Management Report on Amazon

2 Amazon's products ……………………………………………………………………………5 1. 3 Target market …………………………………………………………………………………6 1. 4 Amazon's position in the Australian market …………………………………………………. 5 Justification for proposing a better value ……………………………………………………. 0 Research methods ……………………………………………………………………………. 4 Threats of substitutes ……………………………………………………………. 5 Threats of new entrants ……………………………………………………………11 2. 4 Amazon's future value proposition …………………………………………………………. 0 Current value analysis ………………………………………………………………………. 1 Australian perception on Amazon electronic products ……………………………………. 15 Executive summary Regardless of a low Australian population, there are many potential characteristics that attract many international online retailers such as Amazon. The country's fast-growing population, few densely populated cities, high rate of internet penetration in the country increased online shopping trends and high retail sector profitability plays a significant role for Amazon's entry in the country. This executive summary represents the structure of Amazon's report with the background which introduces the company, objectives and value analysis as well as justification that proposes a better future of Amazon's electronic products.

The research method represents the SWOT and Porter's five force analysis that will analyze the company's external and internal factors affecting the business. Amazon's report further contains current value analysis of its electronic products in the Australian market. Currently, Amazon operates in 11 countries and its imminent entry in the Australian market is likely to shake the retail market. 1 Aim of the report This report is a critical analysis of Amazon's current venture in the Australian market. The report is intended to offer Amazon a better value more so on the supply of electronic products in Australia. 2 Amazon products Amazons largest market in the world is in the United States where it provides a diverse range of products. According to Grey (2015), the American market has over 480 million products provided by Amazon in the retail market.

Regardless of high distribution costs and competition the company is likely to experience, more Australians are eager to buy products from the online giant retailer. 5 Justification for proposing a better value The Australian market is likely to create a better market value for Amazon's electronic products. In 2006, Australia was listed as the most politically stable country globally (Australian Banking & Finance, N. P). This political stability creates an attractive environment for companies to flourish and acquire larger markets shares compared to politically unstable markets. Porter's Five Forces is also another quantitative analysis tool that helps in understanding the competitiveness of the business environment and identification of a company strategy for potential profitability. 2 SWOT analysis SWOT analysis is basically an acronym of Strengths, Weaknesses, Opportunities and Threats.

1 Strength • Amazon is an online giant retailer, in which its strengths are derived from product differentiation, cost leadership and customer focus thus gaining huge values in the market. • Leveraging information technology and use of e-commerce as a primary strategy for its competitive advantage in the Australian market since the company will always be ahead of its competitors. • Amazon's efficiency delivery system accompanied with superior logistics has resulted in better customer focus thus creating a competitive advantage over its competitors. The company has been relying on third party products but its current capitalization on stocking and selling its own brands creates an excellent opportunity. • Amazon's Australian market is characterized by high online shopping. Most of Australians have already carried out online shopping.

This is a major opportunity for Amazon since being an online retailer, there is a ready online market for its products 2. 4 Threats • Australian local online retailers such as Super Cheap, BigW are a major threat to Amazon. 1 Competition rivalry In the wake of its entry in the Australian market. Amazon competes with existing strong online retailers such as Super Cheap which is already established in the market with a large market share. Within the Australian market, Amazon electronic products are likely to experience high aggressiveness from existing online retailers. Besides that, there is a high availability of brick-and-mortar competitors in the country offering Amazon a substantial competition. Furthermore, even after its establishment in the Australian market, low switching costs resulting to limited customer barriers has a significant force on Amazon's existence in the market.

P). For instance, the company's online operational costs can be directly influenced by price changes from the small number of a large supplier's base. However, moderated equipment manufacturing limits the operational costs in the company. 4 Threats of substitution Amazon's entry into the Australian market creates and directs competition with the existing online retailers thereby; the strong force of substitutes threatens the company's performance in the market. For instance, a customer can decide to buy from already established online retailers instead of buying from the new entrant which is associated with low switching costs. Being an online retailer, shoppers can easily buy electronics with a click. The company's customer focus motive ensures quick free delivery or shopping is fulfilled thus avoiding cart abandonment.

Besides that, a customer should always consider Amazon electronics since it is one of the largest retail companies globally and has an exponential revenue growth in the past years and its new entry in the Australian market will foster its growth. Additionally, Amazon plans to open stores in every Australian state thereby reaching customers more easily. 0 Current value analysis Australia's e-commerce market is still low compared with the United States or China. C Nielsen survey (2107), Australians have a strong affinity for e-commerce. It was also evident that most of Australians had the interest to purchase products from Amazon websites. As per the survey, 67 percent of Australians indicated strong interest to buy Amazon electronics while 59 percent and 42 percent of the responded indicated interests to buy Amazon packaged groceries and clothes respectively.

2 Amazon forces rivals to shift their business models As a response to the strong electronic products offered by Amazon in Australia, rivals are forced to shift their business models for their own sustainability. The most common responses to Amazon's strong electronic value in the market, rival business have been forced to reduce their products prices, increase diversification, aggressive online business as well as reduced mortar and brick supplies. 2 Amazon's place and distribution mix Being an online retailer in Australia, Amazon Inc uses its Amazon books as well as its official websites and a subsidiary website known as Audible. com and other official websites to target its customers. Basically, its marketing mix heavily depends on its online presence to reach their target markets.

3 Amazon's promotional mix Promotional mix is an essential component of marketing mix which outlines the strategies that Amazon will use to market their products. The primary tactic that Amazon is using in the Australian market includes; advertising which the most important strategy, sales promotion to persuade customers to purchase electronics on the company's websites and customer relations to strengthen their brand name and enhance corporation's perception. Once adapted, electronic products retailers will be hit hard by its arrival. At the moment, these retailers are struggling with decreasing customers who prefer overseas shopping. Price savvy is a common characteristic among Australian consumers thereby its low price strategies in combination with appropriate marketing plan will attract a large market share. Work cited Albrechtslund, Anne-Mette Bech.

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