Porter's Five forces - Amazon

At the start of 2021, Amazon is known to more than 99% of consumers around the world. Its turnover in the third quarter of 2020 amounts to $ 96.1 billion, or just under 95 billion euros, and is still experiencing rapid growth, especially since the start of the pandemic linked to Covid-19.

Amazon

Photo Credit: Unsplash Christian Wiediger

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The group also recorded a profit of 6 billion euros during the same period. Amazon Prime has 150 million subscribers worldwide. With regard to e-commerce, Amazon totals more than 60% of sales, all sites combined. Today it is one of the largest virtual supermarkets in the world.

New entrants

Amazon is the undisputed leader in its segment, which does not prevent the arrival of potential new entrants on the market. For the moment, the threat remains relatively low, especially since the barriers to entry may turn out to be more numerous than it seems. Indeed, Amazon is a group that has several warehouses around the world and which itself provides its own delivery system. Consumers are happy with its very responsive customer service, no matter the time of year. The new entrants come up against the supremacy of the American giant, and they must gain the trust of the public, which is not always easy because it requires very organized logistics.

Substitute products

Amazon sells all kinds of products in all areas, and many traditional sites or stores can replace the service offered by the group. A large number of brands are represented in the field of ready-to-wear clothing or even children's toys, stationery or others, and consumers can find the vast majority of these products in physical stores or on other sites.

The bargaining power of suppliers

Amazon is a group that takes up a lot of space in the market, which leaves very little room for manoeuvre for suppliers. Suppliers remain important, as they remain the guarantors of buyer satisfaction, but their power largely depends on current trends. A hugely successful product must be able to continue to be delivered because for the distributor it is important to be able to meet consumer expectations at all times of the year.

The bargaining power of clients

Globally, customers are much more demanding, and Amazon has a duty to remain competitive to satisfy them, and this includes, among other things, the quality of the packages and the delivery times. The quality of after-sales service is also essential. The bargaining power of customers is necessarily important since competition remains very fierce in the e-commerce segment.

Analysis of existing competition

Amazon is certainly a leader in the segment, but this does not prevent competition from developing and also offering advantages for consumers.

The main competitors are Rakuten, Le Bon Coin, Cdiscount, or even Alibaba, which is considered to be the real competitor of the American giant.


Sources : Blog du modérateur, l'Opinion