Amazon is a US multinational, specialized in the electronic commerce. This company started as an online bookstore. Since 1998, the company sells many products as CDs, DVDs, cars, TV, etc.
The French subsidiary company was launched in 2000.
The e-commerce market is growing up moreand more in France within the space of a few years. In fact the turnover of the e-commerce increases year by year in 2008: 20 billion € (16.946.958£) 2009: 25 billion € (21.183.833£), 2010: 31.4 billion € (26.605.594 £) (http://www.cci21.fr). We can explain that due to the increase of the number of buyers increases e.g. 2008 22 billion buyers 2009 24.4 billion buyers thus an increase of 11%(http://www.cci21.fr).
First, I will analyzed the Amazon’s competitive position on the French market using Porter’s five forces to show the development of the e-business and the effect it has had on existing retail industries, secondly the SWOT of it in France and finally it success.
I use the Porter’s 5 forces to evaluate the attraction and the structure of the market toexamine the competitive environment of Amazon on the French market.
Porter’s 5 Forces
by Michael E. Porter, 1980
The strength’s position of the customers can concern the distribution, the consumers and the other companies. The consumers and the customers hold a position of strength when the offer is plentiful and little differentiate (Management Stratégique by ulrike Mayrhoferedition Breal p15). It is the case on the French market, because Amazon it is not a monopoly, it has a lot of rivals e.g Ventes-Privées.com, Priceminister, ebay ect. The E-commerce’s offer is important so consumers can choose the website that he wants, his power of negotiation is very important.
Moreover, Amazon offers a wider range of products at a lower cost than a traditional retailer. Thee-business advantage does not have the opening and running costs of a high street store so it cans make many discounts. Another important advantage is that buyers can buy all the time and everywhere. French people spent 7, 2 billion € (6.099.725, 27£) on Internet in the first quarter 2010 according to figures brought back by the panel ICE.Percentage of online buyers
Source: Médiamétrie, September 2010 (http://www.journaldunet.com).
This graphic shows the percentage of online buyers in France in September 2010. We can see that 72% of the buyers use internet to buy something, they do not buy regularly but they have already buying with internet for example train ticket. Before in France, there was two categories of buyers thetraditional who bought in a traditional retails they were more important because the access at internet was not easier and the older person did not used internet and the online buyers who was younger. Now, we can see more and more people who buy with internet because the access is simple and they can buy all the time. Furthermore, they have a large choose of products.
Souce : Fevad(http://www.cci21.fr).
This other graphic shows, that 71 % of the Internet users have already made a purchase on Internet in the trim 1st. 2010 against 47 % a same period of 2005.The number of on-line buyers increased by 118 % in 5 years against only an increase of 41 % of Internet users. The sales of the e-commerce improved between the beginning of 2009 and 2010: + 15 % of on-line buyers(http://www.cci21.fr).
The French’s buyers have an important power because they can choose to buy with a lot of websites, traditional retails or to use substitutes. Thus, their power of negotiation is important.
Threats of Substitutes:
The threat of the arrival of substitute products depends on the possibility of replacement of existing products by new products. These products have to fill the same functions...