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4. Developing more local sites in international markets is an attractive business opportunity Amazon has to explore. Currently, the range of Amazon’s internationally-focused websites are limited to , , , , , , , , , , and . The largest internet retailer in the world needs to increase the level of geographical service personalization by launching more region-oriented websites. Specifically, Amazon needs to focus on developing countries and former USSR blog countries. 5. Engagement in strategic collaborations with companies in e-commerce and affiliated industries is also an opportunity worthy to be considered by Amazon strategic level management. A range of businesses that Amazon could cooperate with include but not limited to online and offline retailers, entertainment organizations, media organizations and others. A range of potential benefits to be gained by Amazon via engagement in strategic collaborations include cost saving in marketing, supply-chain management, distribution and others. 7.4 Threats 1. A loss of profitability due to low profit margin is one of the most noteworthy threats faced by Amazon. “Spending on things like merchandise warehouses, web video programming and computer data centres slimmed its operating profit margin to a tiny 1.7%. The spending is even more flush than it appears. Unlike its peers, Amazon.com Inc. also expands its warehouses and data centres through capital leases, and when those costs are included, Amazon’s free cash flow was just USD1.5 billion in the last 12 months. That means out of every USD1 in cash coming 41Brooks, L. (2017) “How Whole Foods Can Keep its Identity After the Amazon Deal” Fortune, Available at: 16
into Amazon, it’s left with 1 cent after accounting for all its cash expenses.”42Such a low profit margin makes Amazon vulnerable to emergence of competitors with more cost-effective operations due to disruptive innovation or their access to cheaper resources. 2. Amazon has been involved in a set of expensive lawsuits in the past. Complaints against Amazon were filed by Austro-Mechana, Austrian copyright collection society in 2007, Big Baboon, Inc. in 2009, Walker Digital LLC in 2011, OIP Technologies, Inc. in 2012 and Smartflash LLC in 2014 to name just a few. Additionally “beginning in August 2013, a number of complaints were filed alleging, among other things, that Amazon.com, Inc. and several of its subsidiaries failed to compensate hourly workers for time spent waiting in security lines and otherwise violated federal and state wage and hour statutes and common law.”43There is a threat of more lawsuits against Amazon in the future on various grounds with negative implications in terms of finance and damage to the brand image.