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Social Media Carries on the Profit Margin for Amazon

University: London Metropolitan University

  • Unit No: 9
  • Level: Undergraduate/College
  • Pages 10 / Words 2500
  • Paper Type: Assignment
  • Course Code: MN6062GN
  • Downloads: 77
Question :
  • 1a. Critical Evaluation of social media as a core competence for gaining competitive advantage for Amazon.
  • 1b. Conducting an analysis of 2 social media platforms as a an approach for effective marketing tools in United Kingdom.
  • 2a. Critical analysis of the impact that social media carries on the profit margin for Amazon in the last 3 years.
  • 2b. Analyse the manner in which social media will be used in the future and how its affects business in the next five years.
Answer :
Organization Selected : Amazon

Introduction

In present time, social media marketing is playing significant role among people and companies in all over the world. There are large number of companies who are advertising products and services on social sites in respect to create brand awareness and enhance sales (Armstrong, Kotler and Brennan, 2015). Customer are highly influenced by the methods used by companies for promoting products on social networking sites. The present research is based on Amazon company who is continually using various social networking platform to create brand awareness and profits. This report will cover, merits and demerits of using social networking sites. Apart from this, the trend in Amazon’s net profit margins over the three years will be discussed.

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1a. Evaluating the social media as core competence

a.) Organisation and its core competence

Amazon is one of the top electronic commerce and cloud computing company which has become an popular in internet business. It is known as one of the largest internet retailing company in all over the world which sells wide range of products from books to electronic worldwide. Product of the firm are displayed with great advertising publish with the use of press release. A core competence is the result of a specific unique set of skills and production techniques which deliver value to the customers. These types of competence provide the firm to a widespread variety of market (Marchand, Hennig-Thurau and Flemming, 2018). The firm focus on making strong relationship with its customer in respect to retain them for longer time. Here, Amazon use social media in order to keep regular communicate with its customers. They send promotional emails to customer through providing various offers. Along with this, Amazon take review of its customers on Facebook, Twitter and another social media platform. Superior quality products and services is provided by Amazon. Its online services are convenient, reliable. Firm actively use social networking sites in respect to respond its customers on time, and for advertising products and services. Through responding on social networking sites made easier for the firm in enhancing their customers satisfaction level.

b.) Merits and demerits of social media

Social media has basically change the way firms interact with its public and its potential customers. Use of social media by firms drive lots of benefits that are as follows:

Increase brand awareness: With the use of social networking site Amazon can enhance its business visibility (Leung, Bai and Stahura, 2015). Along with this more and more customers came to know about company and its quality products. They can easily see the information of product and price which help them in differentiating their firm products from others.

Enhance sales: Sales can be increase of the firm if company use social networking sites in an effective manner. When customers watch any product with offer on Facebook or other social sites, their buying behaviour get influence and they make purchase decision. It lead to increase sales of the firm and enhance profit.

Some of the disadvantage of social networking sites are as known as unclear social media marketing strategy which lead to reduce benefits. Along with this, negative feedback can directly impact the firm and image (Leung, Bai and Erdem, 2017). It is because social media users have free rein to post whatever they want therefore. If customer is not satisfied with the products then they may put negative feedback on their Facebook page.

c.) The way social media is used by Amazon.UK to gain competitive advantage.

Social media is known as one of the effective platform that provide huge opportunities to companies in order to advertise and promotes their products. Amazon company is receiving benefits through effectively using social networking sites. For instance, Amazon is getting into Instagram and Pinterest territory with its new Spark (Tiago and Veríssimo, 201

b.) The trend in Amazon’s net profit margins over the three years

From the above mentioned financial statement it is clearly reflected that company that profit of Amazon company is increasing respectively year by year. Gross profit of the firm in 2015, 2016 and 2017 was 21,945, 25,917 and 36,577. It clearly shows that company has made good profit through increasing sales of its product. The reason of increase in the profit is effective social media marketing strategies performed by the firm (Liu, Lee and Chen, 2018).

c.) The impact of social media on Amazon’s profit levels

Social media has put great impact on the profit level of Amazon. At present Amazon has over 28.7 million likes in its Facebook page. It is an incredible figure, looking at its news feed it is easy to understand reason of its popularity (Hyder, 2017). Amazon replies to its customers on comments which are left by customers on its post. Along with this it does this all activities quickly, politely, provides wide range of information and links. There are few examples below (https://etaileast.wbresearch.com/amazons-engaged-buyers-drive-social-media-revenue).

Twitter: At present the Twitter campaign is more effective in order to promote the products and services. The firm has more than 2.7 million followers toward Amazon and its additional services are prime video, Amazon music etc.

These all lead to put impact on the firms profit as because people came to know about Amazon product and services. Through putting attractive post on the Facebook, company become more aware of the product and services which motivate them to make purchase decision. Along with this people use this social networking daily and through looking over the company post again and again with exciting offer motivate them for purchase

2.b The future of social media and its implications for business

a.) The current impact of social media on the bottom line

Following the current impact of social media on the bottom line business it is analysed that in future social media will become more interesting tool for the business.

Online networking is giving media stages to make content and circulate thoughts. It enables people to make substance and add to more extensive discussions which is required an all around financed media organization (Leung, Bai and Erdem, 2017). Presently all that is required is a PC, tablet or cell phone associated with the Internet. The Arab Spring uprisings in 2011 connected past the nearby circumstance to include a worldwide crowd.

Facebook and LinkedIn these have incredible lead age arrangements worked for a portable audience. This is a major open door - and company would prefer not to pass up a major opportunity for. It's vital to manufacture a solid online networking publicity muscle now. Advertisements don't need to be a piece of each crusade, yet company ought to dependably think about it. Technologies are upgrading as it leads to bring more innovation in social networking platforms. In future social media platform provide lots of opportunities to the firm and also improve their way of working. However, there are some prospects for business outside the social media such as traditional method of marketing which are also effective. Due to new technologies there is scope that companies can use another medium that business can ride in the next five years.

b.) Changes affect businesses in the near future

These all changes can affect business in the near future. It will provide lots of opportunities to the firm in respect to gain profit. In future companies get lots of opportunities for marketing their products and services. There are many new technologies will be introduced in the market in respect to advertise the products, therefore companies will not remain dependent on the social networking sites

c.) Position company to take advantage of the changes

The firm can take advantages from this through using social networking sites in an effect.

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