SWOT Analysis of Amazon Canada
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Strengths
The key strengths of Amazon Canada are that it engages in a wide variety of products, therefore, enabling clients to have the best experience while shopping. Pereira (2023) explains that brand recognition and an efficient distribution network are reasons Amazon maintains a competitive advantage. From the case study, there is the realization that apart from stocking millions of products, the store also ensures that customers can enjoy same-day delivery, done a few hours after making orders. Online shoppers like efficiency, which is why Amazon Canada continues to dominate the online market.
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Weaknesses
However, several challenges threaten the business position of Amazon Canada. For instance, the company depends on third parties to meet customer demands. Therefore, it needs more control over the quality of products. In addition, the company cannot keep hold of customer loyalty because it deals in various products, some of which are from different suppliers (Pereira, 2023). These challenges have significantly affected the performance of Amazon in the Canadian online market.
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Opportunities
The opportunities for Amazon Canada are wide and varied. From the case study, there is the realization that the company’s revenue significantly increased during the pandemic. People continually prefer shopping online because it is convenient. Therefore, the company should increase its range of products and have a comprehensive supply chain management that reduces the time it takes to deliver goods to customers.
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Threats
Online business is risky, especially when it comes to data security. One of the challenges facing Amazon in the contemporary business world is cybersecurity (Pereira, 2023). The company has little control over the activities of third-party sellers. As a result, it is difficult to ensure that customers can shop safely without exposing their personal information to criminals. When people shop online, they use their credit cards. Such cards contain crucial personal and financial information that can be used to commit fraud.
Amazon Prime and Price Segmentation
The primary objective of Amazon Prime is to improve customer loyalty and ensure that the company maintains optimal relations with clients. For instance, videos cost prime members $8.99 per month, whereas regular members subscribe for $14.99 per month. Prime shoppers also enjoy an 8% book discount (Amazon, 2023). Providing prime customers with discounts encourages membership and increases the percentage of return customers. Therefore, clients must register as prime customers to enjoy competitive deals on select products.
Amazon uses segmented selling as a strategy to increase consumer loyalty. The digital platform is competitive because of the ease of entry of new players. Amazon uses segmented pricing because price sensitivity is an approach that can endow a company with a significant competitive advantage. Amazon operates in the digital market, implying that it serves millions of clients across the globe. Therefore, it is crucial to understand customers and ensure that they enjoy competitive pricing. For instance, time is crucial and can be used to give customers special offers. Customers especially expect discounts during Black Friday. Amazon uses such strategies to give special prices for selected items. Amazon also provides special prices for students so that they can have access to books. Students can access videos for as low as $7.49 per month compared to $14.99 for other members (Amazon, 2023). Price segmentation has enabled the company to cater to specific clients’ unique needs.
References
Amazon. (2023). Today’s Deals. Retrieved from Amazon: https://www.amazon.com/gp/goldbox?ref_=nav_cs_gb
Pereira, D. (2023, March 3). Amazon SWOT Analysis. Retrieved from The Business Model Analyst: https://businessmodelanalyst.com/amazon-swot-analysis/
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