Reinventing E-Commerce: Amazon's Bet on Unmanned Vehicle Delivery SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Case Study Description of Reinventing E-Commerce: Amazon's Bet on Unmanned Vehicle Delivery
In a December 1, 2013, interview on American television program 60 Minutes, Amazon CEO Jeff Bezos announced that Amazon would soon change the future of online shopping by enabling customers to receive items within thirty minutes of ordering. This delivery service, Bezos said, would be powered by unmanned autonomous drones and could be offered as soon as 2015. The market reaction was instantaneous and positive. Still, Amazon needed some answers before it could launch autonomous delivery services: Were customers ready to embrace and pay for this type of delivery service? Would regulators allow it? Should Amazon make or buy its drones? Would it be too risky for Amazon to wait to launch this service? If it decided to go ahead, how should it launch, and to whom?
Swot Analysis of "Reinventing E-Commerce: Amazon's Bet on Unmanned Vehicle Delivery" written by Russell Walker, Rafique Jiwani includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Amazon Unmanned facing as an external strategic factors. Some of the topics covered in Reinventing E-Commerce: Amazon's Bet on Unmanned Vehicle Delivery case study are - Strategic Management Strategies, Innovation, IT, Operations management, Productivity, Risk management and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Reinventing E-Commerce: Amazon's Bet on Unmanned Vehicle Delivery casestudy better are - – talent flight as more people leaving formal jobs, geopolitical disruptions, cloud computing is disrupting traditional business models, there is backlash against globalization, central banks are concerned over increasing inflation, increasing government debt because of Covid-19 spendings, customer relationship management is fast transforming because of increasing concerns over data privacy,
challanges to central banks by blockchain based private currencies, wage bills are increasing, etc
Introduction to SWOT Analysis of Reinventing E-Commerce: Amazon's Bet on Unmanned Vehicle Delivery
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Reinventing E-Commerce: Amazon's Bet on Unmanned Vehicle Delivery case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Amazon Unmanned, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Amazon Unmanned 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 Reinventing E-Commerce: Amazon's Bet on Unmanned Vehicle Delivery can be done for the following purposes –
1. Strategic planning using facts provided in Reinventing E-Commerce: Amazon's Bet on Unmanned Vehicle Delivery case study
2. Improving business portfolio management of Amazon Unmanned
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 Amazon Unmanned
Strengths Reinventing E-Commerce: Amazon's Bet on Unmanned Vehicle Delivery | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Amazon Unmanned in Reinventing E-Commerce: Amazon's Bet on Unmanned Vehicle Delivery Harvard Business Review case study are -
Effective Research and Development (R&D)
– Amazon Unmanned 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 Reinventing E-Commerce: Amazon's Bet on Unmanned Vehicle Delivery - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Organizational Resilience of Amazon Unmanned
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Amazon Unmanned does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Cross disciplinary teams
– Horizontal connected teams at the Amazon Unmanned are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Operational resilience
– The operational resilience strategy in the Reinventing E-Commerce: Amazon's Bet on Unmanned Vehicle Delivery 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.
Low bargaining power of suppliers
– Suppliers of Amazon Unmanned in the sector have low bargaining power. Reinventing E-Commerce: Amazon's Bet on Unmanned Vehicle Delivery has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Amazon Unmanned to manage not only supply disruptions but also source products at highly competitive prices.
Diverse revenue streams
– Amazon Unmanned is present in almost all the verticals within the industry. This has provided firm in Reinventing E-Commerce: Amazon's Bet on Unmanned Vehicle Delivery 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.
Successful track record of launching new products
– Amazon Unmanned has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Amazon Unmanned 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.
Strong track record of project management
– Amazon Unmanned is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Learning organization
- Amazon Unmanned 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 Amazon Unmanned is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Reinventing E-Commerce: Amazon's Bet on Unmanned Vehicle Delivery Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Amazon Unmanned digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Amazon Unmanned 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.
Superior customer experience
– The customer experience strategy of Amazon Unmanned in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Analytics focus
– Amazon Unmanned 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 Russell Walker, Rafique Jiwani 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.
Weaknesses Reinventing E-Commerce: Amazon's Bet on Unmanned Vehicle Delivery | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Reinventing E-Commerce: Amazon's Bet on Unmanned Vehicle Delivery are -
Slow to strategic competitive environment developments
– As Reinventing E-Commerce: Amazon's Bet on Unmanned Vehicle Delivery HBR case study mentions - Amazon Unmanned 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Reinventing E-Commerce: Amazon's Bet on Unmanned Vehicle Delivery, it seems that the employees of Amazon Unmanned 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.
