Amazon.com (in 2013): Will Amazon Kindle Another Fire? SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Amazon.com (in 2013): Will Amazon Kindle Another Fire?
The case is written from the perspective of Jeff Bezos, CEO of Amazon.com, as he ponders the company's strategy over the next several years. At one point, Bezos believed there was room in the marketplace for the Kindle as a dedicated e-reader alongside tablets and laptops. Since its introduction in 2010, however, Apple's iPad has become the all-in-one vehicle for digital content, and competition in the mobile device industry has risen sharply.
Authors :: Frank T. Rothaermel, Seth Taylor, Marne L. Arthaud-Day
Swot Analysis of "Amazon.com (in 2013): Will Amazon Kindle Another Fire?" written by Frank T. Rothaermel, Seth Taylor, Marne L. Arthaud-Day includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Kindle Bezos facing as an external strategic factors. Some of the topics covered in Amazon.com (in 2013): Will Amazon Kindle Another Fire? case study are - Strategic Management Strategies, Innovation, Leadership and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Amazon.com (in 2013): Will Amazon Kindle Another Fire? casestudy better are - – increasing household debt because of falling income levels, increasing energy prices, wage bills are increasing, cloud computing is disrupting traditional business models, increasing inequality as vast percentage of new income is going to the top 1%, geopolitical disruptions, competitive advantages are harder to sustain because of technology dispersion,
customer relationship management is fast transforming because of increasing concerns over data privacy, digital marketing is dominated by two big players Facebook and Google, etc
Introduction to SWOT Analysis of Amazon.com (in 2013): Will Amazon Kindle Another Fire?
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Amazon.com (in 2013): Will Amazon Kindle Another Fire? case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Kindle Bezos, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Kindle Bezos 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 Amazon.com (in 2013): Will Amazon Kindle Another Fire? can be done for the following purposes –
1. Strategic planning using facts provided in Amazon.com (in 2013): Will Amazon Kindle Another Fire? case study
2. Improving business portfolio management of Kindle Bezos
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Kindle Bezos
Strengths Amazon.com (in 2013): Will Amazon Kindle Another Fire? | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Kindle Bezos in Amazon.com (in 2013): Will Amazon Kindle Another Fire? Harvard Business Review case study are -
Operational resilience
– The operational resilience strategy in the Amazon.com (in 2013): Will Amazon Kindle Another Fire? Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
High brand equity
– Kindle Bezos has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Kindle Bezos to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Strong track record of project management
– Kindle Bezos is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Superior customer experience
– The customer experience strategy of Kindle Bezos in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Low bargaining power of suppliers
– Suppliers of Kindle Bezos in the sector have low bargaining power. Amazon.com (in 2013): Will Amazon Kindle Another Fire? has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Kindle Bezos to manage not only supply disruptions but also source products at highly competitive prices.
Analytics focus
– Kindle Bezos 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 Frank T. Rothaermel, Seth Taylor, Marne L. Arthaud-Day 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.
Training and development
– Kindle Bezos has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Amazon.com (in 2013): Will Amazon Kindle Another Fire? 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.
Organizational Resilience of Kindle Bezos
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Kindle Bezos does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to lead change in Strategy & Execution field
– Kindle Bezos 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 Bezos in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Effective Research and Development (R&D)
– Kindle Bezos 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 Amazon.com (in 2013): Will Amazon Kindle Another Fire? - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Learning organization
- Kindle Bezos 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 Bezos is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Amazon.com (in 2013): Will Amazon Kindle Another Fire? Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Highly skilled collaborators
– Kindle Bezos 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 Amazon.com (in 2013): Will Amazon Kindle Another Fire? HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses Amazon.com (in 2013): Will Amazon Kindle Another Fire? | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Amazon.com (in 2013): Will Amazon Kindle Another Fire? are -
Slow to strategic competitive environment developments
– As Amazon.com (in 2013): Will Amazon Kindle Another Fire? HBR case study mentions - Kindle Bezos 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.
Aligning sales with marketing
– It come across in the case study Amazon.com (in 2013): Will Amazon Kindle Another Fire? that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Amazon.com (in 2013): Will Amazon Kindle Another Fire? can leverage the sales team experience to cultivate customer relationships as Kindle Bezos is planning to shift buying processes online.
