Situation Analysis: What Do The Customers Buy Or Use? (Essay Sample)

Situation Analysis
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Institution
Situation Analysis
Customers
Who are the current customers/users? Include information related to demographics, psychographics and buying behavior, price sensitivity, customer satisfaction and loyalty.
Amazon’s target customers include the high and middle-income individuals that rely on the internet to do their shopping. This could be because they do not have time to visit physical stores to make purchases. Amazon uses demographics and psychographics to segment its customers to achieve maximum productivity. Some of the elements in demographics include age, geographical locational, gender, and levels of education. For instance, the company has set up affiliate websites that provide services of a particular target group. Some sites running under Amazon provide educational content in the form of bookstores. Besides, Amazon has managed to target different age groups depending on their tastes and preferences. It has availed a platform where the young generation can access music and videos (Buzz, 2013). Also, the organization has put into consideration customers from different geographical zones by ensuring that their domain is readily available in their countries.
On the other hand, Amazon has segmented its customers psychographically based on their interests, lifestyles, beliefs, and cultural norms. For instance, rather than displaying all their products on a single website, they have allocated their goods to different sites depending on the nature of the customers. Examples are the websites under Amazon that provide high-end products for individuals with flashy lifestyles. Also, video gamers can easily access a broad range of online games from Amazon while new homeowners can shop online for house furniture and electronics.
What do the customers buy/use?
The company offers a significantly wide range of products to its online customers. Initially, it began as a web based bookstore for its customers. Over time, it increased its range of products to electronics and home appliances. However, Amazon currently deals in all categories of products such as clothing, foodstuffs, books, furniture, medical equipment and supplies. It is possible to conclude that Amazon is a one stop shop for its online clients.
What changes can the company/brand expect in the future? How can the company/brand better serve its customers? Include information about potential opportunities and threats.
Over the years, the Amazon brand has experienced massive growth due to its ease of use and accumulation of a large customer base. However, there is still room for the company to grow even further if they would expand their operations on a global scale especially into Asia and other developing countries. Besides, they should look forward to opening physical stores outside the US to increase their profitability. More acquisition of the e-commerce platforms would also guarantee the company massive market leadership (Buzz, 2013). However, the company is likely to experience increased competition since there are limited barriers of entry into its market. Besides, some foreign government regulations pose a massive challenge towards its expansion into such countries.
Company
Identify strengths and weaknesses of the company/brand as it exists today. What does the company/brand do well and not so well at this very moment?
When assessing the strengths of Amazon, it is evident that it has a stable foundation that has helped it increase its range of products. Besides, its financial security makes it possible to expand into new territories. The company boasts of an efficient distribution channel hence its products reach clients in time even in remote areas. Also, the firm’s cost leadership abilities enable it to provide goods to customers at relatively lower prices through maximization of economies of scale. However, some weaknesses in the company reduce its capacity to maximize profits. A good example is the fact that currently, its extensive distribution channels and price wars limit profit maximization (Buzz, 2013). Also, business has not picked up well in some developing markets that it has penetrated leading to operating in losses. Cases of tax avoidance by Amazon have also been reported, and these incidents have tarnished the company’s reputation. To counter such weakness, the company should evaluate the sectors of operations such as distribution and finance and implement measures to avert the challenges. For instance, it should instill a policy that sees to it that taxes are paid promptly.
Context
Define the current business environment. Include information about political, legal, economic technological and societal factors that may influence sales.
A PESTEL analysis is used to assess the current business environment of Amazon. It takes into consideration the political, economic, social, technological, environmental, and legal factors that may affect the company’s sales. For example, politically, some countries have put in place lots of paperwork and red tape that makes it difficult for Amazon to penetrate. Some nations have implemented policies that will increase taxation implying that the firm’s profit potential in such countries will be limited. Economically, the retail industry is never affected significantly even in periods of economic recession. However, lately, the minimum wage of the labor sector has experienced a significant increase, hence more disposable income. This implies that people are likely to buy more from Amazon if not from its competitors. Socially, there has a significant shift from physical shopping to online shopping. This could be attributed to the increased ownership of smartphones and use of the internet (Buzz, 2013). This implies Amazon is likely to receive more customers. Also, change in demographic trends such as more application of online shopping by young people is likely to boost the Amazon’s sales. Technologically, the advancement in internet speed has facilitated more people to use the internet hence accessing services from online marketing platforms. Also, the increased use of social media provides a medium through which Amazon can advertise its products and services. Environmentally, Amazon has made steps towards environmental conservation thro...