Tuesday, 22 March 2022

Why amazon is so successful?

 Amazon was established in 1994, and till now, it is known to be the top ecommerce company not only in USA, but in the entire world. The company is popular as best retailer Ecommerce Company. But what is the reason behind the success of the Amazon? Off course, it is its strategy that has made the Amazon one of the top successful company in USA as well as the best ecommerce company.

Now the question arises, what is the strategy of the company? Here in this guide, we will discuss about the strategy of the amazon company and will find out how this strategy is making the company reaching the top of the industry.

What is the strategy of Amazon Company?

  The primary strategy that is giving the wings to the success of the company is the Cost strategy. This ecommerce company focuses on delivering the high quality product at the most competitive price. Along with the cost strategy, the company is also utilizing mixture of many more strategies including the marketing strategy, and many more. The customer oriented strategy is also the major reason for the success of the company. The amazon company is reported to be primarily customer oriented. They are known for keeping their customers on high priority and hence attracts most of the customers. Also, the amazon company is popular for tailoring the user experiences and the customer service customized for each and every customers as per their interest based on their search. And, thus ensures that every customer is getting the tailored and best customer service.     

SWOT analysis is probably the best method for analyzing the success of the Amazon company. With the help of the SWOT analysis, it is possible to analyze the possible strengths, weaknesses, opportunities, as well as the threats to the company. Following is the elaborated SWOT analysis of the Amazon company in order for analyzing its success:

Strengths of the Amazon company

Brand Loyalty

The first strengths of the amazon company are its brand loyalty. The brand loyalty is known to be the spine for the success of the company. It received with time, and the Amazon company is having a big number of loyal customers who prefer shopping from Amazon only.

Cost Leadership

The primary strength of the Amazon company is that it offers the most competitive price. The product’s price at Amazon is reported to be less in comparison to the competitors and thus they gain competitive advantage over the others. This is also one of the major factor for the amazon company to gain success in such a small period.

Leveraging IT technology

 Though the use of IT is not quite popular in all the companies, but Amazon is among the first companies to leverage the IT platform and the IT technology in order for promoting and operating their brand. This is also one of the reason for the amazon to gain the popularity and the competitive advantages. Further, the amazon is known for using the highly advanced technology for making their platform most responsive as well as offering the best customer service.

Customer Oriented strategy

Another major reason for the success of the amazon company is their customer oriented strategy. The company is known for placing their customers on priority. With their strategy, they ensures to listen all the customers, making all the customers feel special, customize the customer service as well as user experience for each and every customers ensuring the to get the best service. This is all that attracts the customers to this ecommerce platform.

Wide product range

Another best strength of the amazon company is that it offers the wide product range. Instead of selling a particular niche, they are dealing with a wide range of products. Instead, they are selling almost every daily use product from the clothing to home accessories, cleaning and utility products and many more.

Weaknesses

Not so good place for retailers

The amazon company operates on zero profit margin that resulted in low margin to the retailers as well. This is the reason why amazon is not considered as the great place for the retailers.

Less revenue

As the amazon company operates on zero margin, it causes them company to work in very less profitability. Though the revenue generation is high for amazon, still they are not making the meaningful profit. 

Free shipping

Amazon have now started offering the free shipping services to the customers as well. This is also a big threat for the amazon company to loss their margin and might generate no revenue from their business model.

Single minded retailing platform

The amazon is a single minded retailing platform and this concept of single minded retailing is also hindering the expansion of the company.

Opportunities

Own brand products

Currently, the company is selling the products from the third party only. The company can leverage the opportunity to start selling their own brands product. The company is already having a big market, starting their own brand will not only increase their revenue generation, but will favour their marketing as well as peoples will have more trust on the amazon’s product.

Threats

Competition

Growing competition is the major threat to the amazon company. Now there are many companies emerged in the ecommerce platform as well and these are stealing the customers of amazon.

The bottom line

So these are the major strengths, weaknesses, opportunities, and the threats of the amazon company. Basically, the cost leadership and the customer oriented strategy along with wide product range is the reason for the success of the company. 

 

 

 

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