Kindle Fire: Amazon's Heated Battle for the Tablet Market SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Sales & Marketing
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Kindle Fire: Amazon's Heated Battle for the Tablet Market
This case is intended to illustrate to readers the challenges faced in 2011-2013 by Amazon's CEO, Jeff Bezos, as he guided his company into the exploding tablet market. Faced with the tough decision between focusing on the e-reader market-which Amazon had come to dominate with its Kindle product line-and making a foray into tablets-for which it had no expertise-Bezos chose the latter. Amazon sought to combine platform assets to create an end-to-end experience that would let users find a "sweet spot" in the mix of features and services. This strategy involved critical decisions such as selecting a customer segment to target and a positioning for the new product, dubbed the Kindle Fire, as the tablet market rapidly evolved. The Kindle Fire was designed to put the full Amazon experience right into the laps of customers, and Bezos was betting that his customers would see the Kindle Fire as the physical manifestation of all things Amazon. To achieve this, Amazon was willing to heavily subsidize the Kindle Fire hardware device. The key assumption was that the superior end-to-end experience Amazon had carefully created would lead to incremental purchases of content as well as physical products and services, and the margins thus gained would outweigh the hardware subsidy.
Authors :: Mohanbir Sawhney, Joseph Owens, Pallavi Goodman
Swot Analysis of "Kindle Fire: Amazon's Heated Battle for the Tablet Market" written by Mohanbir Sawhney, Joseph Owens, Pallavi Goodman includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Kindle Amazon facing as an external strategic factors. Some of the topics covered in Kindle Fire: Amazon's Heated Battle for the Tablet Market case study are - Strategic Management Strategies, Product development, Technology and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Kindle Fire: Amazon's Heated Battle for the Tablet Market casestudy better are - – increasing transportation and logistics costs, cloud computing is disrupting traditional business models, geopolitical disruptions, talent flight as more people leaving formal jobs, there is increasing trade war between United States & China, digital marketing is dominated by two big players Facebook and Google, challanges to central banks by blockchain based private currencies,
increasing inequality as vast percentage of new income is going to the top 1%, increasing energy prices, etc
Introduction to SWOT Analysis of Kindle Fire: Amazon's Heated Battle for the Tablet Market
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Kindle Fire: Amazon's Heated Battle for the Tablet Market case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Kindle Amazon, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Kindle Amazon operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Kindle Fire: Amazon's Heated Battle for the Tablet Market can be done for the following purposes –
1. Strategic planning using facts provided in Kindle Fire: Amazon's Heated Battle for the Tablet Market case study
2. Improving business portfolio management of Kindle Amazon
3. Assessing feasibility of the new initiative in Sales & Marketing field.
4. Making a Sales & Marketing topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Kindle Amazon
Strengths Kindle Fire: Amazon's Heated Battle for the Tablet Market | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Kindle Amazon in Kindle Fire: Amazon's Heated Battle for the Tablet Market Harvard Business Review case study are -
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For Kindle Amazon digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Kindle Amazon has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Strong track record of project management
– Kindle Amazon is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Sustainable margins compare to other players in Sales & Marketing industry
– Kindle Fire: Amazon's Heated Battle for the Tablet Market firm has clearly differentiated products in the market place. This has enabled Kindle Amazon to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Kindle Amazon to invest into research and development (R&D) and innovation.
High brand equity
– Kindle Amazon has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Kindle Amazon to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
High switching costs
– The high switching costs that Kindle Amazon has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Learning organization
- Kindle Amazon is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Kindle Amazon is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Kindle Fire: Amazon's Heated Battle for the Tablet Market Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Superior customer experience
– The customer experience strategy of Kindle Amazon in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Training and development
– Kindle Amazon has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Kindle Fire: Amazon's Heated Battle for the Tablet Market Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Effective Research and Development (R&D)
– Kindle Amazon has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Kindle Fire: Amazon's Heated Battle for the Tablet Market - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Low bargaining power of suppliers
– Suppliers of Kindle Amazon in the sector have low bargaining power. Kindle Fire: Amazon's Heated Battle for the Tablet Market has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Kindle Amazon to manage not only supply disruptions but also source products at highly competitive prices.
