I need help with a Business question. All explanations and answers will be used to help me learn.
Week 2 Discussion
Respond to the following:
Below is a peer’s discussion post in which I’ll have to provide a response too.
RE: Week 2 Discussion
When it comes to dominance in the marketplace, Amazon is unbeatable. Amazon is beating all competitors, even those that are formidable such as Google and Walmart. There was a time when Amazon was considered the Walmart of the internet. Over the years, Amazon has been able to achieve remarkable gains by providing high quality and services to its consumers and diversifying the products it sells. Amazon’s revenue grew from 71.3% over 2016 to 2018 to $233 billion and shows an expected increase by 50% to nearly $350 billion by the year 2020, according to forbes.com. Amazon’s strengths are its competitive edge on cost leadership, differentiation, and its focus on growth. Every company has its weaknesses, and Amazon is not immune to having them. Amazon lacks an imitable business model, limited penetration in developing markets, and a brick-and-mortar presence. Jet.com was founded by Marc Lore, who also founded a company called Diaper.com, which was a competitor of Amazon. I would consider Jet.com a concern to Amazon because they are targeting the same consumer demographic and offer guaranteed lower prices for their services.
A firm needs to study and understand the external environment for several reason. Understanding the external environment, companies can develop the skills to identify the opportunities and risk that exist. The external environment influences a company’s competitiveness to earn above-average returns. To successfully deal with uncertainty and to achieve strategic competitiveness and thrive, firms must be aware of and fully understand the different segments of the external environment. One way for firms to understand the external environment is to acquire information about their competitors, customers, and stakeholders. With this new information, firms can build new core competencies and create a barrier from threats they may perceive.
Toys R Us is an example of a firm that failed to understand its external environment. Toys r Us didn’t follow market trends and study its consumers. When companies like Walmart and Amazon became dominant forces, Walmart being the one-stop brick-and-mortar and Amazon dominating online shopping toys r us fell behind. The company failed because of a lack of innovation in its business model, failure to incorporate technology or adapt to its changing consumer.