• Amazon Pestel and Swot 2018

4.0 Amazon Porters Five forces 2018

4.1 Threat of entry/ barriers to entry

In any industry, threat of entry will depend on the extent of the barriers to entry (Johnson et al 2008). In the case of Amazon, threat of entry is very low because the retail giant has created a monopoly where ever it operates in that competitors have had no option but to operate through its platform. The company has also used below - cost selling to crash and then absorb new competitors like Zappos and Quidisi  (Mitchell 2018), this would make it hard and costly for any new company to try to enter and compete due to expected retaliation of Amazon thus making the threat of entry very low. In USA, Amazon captures every 1$ of 2$ that Americans spend on line, the e-commerce giant’s website has dominated online retail sales attracting half of all USA shoppers and hosting thousands of third party sellers (Mitchell 2018).

In UK, Amazon has also dominated the market commanding 29.7% followed by Sainsbury’s and Tesco at 6.5 battering the survival of most British high street retailers (Chambers 2018). Retailers like New Look, M&S among others have been forced to close most of their stores (Cox and Musaddique 2018).

4.2 Bargaining power of buyers

When it comes to Amazon, the bargaining power of the buyer is low considering the fact that the retailer has dominated the market and online retail sales with its low costs making it hard for buyers to shift to other retailers. According to Mitchell (2018), by 2014, almost 40% of people looking to buy something online were skipping search engines and going directly to Amazon. This grew to 55% by the fall of 2016 and has continued to grow. The fact that most of its competitors have also not had an option but to operate on its platform shows how powerful Amazon is, at making the bargaining power of the buyer low.

4.3 Bargaining power of suppliers

According to Johnson et al (2008), suppliers can ha