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Amazon.com: Perform a SWOT analysis by identifying the company's strengths, weaknesses, opportunities, and threats

1. Perform a SWOT analysis by identifying the company's strengths, weaknesses, opportunities, and threats.
2. After reviewing the SWOT analysis of Amazon, propose strategies to take advantage of their weaknesses to help increase your market share.

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1. Perform a SWOT analysis by identifying the company's strengths, weaknesses, opportunities, and threats.

Strengths

Strong Global Brand
The company has a strong brand image, which it continues to leverage, enabling it to
launch multiple product segments such as consumer electronics, toys, and auctions,
to satisfy its expanding customer base of more than 26 million people. The company
has extended its recognition globally with sites in Canada, France, Germany, Japan,
and the UK. A strong brand image provides a competitive advantage in the online
retail industry.

Efficient Business Model
Company's business model offers significant earnings leverage not often found in the
tradition retail business model. Amazon's revenue grew by 34% in 2003, while
recurring operating expenses grew by only 15%. Amazon's business model allows it
to sustain high margins since the company has relatively fixed costs for its marketing,
fulfillment, general and administrative, and technology content expenses. Amazon
has the ability to grow unit volumes and total revenue while only increasing its direct operating costs by a relatively small amount. The operating leverage created by the
company enables Amazon to deliver the majority of its incremental gross profit dollars
to consolidated operating income, EBITDA and free cash flow.

Negative operating cycle
Since Amazon is able to turn its inventory quickly, it has a negative operating
cycle that is a source of cash flow. On average, Amazon's high inventory velocity
means it generally collects from its customers before payment to suppliers is due. The
company has an inventory turnover of 18, 19, and 16 for 2003, 2002, and 2001.
Negative operating cycle ensure a uniform flow cash for the company.

Weaknesses
Free shipping costs
Amazon offers an everyday free shipping option ...

Solution Summary

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"Since Amazon is able to turn its inventory quickly, it has a negative operating cycle that is a source of cash flow. On average, Amazon's high inventory velocity means it..."

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