Workers concerns about automation
– As automation is fast increasing in the segment, Kindle Bezos 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.
Interest costs
– Compare to the competition, Kindle Bezos 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 Amazon.com (in 2013): Will Amazon Kindle Another Fire?, is just above the industry average. Kindle Bezos 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.
Slow decision making process
– As mentioned earlier in the report, Kindle Bezos 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 Bezos 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.
No frontier risks strategy
– After analyzing the HBR case study Amazon.com (in 2013): Will Amazon Kindle Another Fire?, it seems that company is thinking about the frontier risks that can impact Strategy & Execution 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.
Products dominated business model
– Even though Kindle Bezos 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 - Amazon.com (in 2013): Will Amazon Kindle Another Fire? should strive to include more intangible value offerings along with its core products and services.
High bargaining power of channel partners
– Because of the regulatory requirements, Frank T. Rothaermel, Seth Taylor, Marne L. Arthaud-Day suggests that, Kindle Bezos 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 Bezos 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.
Increasing silos among functional specialists
– The organizational structure of Kindle Bezos is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Kindle Bezos needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Kindle Bezos to focus more on services rather than just following the product oriented approach.
Opportunities Amazon.com (in 2013): Will Amazon Kindle Another Fire? | 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 Amazon.com (in 2013): Will Amazon Kindle Another Fire? are -
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Strategy & Execution industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Kindle Bezos can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Kindle Bezos can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
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 Bezos can use these opportunities to build new business models that can help the communities that Kindle Bezos operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
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 Bezos can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Learning at scale
– Online learning technologies has now opened space for Kindle Bezos 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 Bezos has opened avenues for new revenue streams for the organization in the industry. This can help Kindle Bezos to build a more holistic ecosystem as suggested in the Amazon.com (in 2013): Will Amazon Kindle Another Fire? case study. Kindle Bezos can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Kindle Bezos can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Better consumer reach
– The expansion of the 5G network will help Kindle Bezos to increase its market reach. Kindle Bezos 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.
Using analytics as competitive advantage
– Kindle Bezos 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 Amazon.com (in 2013): Will Amazon Kindle Another Fire? - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Kindle Bezos to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Kindle Bezos in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Strategy & Execution segment, and it will provide faster access to the consumers.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Kindle Bezos can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Amazon.com (in 2013): Will Amazon Kindle Another Fire?, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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 Bezos 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 Bezos is facing challenges because of the dominance of functional experts in the organization. Amazon.com (in 2013): Will Amazon Kindle Another Fire? 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Kindle Bezos 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 Bezos to hire the very best people irrespective of their geographical location.
Threats Amazon.com (in 2013): Will Amazon Kindle Another Fire? External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Amazon.com (in 2013): Will Amazon Kindle Another Fire? are -
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 Bezos 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.
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Kindle Bezos 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 Amazon.com (in 2013): Will Amazon Kindle Another Fire? .
Stagnating economy with rate increase
– Kindle Bezos 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.
Environmental challenges
– Kindle Bezos needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Kindle Bezos can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
High dependence on third party suppliers
– Kindle Bezos 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.
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 Bezos needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
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 Bezos in the Strategy & Execution sector and impact the bottomline of the organization.
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.
Technology acceleration in Forth Industrial Revolution
– Kindle Bezos has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Kindle Bezos needs to keep up with the evolution of technology in the Strategy & Execution sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Kindle Bezos with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Easy access to finance
– Easy access to finance in Strategy & Execution field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Kindle Bezos can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Kindle Bezos in the Strategy & Execution industry. The Strategy & Execution 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.
Weighted SWOT Analysis of Amazon.com (in 2013): Will Amazon Kindle Another Fire? 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 Amazon.com (in 2013): Will Amazon Kindle Another Fire? 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 Amazon.com (in 2013): Will Amazon Kindle Another Fire? 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 Amazon.com (in 2013): Will Amazon Kindle Another Fire? 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 Amazon.com (in 2013): Will Amazon Kindle Another Fire? 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 Bezos needs to make to build a sustainable competitive advantage.
