Amazon.com (in 2013): Will Amazon Kindle Another Fire? SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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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 - – talent flight as more people leaving formal jobs, increasing household debt because of falling income levels, wage bills are increasing, cloud computing is disrupting traditional business models, digital marketing is dominated by two big players Facebook and Google, geopolitical disruptions, banking and financial system is disrupted by Bitcoin and other crypto currencies,
customer relationship management is fast transforming because of increasing concerns over data privacy, central banks are concerned over increasing inflation, 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 -
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.
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.
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.
Successful track record of launching new products
– Kindle Bezos has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Kindle Bezos 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.
High switching costs
– The high switching costs that Kindle Bezos 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.
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.
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.
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.
Diverse revenue streams
– Kindle Bezos is present in almost all the verticals within the industry. This has provided firm in Amazon.com (in 2013): Will Amazon Kindle Another Fire? 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.
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 -
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Amazon.com (in 2013): Will Amazon Kindle Another Fire?, in the dynamic environment Kindle Bezos has struggled to respond to the nimble upstart competition. Kindle Bezos has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Low market penetration in new markets
– Outside its home market of Kindle Bezos, firm in the HBR case study Amazon.com (in 2013): Will Amazon Kindle Another Fire? needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
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.
High cash cycle compare to competitors
Kindle Bezos has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Amazon.com (in 2013): Will Amazon Kindle Another Fire?, it seems that the employees of Kindle Bezos don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Skills based hiring
– The stress on hiring functional specialists at Kindle Bezos 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Amazon.com (in 2013): Will Amazon Kindle Another Fire? 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 Bezos has relatively successful track record of launching new products.
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 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.
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 operating costs
– Compare to the competitors, firm in the HBR case study Amazon.com (in 2013): Will Amazon Kindle Another Fire? has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Kindle Bezos 's lucrative customers.
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 -
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.
Leveraging digital technologies
– Kindle Bezos 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.
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.
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 Bezos in the consumer business. Now Kindle Bezos can target international markets with far fewer capital restrictions requirements than the existing system.
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.
Manufacturing automation
– Kindle Bezos can use the latest technology developments to improve its manufacturing and designing process in Strategy & Execution 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.
Building a culture of innovation
– managers at Kindle Bezos 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 Strategy & Execution segment.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Strategy & Execution industry, but it has also influenced the consumer preferences. Kindle Bezos can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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.
Loyalty marketing
– Kindle Bezos has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Developing new processes and practices
– Kindle Bezos can develop new processes and procedures in Strategy & Execution industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Buying journey improvements
– Kindle Bezos can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Amazon.com (in 2013): Will Amazon Kindle Another Fire? 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.
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.
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 -
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 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.
Increasing wage structure of Kindle Bezos
– 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 Bezos.
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.
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.
Shortening product life cycle
– it is one of the major threat that Kindle Bezos is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
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.
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 Bezos business can come under increasing regulations regarding data privacy, data security, etc.
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.
Regulatory challenges
– Kindle Bezos 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 Strategy & Execution industry regulations.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Kindle Bezos.
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.