Amazon 2qg6p

AFM 131 Online – Introduction to Business in North America Amazon Prime Video Name Professor: Date: 10/24/2019

1. Introduction: Amazon was established by Jeff Bezos in 1994 in Washington. It is the leading online retailer company which is offering a wide variety of products and services. This company initially starts as an online market for books but later expanded to sell electronics, apparel, video games, food, furniture, toys, etc. Amazon is regarded as a multinational company which mainly focuses on cloud computing, e-commerce, artificial intelligence, and digital streaming. It is one of the Big Four technology organizations along with Facebook, Google, and Apple. However, Amazon is well known for the mass scale technological innovations. It is the largest Internet Company by revenue and the most valuable company in the globe (Jonathan, 2019). Amazon is offering a wide variety of products and services but the most valued product is Amazon Prime Video. It is a Netflix kind of service of streaming which helps to stream on the TV shows demand, movies and a lot more. It used to offer hundreds of hours of content which range from the latest comedy content to documentaries to classic films. It offers thousands of films to their customers in all genres. The full season of TV shows is also added and used to provide plenty of content which is available titles from Showtime and HBO. This service of Amazon is quite similar to Netflix but offers different content (Morgan, 2019). However, it derives high value proposition to customers as it is a great way to keep up with the favorite shows and watch Amazon Original exclusives and much more. It is highly valued by the customers as it used to provide on demand streaming i.e. to watch whenever and whatever one wants, it provides full HD video quality, it provides 4,000 streaming etc. It allows customers to watch from various devices simultaneously with thousands of options i.e. more than 2,000 TV shows and 18,000 movies. There are many other options available in the Amazon Prime Video which are highly valued by the customers (Ladd, 2018) 2. PEST Analysis of Amazon Prime Video: PEST analysis is basically a framework of the factors of macro-environment which is used for environmental scanning of the strategic management. It is generally conducted for a market research and provides an overview of the different factors which are important to be taken into consideration. However, it is a strategic tool which helps to understand the decline or growth of business position, directions and potential for operations (CFI, 2016).

, 2.1 Political Factor: There is a wide range of political factors that influence the activities of Amazon Prime video which is not only limited to the political stability of instability in a state but influences the lobbying and other pressure groups towards their industry in particular. However, the trade unions, freedom of the press and the extent of corruption belong to the list of political factors that impact the practices of Amazon Prime Video. For example, to give access to the people of China, it will cost them quite high due to the trade union restrictions between the US and China. On the other hand, various Chinese companies rise to compete against Amazon (Maas, 2008). 2.2 Economic Factor: The economic stability of developed states like the UK has provided a great likelihood of the success of Amazon Prime Video. This product of Amazon has an opportunity to grow in the developing states. For example, increasing the disposable income in the state like China can boost their financial performance. But the potential economic recession of China threatens the Prime Video of Amazon. China is one of the great economies where Amazon wanted to penetrate increasingly (Emory, 2018). 2.3 Social Factor: The disparity in wealth leads to wider gap between the poor and the rich. In many states, the high disposable income levels are quite favorable in increasing the potential revenue of Amazon services. However, the increased aspect of consumerism provides opportunities for growing the access of Amazon Prime Video. For example, high consumerism in China will ultimately increase the potential success of Amazon Prime Video as more people are willing to watch the content, the more it will benefit the company. Amazon is standing to the benefit from increasing online habits of the people, as more people prefer to see an online product through the Internet all around the globe (Mongabay, 2009). 2.4 Technology Factor: Due to the high technological growth in the sector of technology, Amazon Prime Video has been emerged to provide new and advanced products to its customers which helps them to see instantly

