Amazon Porters Five Forces and BCG Analysis 2018

By: Prudence K Magezi

The level of profitability that Amazon enjoys in the ecommerce industry will be determined by systematic sources of competition that exert pressure on all ecommerce firms, making the industry either profitable for incumbents or a nightmare of price competition that leads to weak profit margins. Due to various factors including a winning strategy that has enabled Amazon sustain a competitive advantage over the years, the systematic sources of competition that influence competition and profitability in an industry have had minimal influence on the online retailer. Using Porters five forces, this report examines these sources of competition starting with competition from substitutes, competition from new entrants and competition from established rivals. The report then examines why the influence of buyer and supplier power on Amazon has acted to strengthen the book retailer rather than weaken it.

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