TOPIC 9 - Discuss the challenges and opportunities for Amazon (Group)

What is Amazon? (Tan Wai Ken TP070991)

Amazon is being founded by Jeffrey Preston Bezos in Bellevue, Washington during the year of 1994. It started with an online bookselling company and now become the world's largest e-commerce company and a prominent cloud service provide. (Waters, 2024)



Challenges 1 : 

Amazon, as an e-commerce platform that open to numerous numbers of the third-party seller, allows B2C and C2C market to promote and sell their product, faces a significant issue with counterfeit products. Due to the lack of proper regulation and limitation of the system where it couldn't identify new account is made by the same scammer, issues such as fake parcel or sellers failing to ship products to customers occur repeatedly. 

This has harmed its reputation and trust among the users which is very serious when there are multiple competitors like Lazada, Taobao and Shopee keep challenging its position right now. Moreover, Amazon also needs to improve its shipping speed, as it currently provides fast delivery in only 21 countries, requiring subscription fees ranging from $13 to $100. In contrast, competitors like Alibaba serve over 190 countries with no shipping fees and delivery within 72 hours, attracting more users and making it even harder for Amazon to compete. (The Wall Street Journal, 2021)

If there are no substantial improvements, people will slowly move to the other platform which ultimately, result in user attrition and market share being taken by competitors. (Luciano, 2023)

Provided by: Tan Wai Ken TP070991

The first challenge is the Impact on Environment Sustainability. The company's environmental impact and carbon footprint are important considerations. Even with promises to cut emissions and spend money on renewable energy, Amazon's extensive logistical network produces a lot of trash and pollution. Then there is packaging trash, using too many packaging materials while delivering goods degrades the environment and makes recycling and trash management difficult.  

The second challenge is market Rivalry E-commerce Competition: Walmart, Alibaba, and local competitors in various countries, as well as other e-commerce platforms, pose a serious threat to Amazon, even if it leads the market. Retail Market Changes: Amazon's market share is threatened by changes in consumer behavior and the emergence of alternative retail formats, such as direct-to-consumer brands.  

Challenges 2

Provited by Teoh Mneg Lun TP070223


Regulatory challenges: As Amazon expands its operations and influence, it faces increased scrutiny from regulators regarding issues such as antitrust concerns, data privacy, and labor practices. 

Intense competition: Competitors such as Walmart, Alibaba, and Google pose a threat to Amazon's market dominance. These companies have the financial resources and infrastructure to challenge Amazon's position. 

Rapidly changing consumer preferences: Consumer preferences and behaviors are continually evolving, and Amazon needs to adapt quickly to meet these changing demands. Failure to do so could lead to a loss of market share. 

Supply chain disruptions: Any disruptions in Amazon's supply chain, such as natural disasters or labor strikes, could impact its ability to fulfill customer orders, resulting in potential revenue loss and customer dissatisfaction.


Opportunities: 

Expansion into new markets: Amazon has the opportunity to expand its business into new markets, such as healthcare, grocery, and international regions, to drive future growth. 

Growing demand for cloud services: Amazon Web Services (AWS) has experienced significant growth, and the increasing demand for cloud computing presents an opportunity for the company to further expand its market share. 

Acquisition potential: With its strong financial position, Amazon has the opportunity to acquire other companies to diversify its offerings or gain a competitive advantage in certain sectors. 

Emerging technologies: As technology continues to evolve, Amazon can leverage emerging technologies such as artificial intelligence, voice assistants, and virtual reality to enhance customer experience and develop new revenue streams. 








How might we Question? Lead to Solution

Environmental Sustainability

How might we reduce packaging waste in e-commerce?

1. Implement reusable packaging solutions for customers (Sarkar, 2023).

2. Expand the use of original container shipping to reduce secondary packaging (Sarkar, 2023).

How might we enhance recycling practices for packaging materials?

1. Develop and promote a robust packaging return and recycling program for customers (Cmq/Oe, 2023).

2. Educate the consumers about the eco-friendliness of your packaging, its recyclability, and the importance of responsible disposal (Cmq/Oe, 2023).. 

How might we lower the carbon footprint of our logistical network?