whatever they want to with a lot of options. But to provide its access to other states like China, cost Amazon high. Various other companies have emerged which leads Amazon to put heavy investments in the information technology which could help them to boost and protect the business form the new entrances. The Prime Video of Amazon is a computing technology which has maximized their online productivity and minimizes the operational cost (Kim, 2014 ). 3. SWOT Analysis: SWOT is basically a technique which is used to help an organization to identify their weakness, strengths, opportunities and threats related to the business competition. It helps to specify the main objectives of business and further identify external and internal factors to achieve the objectives. However, it is often described as tried and true tool of the strategic analysis (Abubakar, 2013). 3.1 Strengths: The Prime Video product of Amazon is quite valued by the customers as it provides them whatever they want to see without charging them a high cost. The cost of Amazon Prime Video depends on the package which the customer has chosen. The original package annually costs $99 and to put it in a manner as it works out $8 a month which makes the Amazon Prime Video one of the best deals in streaming. However, Amazon Prime Video has sustained its growth as it used to provide various benefits through its hip to people. The Amazon Prime hip offers great features to c customers e.g. tow day shipping will provide a full library of Amazon Prime Video and over a million songs in the music library of Amazon Prime. These kinds of benefits have strengthened the position and value of Amazon Prime Video all over the globe (Rao, 2011). 3.2 Weaknesses: The major point of weakness is that Amazon Prime Video highly depends on the service of the Internet as if the internet services slow down, this product of Amazon will not work effectively which ultimately impacts its consumerism. However, there are many other competitors of Amazon Prime Video i.e. Netflix which is even offering the same kinds of products as it cost very limited for the startup. Amazon Prime Video needs to have technological innovations and used to provide other incentives to the customers just as their hips etc. to retain the customers as the switching cost is quite low (Jeremy, 2017).

3.3 Opportunities: Amazon Prime Video has an opportunity to expand in all the areas of the globe where people have their significant connections of the Internet. It has led people to watch anything they want at any time. Amazon Prime Video has an opportunity to increase their portfolio where they stock more products than the norm which can ultimately strengthen their position and comfort as it led them to generate high revenues. Moreover, Amazon can open more sites in the emerging markets which can provide them edge in the online market (Emeka, 2015). 3.4 Threats: The major threat which Amazon Prime Video is facing is the high competition. Apart from the video sites, the gaming sites and social media offer a lot of entertainment products which have now become the biggest competitors of Amazon Prime Video. However, the regulatory threats for technology and particularly the internet companies are growing which leads governments to tighten the noose around the companies. Amazon Prime Video is facing high pressure on growth due to such increased regulations (Francis, 2018). 4

Maintenance of Competitive edge:

The Amazon Prime Video has made their sustainable growth and gaining competitive advantage in the online marketing issue to their way of delivering the services and due to the provision of satisfaction to the customers. Amazon Prime Video used to provide the best offers to the customers which do not let them go towards other channels for entertainment. As it is a whole package that provides all kinds of entertainment for all segments of individuals which is providing them a competitive edge. There would be hardly anyone who did not recognize the company as they are delivering A to Z products to the people at a state of comfort (Francis, 2018). With the growing period, the competition in the entertainment industry has been increased. Various companies of gaming and entertainment channels have emerged which are providing the same products and services just like Amazon Prime Video. To maintain or sustain its competitive advocate, Amazon Prime Video is in need to go further towards technological innovations and started to introduce a trendy game plan for the customers which will help them to make an online marketing. This would be a good proposal as it will encourage more people to rely on them and will even do not cost them much high. On the other hand, the Amazon Prime Video is highly

dependent on the services of the internet as customers now want to save time, therefore, Amazon Prime Video should need to connect highly with the Internet companies or should acquire their own company so their customers do not face any difficulty due to internet connections. This will even make Amazon a digital leader which will have a high combination of sustainable advantages which will make hard for their competitors to compete (Jeff, 2017). However, Amazon Prime Video in order to sustain or maintain their completive advantage needs to position their brand further in the mind of consumers. This will lead them to be a leader in the industry and will ultimately provides them huge investments in of time, effort or money which is not an option for everyone. The value proposition of Amazon Prime Video would be a greater value to the customers through the combination of instant access, extraordinary convenience and the wide variety of options. These options to people could provide Amazon a competitive advantage but in order to sustain this advantage, head of Amazon needs to provide low prices and value both to the customers. They should not make a mistake like Steve Jobs who has increased the prices of iPhone which leads a smart market to become a magnet of competition. Moreover, it is a well-known fact that loyalty of high customers presents an insurmountable entry barriers for new entrants who wanted to build a viable scale in new market. Therefore, Amazon Prime Video needs to build loyalty of the customers by providing them technological innovation, low prices with high values to their customers in order to gain competitive advantage (Mohammed, 2018). 5. Conclusion: Conclusively, the above report briefly analyzes the leading digital giant i.e. Amazon and its current development of products which are helping them in gaining a competitive advantage in the globe. There are various efficient products of Amazon but the most influential among customers is Amazon Prime Video. It is the largest entertainment channel provided by Amazon to their customers as it contains wide variety of programs which are highly valued by their customers. However, PESTLE and SWOT analysis have been identified which explains that Amazon Prime Video can grow in states by costing their customers quite low. Amazon Prime Video is facing threat from competitors but to sustain their position, they are in need to go towards more technological innovations which will ultimately provide them a competitive advantage.

