This paper presents a consultant-style SWOT analysis of Amazon within the context of e-commerce communication and information technologies. It examines Amazon's strengths as a cost leader with superior IT capabilities, its weaknesses around zero-margin strategies and tax-evasion tactics, and its opportunities and threats in a competitive digital marketplace. The paper introduces Boxed® as a rising competitor that has outpaced Amazon in customer-facing communication innovation. Based on the analysis, the paper recommends that Amazon adopt DIVA — a groupware communication and collaboration tool proposed by Sohlenkamp and Chwelos (1994) — to enhance virtual team collaboration through synchronous and asynchronous communication in a shared virtual office environment.
This paper examines communication and information technologies that help e-commerce firms perform work in a virtual environment. It adopts the approach of a consultant tasked with conducting a SWOT analysis of Amazon. Based on that analysis, the report recommends that Amazon adopt DIVA, a groupware communication and collaboration tool proposed by Sohlenkamp and Chwelos (1994). The model will help Amazon compete with newer e-commerce firms such as Boxed®, a wholesale competitor that has efficiently used communication and information technology tools to carve out a niche in the market.
Businesses increasingly provide telecommuting facilities for their employees. To support this working model, internet and intranet systems are used as communication channels. To communicate through web-based applications and systems, employees require effective communication skills — both formal and informal. The remote working model requires that employees collaborate with employers through reliable and cost-efficient tools.
The impact of these new communication systems is substantial. Time and travel expenses for each employee are reduced, and companies can direct resources toward hiring experts who enhance communication capabilities. The latest communication systems, built on private intranets, also help increase inter-group proximity within virtual teams. Real-time team communication and work-report tracking are made available through these telecommuting technologies (Cascio, 2000).
Information and communication technologies (ICT) also allow e-commerce firms to develop dynamic teams comprising multi-skilled members who join work from different locations. Email, voicemail, video conferencing, and messaging through social media platforms such as Twitter, Facebook, and LinkedIn are used for work-related communication in virtual environments. Computer-aided design (CAD) and spreadsheet tools are used to communicate work progress within virtual teams. The following SWOT analysis of Amazon identifies areas in which the company requires improvement.
Strengths: The main strength of Amazon is its position as a cost leader in the e-commerce retail industry. The company offers the widest range of product categories to customers. Economies of scale in Amazon's operations allow it to offer consistently low prices, exemplified by its well-known "refund the difference" offer.
Renowned supply chain: Amazon's supply chain is among the most recognized in retail. It maintains the largest number of fulfillment warehouses across all markets in which it operates, with each fulfillment center strategically located within the geographical areas it serves.
Superior IT capabilities: Amazon's information technology capabilities are also superior to those of its competitors. The company offers transactional security and order-status monitoring to customers. Leveraging excess server capacity, Amazon has also expanded into cloud computing services.
Weaknesses: Amazon relies on its market share leadership as a primary competitive advantage. This approach leaves the company with zero margins in several product categories. The company predominantly depends on cost-cutting methods, which have included tax-avoidance tactics that have recently backfired.
Opportunities: Online money transfer systems — such as those operated by PayPal — are experiencing rapid growth, and Amazon, already a cost leader in e-tailing, could venture into financial services. Expansion of e-commerce services into the Asia-Pacific and Western Europe regions represents another opportunity the company can leverage.
Threats: Due to aggressive cost-cutting strategies, Amazon faces increasing pressure from e-retailers that offer differentiated products and services. Tax-avoidance tactics in the United Kingdom also constitute a potential legal and reputational threat. Additionally, the security of clients' personal information remains a significant ongoing threat.
"Boxed® as an innovative upstart challenging Amazon"
"DIVA groupware recommendation for Amazon virtual teams"
"Cited academic and journalistic sources"
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