One of the most prominent online merchants in the world is Amazon. Amazon runs a variety of e-commerce, cloud computing, and artificial intelligence services from its headquarters in Seattle, Washington. Amazon’s 518210 NAICS code (North American Industry Classification System) denotes electronic shopping and mail-order houses. As stated by the U.S. According to the Census Bureau, the electronic shopping and mail-order sector recorded retail sales of $91.6 billion in 2018, with a large portion of that figure attributable to Amazon (Amazon.com Inc – ZIP 98109, NAICS 518210, SIC 7374, n.d.).
The interaction between customers and sellers is essential to how Amazon runs. Amazon is the middleman for seller transactions so that customers can explore and buy products from a range. Amazon can retain a competitive advantage and draw customers to its platform. Amazon competes in a market with an oligopoly structure, with few rivals and high entry barriers, including Walmart and eBay. Because of the market structure, Amazon can charge more for its goods and benefit from economies of scale that its rivals cannot. Amazon uses a B2C (business-to-consumer) business strategy to interact with customers, allowing it to successfully promote its goods and services directly and build connections with them (Myers & Tauber, 2011).
In the fiercely competitive retail sector, Amazon competes against other e-commerce platforms and traditional retailers. Amazon has been under much pressure from the competition as prospective consumers look for cheap pricing and dependable delivery dates to obtain their things as soon as feasible. Since they are now embroiled in a protracted labour dispute, Amazon is likely to see higher labour expenses soon. Rising operating expenses may challenge the capacity of Amazon to sustain its cheap pricing. Moreover, due to the rise of low-cost subscription services like Alibaba and Rakuten, Amazon is experiencing increasing competition. Amazon will need to spend more on marketing and advertising to rebrand itself and maintain its position as a leader in the online retail sector if it wants to maintain its consumer base (STRUHL, 2001).
Market obstacles, including startup capital costs, advertising, and laws, may impact the market performance of a firm and its decision-making processes. Companies need to be aware of how many restrictions they must follow, how much money they have for advertising, and how much starting capital they need to spend.
In the short-run, the interruption to their business operations brought on by the worldwide health epidemic is one of the biggest problems Amazon will encounter. Online shopping demand has suddenly increased, and many consumers have experienced delivery delays. To fulfil consumer expectations, Amazon has been compelled to fast adjust its processes and develop innovative solutions (Godoy et at., 2005).
Long-term political unpredictability will pose a growing threat to Amazon because of the possible repercussions of Brexit and the US-China Trade War. Amazon will also have to contend with the increasing use of alternative payment methods like bitcoin and electronic payments. By expediting the payment process for clients and increasing market competitiveness, adopting these new payment technologies might significantly impact the sector (Harracá, 2017). Amazon may encounter difficulties from new rivals like Walmart, who are quickly joining the e-commerce market and want to take advantage of the expanding popularity of online buying. As a result, Amazon now faces a more challenging competitive environment, which has pressured its price strategy. Another source of competition for Amazon is the expanding omnichannel shopping trend, which allows consumers to buy online and offline goods (Gupta et al., 2015).
When making business choices, it is crucial from a Christian point of view to consider moral concerns and ethical consequences. The Christian worldview promotes honesty in all business choices, highlighting the value of justice and integrity and considering how decisions may affect workers, clients, and society. Regarding Amazon, among other things, moral factors should be considered while recruiting, establishing and providing salaries, and observing working conditions. Furthermore, it is critical that Amazon create a business plan that considers corporate responsibility and ethical issues. For Amazon, this entails considering their social effect and trying to help their clients, staff members, and other stakeholders. Fair treatment of individuals, ethical behaviour, and prudent resource management is required (Adlucent. n.d.).
In conclusion, Amazon competes in a market with an oligopoly structure and is anticipated to encounter difficulties caused by growing labour costs, more competition, geopolitical unpredictability, and the possibility of disruption from other payment methods. Amazon should also consider the Christian viewpoint when making choices and developing strategies to ensure that moral and ethical factors are considered.
Adlucent. (n.d.). The Top Three Amazon Challenges, And How To Solve Them. Adlucent. https://www.adlucent.com/resources/blog/the-top-three-amazon-challenges-and-how-to-solve-them/
Amazon.com Inc – ZIP 98109, NAICS 518210, SIC 7374. (n.d.). Siccode.com. https://siccode.com/business/amazon-com-inc
Godoy, R., Byron, E., Reyes-García, V., Vadez, V., Leonard, W. R., Apaza, L., … & Wilkie, D. (2005). Income inequality and adult nutritional status: anthropometric evidence from a pre-industrial society in the Bolivian Amazon. Social Science & Medicine, 61(5), 907-919.
Gupta, A., Agarwal, D., Tan, D., Kulesza, J., Pathak, R., Stefani, S., & Srinivasan, V. (2015, May). Amazon redshift and the case for simpler data warehouses. In Proceedings of the 2015 ACM SIGMOD international conference on management of data (pp. 1917-1923).
Harracá, M. (2017). Business models and organizational forms: searching the edge of innovation in Google and Amazon (Doctoral dissertation, Master Thesis).
Myers, J. H., & Tauber, E. (2011). Market structure analysis. Marketing Classics Press.
STRUHL, S. (2001, June 1). Market structure analysis: What and how to do it | Article | Quirks.com. Www.quirks.com. https://www.quirks.com/articles/market-structure-analysis-what-it-is-and-how-to-do-it