The case describes two major dilemmas for Amazon’s expansion in Europe.
First dilemma is about options to expand: Sweden has a sizeable and mature market, but Amazon is already #1 retailer through Amazon.com; Poland has the highest growth potential, but the strong local player dominates there. Switzerland looks to be the most attractive option with moderately growing market and no clear leader.
To succeed Amazon has to be ready to compete on categories level where strong local or international players operate. What is more controversial, key competitor for Amazon.ch may become Amazon.de, which is already #4 by sales on Swiss e- commerce landscape but has a lot of issues due to complicated VAT reclaiming process and goods return by the customers.
Defining value proposition for Swiss market clearly is the major task for Amazon and it clearly depends on giant’s capability to set the right delivery model and carefully selected Prime offering positioning.
This case may be used to achieve several learning objectives:
- How to define priorities for international expansion of the company.
- How to analyze existing competitive landscape on the target market with focus on value propositions by the rivals.
- How to define attractive value proposition based on existing pain points of the customers.
- How to define applicable business model considering market specific and expected value proposition to be delivered.