1. Invest in electric and hybrid delivery vehicles (Banfi, 2024).

2. Optimize delivery routes using AI to reduce fuel consumption and emissions (Robinson, 2023).

Market Rivalry and Competition

How might we differentiate our services from competitors?

1. Introduce unique products or services to fill the gap that exists in the industry (BL Technical Services, Inc., 2023).

2.Provide superior customer service to build customer loyalty (BL Technical Services, Inc., 2023).

How might we adapt to changing consumer behaviors and retail formats?

1. Listen to customer demand and adapt with it accordingly (Goodway Group, 2024).

2. Launch loyalty programs such as free delivery or discounts for member (Goodway Group, 2024).

How might we strengthen our presence in local markets?

1. By building a network so that it could help  us in the majority of the business (Liberatore, 2022).

2. Customize marketing strategies to cater to the preferences of local consumers.

Provided by: Patrick Woo Soon Tat (TP070151)


Challenges 3

1. One of the challenges that Amazon face is the market saturation and the huge number of competitors around them. Even though Amazon has a huge monopoly in the e-commerce industry, other competitors are innovating new ways to get an edge over Amazon and provide better benefit to its potential customer. To retain its customer and their loyalty for Amazon, Amazon needs to address the challenges first and create a strategic solutions to continuously strive and maintain its status in the e-commerce field.

2. Another one of the challenges is the scalability of Amazon. With larger scale and complex tasks that needs to be solved quickly due to how large Amazon operations is. They need to solve the issue quick and have a emergency backup plan.


Opportunities/Solutions

1. Amazon could provide customer loyalty programs to make customers continue using their services as long as possible. 

2. They could expand bigger and invest in other segments of the industry with the help of Artificial Intelligence. By using AI, they could potentially automate a lot of workload to AI to anticipate supply chain disruptions and optimize the workflow to overall improve the efficiency of Amazon's business. AI could potentially minimize risk and reduce operation cost by analyzing and identify issues earlier than humans could foresee and provide a strategic solution.

Provided by: Tan Yen Hau (TP071849)







References

Luciano, C. (2023, April 11). Amazon: Business Model, SWOT Analysis, and Competitors 2023. PitchGrade. https://pitchgrade.com/companies/amazon

Waters, J. (2024, May 18). Amazon.com. Britannica Money. https://www.britannica.com/money/Amazoncom

The Wall Street Journal. (2021, July 9). Amazon vs. Alibaba: The Race to Dominate Fast Global Shipping | WSJ. YouTube. https://www.youtube.com/watch?v=r6jGTdQc-Ms&t=178s

Banfi, G. (2024, April 17). Green Tech: what it is and how it can lead us to a more sustainable future. Customer Experience E Omnichannel Solutions | Ingo. https://ingo.it/en/blog/news/green-tech-what-it-is-and-how-it-can-lead-us-to-a-more-sustainable-future/

Sarkar, M. (2023). Environmental Sustainability under E-Commerce: A Holistic Perspective. European Journal of Development Studies, 3(3), 1–6. https://doi.org/10.24018/ejdevelop.2023.3.3.252

Cmq/Oe, L. D. M. M. S. L. (2023, October 24). How can you improve the sustainability of your packaging materials? https://www.linkedin.com/pulse/how-can-you-improve-sustainability-your-packaging-lucky-iqz5e/

Robinson, A. (2023, October 16). 7 simple ways logistics companies can lower emissions today. Searoutes. https://searoutes.com/2023/10/16/7-simple-ways-logistics-companies-can-lower-emissions-today/

BL Technical Services, Inc. (2023, July 11). Strategies for Differentiating Your Business from Competitors. https://www.linkedin.com/pulse/strategies-differentiating-your-business-from-competitors/

Goodway Group. (2024, May 3). 7 Ways Retailers can adapt to changing Consumer behavior. https://goodway-media.com/blog/retailers-changing-consumer-behavior

Liberatore, S. (2022, January 27). 5 tips on how you can increase your local presence. https://www.linkedin.com/pulse/5-tips-how-you-can-increase-your-local-presence-susie-liberatore/

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