indian economy will be different from that of a developed country(Reddy and Divekar 2014).
Swot Analysis Of Amazon With Respect To India
Importance of SWOT
Every business functions within micro and macro environment .The strengths and weakness of an organization is analyzed using SWOT. The strengths and weakness are internal factors of an organization and opportunities and threats and exposed by the external environment of an organization. The purpose of the SWOT analysis is to make leverage of external opportunities utilizing the internal strength of an organization and to minimize the threats of external environment by focusing to improve on its weakness (Rothaermel 2015).
STRENGTH OF AMAZON WHICH IS AN INTERNAL FACTOR
1) Being Pioneer of e-commerce segment in the United States ,Amazon already possess the business intelligence and skills required for expansion in India
2)A huge product line which includes Kindle, home and kitchen appliances ,mobile phone accessories,
3) The company already has the financial strength for expansion in a new market like India
WEAKNESS WHICH IS AN INTERNAL FACTOR
1) In order to expand in India ,AMAZON needs to build a robust supply chain for which Amazon has to constantly tie-up with the small shop owners and partner with them
2) Amazon needs to develop a network of deliverers for which the company should have a good logistics system and tie-up with India post and cargo airline Blue Dart
3)It is very difficult for Amazon to operate in a new market like India ,Amazon needs to constantly focus on market research to build tailor-made strategies suitable to serve Indian market
OPPORTUNITIES OF MACRO ENVIRONMENT
1) Billion plus populace of India with huge percentage of youth population,65 % of population under the age of 35
2)Rising disposable income of people in the country
3) Demand of consumer electronics good is huge market value is estimated to be around US $ 400 billion by 2020.
THREATS OF MACRO ENVIRONMENT
1)Huge percentage of rural population who do not get access to internet
2)People of India still rely on cash more than cards and prefer to buy from physical stores rather than online purchase
3) FDI policy of the country and competition from local e-commerce giants like Flipkart, Snapdeal.
Table of SWOT Anaysis of Amzon in India
Market Size And Growth
The market value of consumer electronics goods in India was US $ 69.6 billion in the year 2012.So the consumer goods market has projected a compound annual growth rate of 24.4 percent from 2012-2022.
The market leaders of consumer electronic goods in India are Mirc Electronics Ltd, Videocon Industries Limited, Sharp India Limited ,BPL limited .The consumer electronic goods segment has many foreign players like Sony ,LG and Samsung ,Oppo, Vivo ,Apple sells smart-phones in the country .
Concerntration And Distribution
Consumer electronic goods are sold by companies like Reliance Digital which sells consumer products of LG, Sony and many more brands in one store. Apart from these physical stores consumer electronics goods are sold online in e-commerce sites like Amazon, Flipkarts (Mishra and Kotkar 2015).
Findings (Explanation Of Swot Table)
India is a rapidly developing country and the external environment of the country had many opportunities and threats for market expansion of Amazon (Bhansali and Bhattacharyya 2015).
Opportunities of External Environment linked with internal Strength –The Indian market has more than 65 Percentage of youth population and this huge population is under working age. The disposable income of youth is increasing in the country and the rising purchasing power of youth makes it easier for Amazon to penetrate into Indian market .The youth of India are influenced by the western culture and their hectic work schedule compels them to rely on electronic gadgets. The Indian population has access to the internet and the new trend in the country is to buy electronic goods online as goods are available at a cheaper price in e-commerce sites like Amazon as compared to physical stores. Also home delivery of products and payment by cards make the purchasing experience effortless for Indian customers. Amazon can leverage its internal strength of business process intelligence to capture e-commerce market of India (Gangeshwer 2013).
The internal weakness of Amazon, threats of external environment and how Amazon converted this weakness into strength.
India has a huge percentage of rural population who do not have access to internet. Physical stores in India, that means owners of small business are protected by the strict Foreign Direct Investment policy of the country which poses restriction for multi-brand retailers like Amazon (Malhotra 2014 ).To combat against this threat of external environment Amazon converted its internal weakness to strength by launching the Amazon Chai Cart team that travelled to cities and partnered with small business owners by offering them Chai or tea and teaching them the virtue of e-commerce. Thus Amazon had many suppliers soon and delivery logistics was built by tie-up with Blue Dart and India post. The Chai Cart team reportedly traveled more than 9,400 miles across 31 cities and engaged with more than 10,000 sellers (Laudon, Kenneth and Carol Guercio Traver 2013).
Market Segmentation And Target Market
In this section, a new product for Amazon in the consumer goods section is suggested. The new product that Amazon can sell in the consumer goods section will be a smart phone that would not require a battery.
This new product can target multi-segments of the Indian market as the new technological innovation will serve the needs of the billions of people in India who need to charge their smart phones twice a day or need to carry power bank to charge their devices. Batteries of smart phone are damaged often due to overcharging and the need of a phone without a battery is huge.
India has one of the largest and fastest growing smart phone markets in the world and soon this technology will be implemented by many market leaders like Samsung or Apple .Amazon can utilize this untapped opportunity be selling a smart phone without battery on its e-commerce site and targeting a multi-segment population of India ranging from youth to old rich to middle class
New Product Description
The new smart phone will be without a battery and would run by harvesting energy from radio-signals or light and would require almost zero power. Researchers of University of Washington have already tested the prototype of this phone. The prototype lacked data connection or touch screen and could be used to make calls. Radio waves from the base station and electromagnetic vibrations that will be generated in the phone’s diaphragm when the speaker uses the phone’s microphone will enable it to make call .This new technology has been tested and it will be possible to soon implement this technology in reality.
