350581046-Amazon-inc-SWOT-Analysis.docx - 2.0 Analysis of The Internal Environment 2.1 Analysis of Amazon Strengths The first strength that Amazon

350581046-Amazon-inc-SWOT-Analysis.docx - 2.0 Analysis of...

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2.0. Analysis of The Internal Environment 2.1. Analysis of Amazon Strengths The first strength that Amazon possessed is in terms of its first mover advantage. Amazon was founded by Jeff Bezos in 1994 at the back of his house garage. As reported by Business Insider (2010), starting from 1997 until 2010, many economists have speculated that those periods are the starting and the burst point of the dot-com bubble which is the economic bubble that marks the start of internet usage and adaptation by businesses and consumers. As the Amazon was founded in 1994, it literally even established prior to this trend and ride on the train of the opportunity back then. In terms of Amazon product and service offering, despite all the risks and costs that were being presented and encountered by them, Amazon then eventually enjoy the benefits of being a pioneer and as the market responds well to this initial move and starting to become a monopoly on its own industry. In late 1990s Bezos took an initiative to add five more new warehouses and fulfilment centre which costs him $300 million at that time. This additional warehouses was even purchased before it was needed as simply a preventive act to the potential rivals risen and making sure the to meet the demand that was growing at that time and offer them the best prices and most convenient delivery (Quittner, 2008). By doing so, Bezos may achieve benefits of hitting two birds with one stone; defending itself and limiting the gap for late movers and at the same time secure the market share in the industry as shown in Figure 2.1, Amazon growth rate, shown in the blue line is even in a higher position compared to the red line which represents the U.S. e-commerce growth rate. Figure 2.1. Amazon Growth Rate Compared to U.S. E-commerce Growth Rate Within a Decade
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In relating to the first mover advantage, there is another benefit that the pioneer can enjoy which is the establishing a strong reputation and branding. Another possibility resulted from a satisfactory product and service offering is in terms of the reputation. It is a fact that Amazon is now the market leader in the e-commerce industry in U.S. and because they are the pioneer in this industry, it gave them the
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  • Spring '17
  • Dot-com bubble, First-mover advantage, Analysis of Amazon Strengths

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