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 - – cloud computing is disrupting traditional business models, geopolitical disruptions, supply chains are disrupted by pandemic , increasing transportation and logistics costs, talent flight as more people leaving formal jobs, wage bills are increasing, increasing household debt because of falling income levels,
there is increasing trade war between United States & China, customer relationship management is fast transforming because of increasing concerns over data privacy, 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 -
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.
Diverse revenue streams
– Kindle Amazon is present in almost all the verticals within the industry. This has provided firm in Kindle Fire: Amazon's Heated Battle for the Tablet Market case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
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.
Ability to lead change in Sales & Marketing field
– Kindle Amazon is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Kindle Amazon in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
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.
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.
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.
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.
Analytics focus
– Kindle Amazon is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Mohanbir Sawhney, Joseph Owens, Pallavi Goodman can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Successful track record of launching new products
– Kindle Amazon has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Kindle Amazon has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
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.
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 -
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 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.
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.
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.
Low market penetration in new markets
– Outside its home market of Kindle Amazon, firm in the HBR case study Kindle Fire: Amazon's Heated Battle for the Tablet Market needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
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.
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.
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.
Capital Spending Reduction
– Even during the low interest decade, Kindle Amazon has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Products dominated business model
– Even though Kindle Amazon has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Kindle Fire: Amazon's Heated Battle for the Tablet Market should strive to include more intangible value offerings along with its core products and services.
Skills based hiring
– The stress on hiring functional specialists at Kindle Amazon has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
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 -
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.
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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Kindle Amazon to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Kindle Amazon to hire the very best people irrespective of their geographical location.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Kindle Amazon in the consumer business. Now Kindle Amazon can target international markets with far fewer capital restrictions requirements than the existing system.
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.
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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Kindle Amazon can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
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.
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.
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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Kindle Amazon in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Sales & Marketing segment, and it will provide faster access to the consumers.
Using analytics as competitive advantage
– Kindle Amazon has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Kindle Fire: Amazon's Heated Battle for the Tablet Market - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Kindle Amazon to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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.
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 -
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 .
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.
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.
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.
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.
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.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Kindle Amazon will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Regulatory challenges
– Kindle Amazon needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Sales & Marketing industry regulations.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
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 .
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.
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.