Interest costs
– Compare to the competition, Amazon Unmanned 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Reinventing E-Commerce: Amazon's Bet on Unmanned Vehicle Delivery 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 Amazon Unmanned has relatively successful track record of launching new products.
Increasing silos among functional specialists
– The organizational structure of Amazon Unmanned is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Amazon Unmanned needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Amazon Unmanned to focus more on services rather than just following the product oriented approach.
Capital Spending Reduction
– Even during the low interest decade, Amazon Unmanned 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.
Low market penetration in new markets
– Outside its home market of Amazon Unmanned, firm in the HBR case study Reinventing E-Commerce: Amazon's Bet on Unmanned Vehicle Delivery needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Aligning sales with marketing
– It come across in the case study Reinventing E-Commerce: Amazon's Bet on Unmanned Vehicle Delivery 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 Reinventing E-Commerce: Amazon's Bet on Unmanned Vehicle Delivery can leverage the sales team experience to cultivate customer relationships as Amazon Unmanned is planning to shift buying processes online.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Amazon Unmanned supply chain. Even after few cautionary changes mentioned in the HBR case study - Reinventing E-Commerce: Amazon's Bet on Unmanned Vehicle Delivery, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Amazon Unmanned vulnerable to further global disruptions in South East Asia.
High bargaining power of channel partners
– Because of the regulatory requirements, Russell Walker, Rafique Jiwani suggests that, Amazon Unmanned 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 Reinventing E-Commerce: Amazon's Bet on Unmanned Vehicle Delivery, 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.
Opportunities Reinventing E-Commerce: Amazon's Bet on Unmanned Vehicle Delivery | 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 Reinventing E-Commerce: Amazon's Bet on Unmanned Vehicle Delivery are -
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 Amazon Unmanned 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Amazon Unmanned can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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. Amazon Unmanned can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Amazon Unmanned 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 Amazon Unmanned to hire the very best people irrespective of their geographical location.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Amazon Unmanned 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.
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. Amazon Unmanned 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. Amazon Unmanned 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, Amazon Unmanned can use these opportunities to build new business models that can help the communities that Amazon Unmanned operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Loyalty marketing
– Amazon Unmanned 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.
Better consumer reach
– The expansion of the 5G network will help Amazon Unmanned to increase its market reach. Amazon Unmanned 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.
Building a culture of innovation
– managers at Amazon Unmanned 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.
Buying journey improvements
– Amazon Unmanned can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Reinventing E-Commerce: Amazon's Bet on Unmanned Vehicle Delivery 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.
Learning at scale
– Online learning technologies has now opened space for Amazon Unmanned 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Amazon Unmanned 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.
Threats Reinventing E-Commerce: Amazon's Bet on Unmanned Vehicle Delivery External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Reinventing E-Commerce: Amazon's Bet on Unmanned Vehicle Delivery are -
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Reinventing E-Commerce: Amazon's Bet on Unmanned Vehicle Delivery, Amazon Unmanned may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
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, Amazon Unmanned 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 Reinventing E-Commerce: Amazon's Bet on Unmanned Vehicle Delivery .
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. Amazon Unmanned can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 Amazon Unmanned in the Strategy & Execution sector and impact the bottomline of the organization.
Increasing wage structure of Amazon Unmanned
– 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 Amazon Unmanned.
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 Amazon Unmanned business can come under increasing regulations regarding data privacy, data security, etc.
Stagnating economy with rate increase
– Amazon Unmanned 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Amazon Unmanned 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.
Consumer confidence and its impact on Amazon Unmanned 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. Amazon Unmanned needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
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 Amazon Unmanned.
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. Amazon Unmanned 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.
Weighted SWOT Analysis of Reinventing E-Commerce: Amazon's Bet on Unmanned Vehicle Delivery 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 Reinventing E-Commerce: Amazon's Bet on Unmanned Vehicle Delivery 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 Reinventing E-Commerce: Amazon's Bet on Unmanned Vehicle Delivery 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 Reinventing E-Commerce: Amazon's Bet on Unmanned Vehicle Delivery 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 Reinventing E-Commerce: Amazon's Bet on Unmanned Vehicle Delivery 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 Amazon Unmanned needs to make to build a sustainable competitive advantage.