Organizational Resilience of Kindle Amazon
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Kindle Amazon does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Highly skilled collaborators
– Kindle Amazon has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Kindle Fire: Amazon's Heated Battle for the Tablet Market HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses Kindle Fire: Amazon's Heated Battle for the Tablet Market | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Kindle Fire: Amazon's Heated Battle for the Tablet Market are -
Interest costs
– Compare to the competition, Kindle Amazon has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Kindle Fire: Amazon's Heated Battle for the Tablet Market, is just above the industry average. Kindle Amazon needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
High bargaining power of channel partners
– Because of the regulatory requirements, Mohanbir Sawhney, Joseph Owens, Pallavi Goodman suggests that, Kindle Amazon is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
No frontier risks strategy
– After analyzing the HBR case study Kindle Fire: Amazon's Heated Battle for the Tablet Market, it seems that company is thinking about the frontier risks that can impact Sales & Marketing strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Workers concerns about automation
– As automation is fast increasing in the segment, Kindle Amazon needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Kindle Amazon is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Kindle Fire: Amazon's Heated Battle for the Tablet Market can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Lack of clear differentiation of Kindle Amazon products
– To increase the profitability and margins on the products, Kindle Amazon needs to provide more differentiated products than what it is currently offering in the marketplace.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Kindle Fire: Amazon's Heated Battle for the Tablet Market HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Kindle Amazon has relatively successful track record of launching new products.
Need for greater diversity
– Kindle Amazon has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Slow decision making process
– As mentioned earlier in the report, Kindle Amazon has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Kindle Amazon even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Slow to strategic competitive environment developments
– As Kindle Fire: Amazon's Heated Battle for the Tablet Market HBR case study mentions - Kindle Amazon takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Opportunities Kindle Fire: Amazon's Heated Battle for the Tablet Market | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Kindle Fire: Amazon's Heated Battle for the Tablet Market are -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Kindle Amazon can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Leveraging digital technologies
– Kindle Amazon can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Sales & Marketing industry, but it has also influenced the consumer preferences. Kindle Amazon can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Manufacturing automation
– Kindle Amazon can use the latest technology developments to improve its manufacturing and designing process in Sales & Marketing segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Kindle Amazon can use these opportunities to build new business models that can help the communities that Kindle Amazon operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
Better consumer reach
– The expansion of the 5G network will help Kindle Amazon to increase its market reach. Kindle Amazon will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Kindle Amazon to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Buying journey improvements
– Kindle Amazon can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Kindle Fire: Amazon's Heated Battle for the Tablet Market suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Kindle Amazon is facing challenges because of the dominance of functional experts in the organization. Kindle Fire: Amazon's Heated Battle for the Tablet Market case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Learning at scale
– Online learning technologies has now opened space for Kindle Amazon to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Creating value in data economy
– The success of analytics program of Kindle Amazon has opened avenues for new revenue streams for the organization in the industry. This can help Kindle Amazon to build a more holistic ecosystem as suggested in the Kindle Fire: Amazon's Heated Battle for the Tablet Market case study. Kindle Amazon can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Building a culture of innovation
– managers at Kindle Amazon can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Sales & Marketing segment.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Kindle Amazon can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Threats Kindle Fire: Amazon's Heated Battle for the Tablet Market External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Kindle Fire: Amazon's Heated Battle for the Tablet Market are -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Kindle Amazon in the Sales & Marketing industry. The Sales & Marketing industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
High dependence on third party suppliers
– Kindle Amazon high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Stagnating economy with rate increase
– Kindle Amazon can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Consumer confidence and its impact on Kindle Amazon demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Kindle Amazon needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
Increasing wage structure of Kindle Amazon
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Kindle Amazon.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Kindle Fire: Amazon's Heated Battle for the Tablet Market, Kindle Amazon may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Sales & Marketing .
Shortening product life cycle
– it is one of the major threat that Kindle Amazon is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Kindle Amazon business can come under increasing regulations regarding data privacy, data security, etc.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Kindle Amazon with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Kindle Amazon can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Kindle Fire: Amazon's Heated Battle for the Tablet Market .
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Kindle Amazon in the Sales & Marketing sector and impact the bottomline of the organization.
Weighted SWOT Analysis of Kindle Fire: Amazon's Heated Battle for the Tablet Market Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Kindle Fire: Amazon's Heated Battle for the Tablet Market needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Kindle Fire: Amazon's Heated Battle for the Tablet Market is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Kindle Fire: Amazon's Heated Battle for the Tablet Market is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Kindle Fire: Amazon's Heated Battle for the Tablet Market is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Kindle Amazon needs to make to build a sustainable competitive advantage.
