This case study on Amazon deals with the central question of whether the company, as the largest e-commerce platform, can use its popularity and large number of customers to gain a foothold in the offline retail segment.
The case study includes several analyzes and solutions. The central question should be clarified as to whether entry into the stationary trade makes sense and which important details and steps must be taken by the founder Jeff Bezos in order to make this another Amazon success story.
Table of Contents
1. Introduction
1.1. Central question
2. Starting situation
2.1. Facts and Figures
2.2. Competitors in online retail
3. Amazon Go
3.1. Industry structure analysis by Porter
3.1.1. Customer bargaining power
3.1.2. Rivalry between companies in the same industry
3.1.3. Danger from new competitors
3.1.4. Danger from substitutes
3.2. SWOT Analysis Amazon Go
3.3. The strategy
4. Expansion of Amazon Elements and opening of "Pick up Stores"
Objectives and Topics
This case study examines Amazon's strategic expansion from a purely online platform into the stationary brick-and-mortar retail sector. The primary research question addresses whether it is viable for Amazon to enter offline retail and what strategic steps are necessary to ensure the success of this transition.
- Analysis of Amazon's current market position and financial performance.
- Evaluation of industry competitive dynamics using Porter’s Five Forces.
- SWOT analysis of the Amazon Go store concept.
- Assessment of strategic alternatives for expansion, including private labels and "Pick up Stores."
Excerpt from the Book
3.1.1. Customer bargaining power
Since Amazon Go is a new store concept and the Amazon brand is one of the world's best-known brands, Amazon Go will attract a lot of new customers. They will be very curious about the innovative concept or the supermarket of the future. Customers will find a new shopping experience that no other supermarket can offer. Queues at the cash desk are a thing of the past and the purchases can therefore be made faster and less complicated. Amazon Elements offers products that cannot be bought anywhere else and is therefore not comparable to other food chains. Private labels are in vogue worldwide and for many customers, the low price is a big plus for visiting Amazon Go. With this customer base, Amazon can achieve higher margins, especially by offering private labels.
But there will also be a customer base that will avoid these stores because of privacy through the records of purchases and because of concerns about the destruction of future jobs. This customer class prefers to shop at the traditional supermarkets. Even the older generation is not as IT-savvy as the younger people and, even if some want to try it, will probably avoid these stores. In addition, the quality of the products, the high density of competitors in the food sector and the lack of personal contact will play a major role in the decision to visit Amazon Go. The customer's bargaining power will vary in several countries. The locations are of great importance here. In the medium term, one can assume a medium to high bargaining power of the customer due to the above-mentioned factors.
Summary of Chapters
1. Introduction: Outlines the company's background and defines the central research question regarding Amazon's entry into physical retail.
2. Starting situation: Provides an overview of Amazon's history, financial growth, and its competitive landscape within the online retail market.
3. Amazon Go: Analyzes the Amazon Go store concept through Porter's industry structure analysis and a comprehensive SWOT evaluation.
4. Expansion of Amazon Elements and opening of "Pick up Stores": Proposes strategic solutions for Amazon's offline expansion, emphasizing partnerships and the integration of private labels.
Keywords
Amazon, Amazon Go, Brick-and-mortar retail, E-commerce, SWOT analysis, Strategic management, Porter's Five Forces, Private labels, Customer bargaining power, Digitalization, Market expansion, Supply chain management, Stationary trade, Competitive strategy
Frequently Asked Questions
What is the core focus of this study?
The study investigates Amazon's strategy to move beyond its dominant online position to enter the physical, stationary retail sector.
What are the primary thematic areas covered?
The paper covers financial performance, competitive analysis, the technological aspects of the Amazon Go concept, and strategic growth opportunities.
What is the central research question?
The research asks if it makes sense for Amazon to enter brick-and-mortar retail and what specific steps are required to make this expansion a success.
Which methodology is employed in the analysis?
The work utilizes a combination of financial data review, Porter’s Five Forces industry analysis, and a SWOT analysis of the Amazon Go concept.
What is discussed in the main body of the work?
The main body focuses on the "Starting situation," the "Amazon Go" store concept, and a concluding section on future strategies for "Pick up Stores."
Which keywords define this work?
Key terms include E-commerce, Stationary trade, Amazon Go, SWOT analysis, and Strategic management.
Why does the author argue that private labels are important?
Private labels, such as Amazon Elements, allow Amazon to differentiate its offerings and achieve higher profit margins compared to standard retail items.
What is the main risk identified for the Amazon Go model?
The study identifies privacy concerns regarding purchase data and the potential non-acceptance of the cashless, sensor-based store concept by some customer segments as major risks.
How should Amazon approach the stationary market according to the author?
The author suggests a hybrid strategy, favoring the expansion of private labels and "Pick up Stores" through strategic partnerships rather than purely focusing on the high-investment Amazon Go branch network.
- Quote paper
- Fredi Oberegelsbacher (Author), 2018, Case Study Amazon. Entry into stationary retail?, Munich, GRIN Verlag, https://www.grin.com/document/1222584
