The “Today, close to 50 percent of units

The
combined valuations of rivals Walmart, Costco, Target, Macy’s, and Kohl’s
was surpassed by Amazon’s
market cap of $439.8 billion. Amazon’s stock nearly tripled in value to $922
after a remarkable market run in the last two years.

Amazon’s
market cap doubles in the U.S., with revenue of $482
billion for 2016. Costco’s revenue turns out to $73.8 Billion, Walmart’s is
$218.1 billion and Target’s is $29.6 billion. The total of Macy’s and Kohl’s was
$8.9 billion and $6.6 billion, respectively. This means that Amazon is $100
Billion ahead of these retailers as the total revenue of these five retailers is $337 billion.

We Will Write a Custom Essay Specifically
For You For Only $13.90/page!


order now

Although Amazon has overtaken traditional
competitors, it is important to notice that Amazon has a firm hold in the tech
world, which includes cloud computing business and products such as Alexa and
Amazon Fire. Amazon is also planning to move into the field of grocery delivery
by setting up
centers throughout major cities that can deliver merchandise to customers in
two hours
or less which makes the company a diverse
entity.

Four competitive advantage for Amazon:

1)     
Wide range of products

Amazon has
established itself in the market for the last 15 years. Jeff Bezos’ annual 2015 shareholder
letter quoted that, “Today, close to 50 percent of units sold on Amazon are
sold by third-party sellers. Amazon provides a unique selection for its
consumers in the Marketplace and it’s great for sellers. There are over 70,000
entrepreneurs with sales of more than $100,000 a year selling on Amazon.”

This puts traditional retailers at a huge disadvantage
versus as Amazon has a massive assortment to a high number of manageable list
of products for its holiday promotions whereas retailers have difficulty
matching the huge list of products as that of Amazon.

2)     
Consumers attraction

Amazon offers its consumers
greater user-friendly space to use as compared other retail e-commerce
websites. It’s superior search and query, recommendations based on past
purchases, one-click ordering at check-out, multiple consumer reviews and
ratings, and most recently dash buttons for automatic re-ordering are key
differentiators. Amazon’s Prime membership gives consumers a broader 360-degree
view which includes insights into online transactions, purchase frequency,
entertainment preferences, and regional demographics. This helps Amazon tailor
its online experience to the needs of consumers, and enhance its functionality
and experiment
new things.

3)     
Highly Competitive Pricing

Its aggressively lower pricing is a key advantage driving its
Marketplace program and multiple supplier options. It’s investments in
infrastructure and logistics that have helped it offer, not just two-day
delivery capabilities, but one-hour delivery on an important subset of 25,000
items in 30 cities with Prime Now. Amazon’s highly profitable $10 Billion
AWS business has also helped it subsidize growth into attractive but lower
margin areas like online grocery. Amazon has always placed its “customer value”
and growth over short-term profits.

4)     
Organizational Silos and Fewer Technology

One of Amazon’s
greatest advantage is being a 20-year old company – it skipped the generations
of legacy technologies that hold today’s retailers back. Un-burdened
by investments in mainframes, inflexible and high-cost relational technology,
and investments in huge data centers – Amazon led the move to the cloud with
AWS. It has always focused on what its consumers needed, designed innovative
technology solutions largely in-house, and then commercialized these
technologies for use. It also grew largely organically and did not face the
huge costs of M-induced technology integration.

Today Amazon offers
consumers a broader product assortment, greater convenience, highly competitive
pricing, all powered by a flexible (and profitable) technology stack.

Comparing
the results to its competitors, Amazon Com Inc reported Total Revenue increase
in the 3 quarter 2017 by 33.72 % year on year. 
The sales growth was above Amazon Com Inc’s
competitors average revenue growth of 17.65 %, recorded in the same quarter. 

Future plans:

Amazon is testing a service called “Seller Flex” that will provide
delivery services for third-party merchants on its platform. The project
originally began in India two years ago, the report says, but it’s been piloted
in the U.S. starting on the west coast, and there are plans to expand it more
broadly in 2018.

The service involves Amazon managing package pickup for customers
who purchase through its platform for delivery but it doesn’t mean Amazon would
drop UPS and FedEx for completing the deliveries, it does take those decisions independent
of merchants and put control over how and by whom packages get delivered into
Amazon’s control instead.

According to Bloomberg, this is yet another move by Amazon to own
more of its own logistics process, and it could help the company optimize its
inventory management process by providing more insight into parts of its supply
chain that were previously unclear since they were beyond its direct control.
Meanwhile, it means quicker Prime delivery options for consumers, provided
Amazon’s macro-level viewpoint can help it decide what should go where, and
how, in order to best fulfill promises of speed up shipping times.

Amazon’s decision to act in
this capacity could also help it continue to expand the reach and breadth of
Prime without it having to worry about bringing more third-party merchant goods
into its own fulfillment centers, while still giving it more centralized
logistical control. And while it doesn’t eliminate UPS and FedEx from the mix,
it would probably move more control over to Amazon long-term.

 

How amazon can expand in future

Amazon.com has a business model that others
can easily imitate. Other firms have become fully established in developing
markets, making it difficult for Amazon to penetrate and compete in such
markets. Also, the strong local competitors in developing countries and the
high bar of regulation there, makes it unlikely to succeed in a meaningful way
in the long term. The more it spreads itself, the less effectively it can
differentiate in any single country outside the U.S.

 

´  Expanding
its services in newer geographic locations

´  Amazon
should refocus to a handful of countries

´  Amazon’s
Whole Foods Strategy