Bibliography: Abubakar, N. (2013). STRENGTHS, WEAKNESSES, OPPORTUNITIES AND THREATS (SWOT) ANALYSIS. International Journal of Information Technology and Business Management , Vol.16 No.1. CFI.

(2016).

PEST

Analysis.

Retrieved

from

https://corporatefinanceinstitute.com/resources/knowledge/strategy/pest-analysis/ Emeka, E. (2015). CRITICAL EVALUATION OF HOW WELL PLACED AMAZON IS TO SUSTAIN ITS HISTORICAL IN ONLINE RETAILIN. British Journal of Marketing Studies , Vol.3, No.6, pp.31-42. Emory, T. (2018). The Amazon effect: The good, the bad and the ugly — straight from Seattle . Retrieved from https://www.bizjournals.com/washington/news/2018/07/20/the-amazoneffect-the-good-the-bad-and-the-ugly.html Francis, N. (2018). What's better, Amazon Prime Video or Netflix? Retrieved from https://www.komando.com/tips/443173/whats-better-amazon-prime-video-or-netflix Hana, U. (2013). Competitive Advantage Achievement through Innovation and Knowledge . Journal of Competitiveness , Vol. 5, Issue 1, pp. 82-96. Jeff, B. (2017). Amazon's Competitive Advantage Isn't Cost Or Convenience, It's This . Retrieved from https://www.forbes.com/sites/jeffboss/2017/06/20/amazons-competitive-advantageisnt-cost-or-convenience-its-this/#597bb58e4958

Jeremy, B. (2017). 3 Times Amazon Responded Directly to Competitive Threats. Retrieved from https://www.fool.com/investing/2017/03/01/3-times-amazon-responded-directly-tocompetitive-t.aspx Jonathan, C. (2019). This Week in Amazon: The unstoppable edition. Retrieved from https://www.bizjournals.com/washington/news/2019/10/15/this-week-in-amazon-theunstoppable-edition.html Kim, J. (2014 ). Formulation of a Systemic PEST Analysis for Strategic Analysis . EUROPEAN ACADEMIC RESEARCH, Vol. II, Issue 5. Ladd, B.

(2018). These Tools Are Why Amazon Is Successful.

Retrieved from

https://www.forbes.com/sites/brittainladd/2018/08/27/these-two-things-are-what-makeamazon-amazon/#30f151ad5fd5 Maas,

C.

(2008).

Politics

and

the

Amazon.

Retrieved

from

https://news.mongabay.com/2008/01/politics-and-the-amazon/ Mohammed, S. (2018). How Did Amazon Build Its ‘Sustainable Competitive Advantage’? -The Key Success Factors. Retrieved from https://medium.com/@shahmm/how-did-amazonbuild-its-sustainable-competitive-advantage-88cfee7fe2c8 Mongabay. (2009). Social causes of deforestation in the Amazon rainforest. Retrieved from https://news.mongabay.com/2009/09/social-causes-of-deforestation-in-the-amazonrainforest/

Morgan, B. (2019). Amazon Prime Day Aims To Focus On Customers Amid New Competition. Retrieved from https://www.forbes.com/sites/blakemorgan/2019/07/03/amazon-primeday-aims-to-focus-on-customers-amid-new-competition/#1fd3e1a54871 Rao, V. (2011). Why Amazon Is The Best Strategic Player In Tech . Retrieved from https://www.forbes.com/sites/venkateshrao/2011/12/14/the-amazonplaybook/#18dc1b173bcb