The price of the Phone will be within the reach of Indian customers as smart phones are very popular in India and people are ready to invest money to buy phones. Market skimming price will be introduced in the beginning followed by market penetration.
Smartphone makers of the world are constantly focusing on development of new technology and soon this type of product will be launched by mobile brands like Samsung, Apple, HTC etc .Amazon can sell these products from these brands in its online platform (Osterwalder et al., 2014).
Once this new technology is introduced in the market ,it will be promoted by all major mobile phone brands like Samsung and Apple using both Above the line sales promotion strategy like mass advertisements ,radio ,newspapers or Below the line sales promotion strategy. Amazon can promote the brand online using digital technology and digital platforms like social media sites of Facebook and Twitter (Khan 2014).
Customer Value Proposition
The perceived value of the product in the mind of customer is analyzed (Martelo Landroguez et al., 2013).
Smart phones are required by the 65 percentage Indian youth for almost everything. In India internet is accessed more via smart phones than by laptops or computers. The huge youth population requires smart phone for almost everything like internet surfing, using apps for reading news ,books etc making calls on Skype or staying active in social media like Facebook or Twitter .So it is frustrating for everyone when battery of their smart phone is exhausted(Arpit and Anand 2013).
This market need gap will be met by the introduction of battery-free smart phones powered by radio waves. Customers will not have to face any disruption in their usage of smart phones and the new technological innovation will enable them to have a seamless connection with their smart phones throughout the day (Ding et al., 2013).
Justification of the choice of the new product
The product will be battery free and will be powered by radio waves which will satiate the needs of power hungry smart phones of billions of Indian population
The smart phone users in the Indian market are around 300 million. India is a rapidly developing country and the developed countries have mature markets .Amazon can sell battery free smart phones and meet the power-hungry needs of the smart phones of millions of India populace ( Shahzad and Alwagait 2013).
Strength and Opportunity linkage (S-O)-The internal strength of the new battery free phones powered by radio signals can be leveraged by meeting the needs of power-hungry smart phones of millions of Indian users (Vishwakarma, Maurya and Govil 2013).
Weakness and Threats of this new product will be development and commercialization of the new technology and threats could be improvement of infrastructure of India to make this phone popular (Sarbah and Otu-Nyarko 2014|).
Arpit, L. and Anand, B., 2013. A Study into the Usage Pattern of Smartphone Owners among Students and Service Class. International Journal of Engineering and Management Science, 4, pp.187-192.
Bhansali, G. and Bhattacharyya, S., 2015. Dynamics and prospects of E-Tail business in India: A qualitative study. South Asian Journal of Marketing & Management Research, 5(5), pp.36-46.
Ding, N., Wagner, D., Chen, X., Pathak, A., Hu, Y.C. and Rice, A., 2013. Characterizing and modeling the impact of wireless signal strength on smartphone battery drain. ACM SIGMETRICS Performance Evaluation Review, 41(1), pp.29-40.
Gangeshwer, D.K., 2013. E-commerce or Internet Marketing: A business Review from Indian context. International Journal of u-and e-Service, Science and Technology, 6(6), pp.187-194.
Khan, M.T., 2014. The concept of'marketing mix'and its elements (a conceptual review paper). International journal of information, business and management, 6(2), p.95.
Laudon, Kenneth C., and Carol Guercio Traver. E-commerce. Pearson, 2013.
Malhotra, B., 2014. E-Business: Issues & Challenges in Indian Perspective. Global Journal of Business Management and Information Technology, 4(1), pp.11-16.
Martelo Landroguez, S., Barroso Castro, C. and Cepeda-Carrión, G., 2013. Developing an integrated vision of customer value. Journal of Services Marketing, 27(3), pp.234-244.
Mishra, S.V. and Kotkar, S.N., 2015. A Study on Current Status of E-Commerce in India: A Comparative Analysis of Flipkart and Amazon. International Journal of Advance Research in Computer Science and Management Studies, ISSN, 2327782.
Osterwalder, A., Pigneur, Y., Bernarda, G. and Smith, A., 2014. Value proposition design: How to create products and services customers want. John Wiley & Sons.
Reddy, N.A. and Divekar, B.R., 2014. A study of challenges faced by e-commerce companies in India and methods employed to overcome them. Procedia Economics and Finance, 11, pp.553-560.
Rothaermel, F.T., 2015. Strategic management. McGraw-Hill Education.
Sarbah, A. and Otu-Nyarko, D., 2014. An Overview of the Design School of Strategic Management (Strategy Formulation as a Process of Conception). Open Journal of Business and Management, 2(03), p.231.
Shahzad, B. and Alwagait, E., 2013, December. Smartphone's popularity measurement by investigating twitter profiles. In Information and Communication Technologies (WICT), 2013 Third World Congress on (pp. 347-350). IEEE.
Vishwakarma, M.L., Maurya, S.L. and Govil, S., 2013. Use of mobile and wireless technology in Indian libraries. International Journal of Engineering and Computer Science, 2(6), pp.1799-180