Amazon has a service called Amazon key, which provides a safe way to allow delivery drivers inside your home, even when you’re not there, and also for your families, friends, and pet sitters… The owner of Amazon key can watch from their phones as the camera records the whole thing. Amazon key will be launched on November 8 for Prime members, whether the product can success or not should be considered.(Jill Disis, 2017)
Porter’s five forces analysis can be used to evaluate. The barriers to entry means the ease with which other firms can join the industry and compete with existing businesses. For Amazon key, as it is a new and non-popularized technology, the technology needed to enter the industry would be relatively high which could stop many businesses from following or plagiarizing. Also, the importance of product differentiation is high, most consumers who would buy Amazon key may because of its advanced functions and this is also why Amazon key is different from and better than other products.Therefore, the barriers to entry this market is high and the threats of new entrants is low.
The supplier power is relatively weak, Amazon key is more likely to have its own research and development department, and it may only need some raw material to produce, in this case, Amazon key may not rely much on suppliers and it is easy to find other suppliers to replace the current supplier if it is needed.
As for the buyer power, as Amazon key has not been launched yet and it is a new kind of products, many consumers may not buy it at the beginning until others buy it and give positive comments, therefore the sales volume may not be much. The brand identify is high as Amazon is a very well-known brand with good reputation and Amazon key is a very differentiated product. The price of Amazon key starts at $249.99, which would beyond consumers’ expectation as it is not a necessary good , many consumers may choose not to buy because of the price, combining these above, the buyer power would be moderate .
The threat of substitutes is moderate, too. According to the reports, Walmart tested the similar service last month which was a service that allows a delivery driver from the startup deliveries into your home, therefore, there are substitutes for Amazon key but may not be much as this technology is not popularized.(Jill Disis, 2017)
Due to the analysis above, the competitive rivalry is low in general, and this means the level of competition or rivalry in this industry is low, which shows it is a good decision for Amazon to launch Amazon key.
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Reference: Alexa, is it a good idea to let strangers into my house?
Retrieved from: http://money.cnn.com/2017/10/25/technology/business/amazon-key-delivery/index.html
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