Write the 2 strategic analysis from below cases which Identifies the relevant theoretical issues underlying the problem of Amazon. With the use of data from Mergent Online, we were able to calculate Amazons ROCE over five successive years (2015-2019). In addition, we also calculated its sales margin, cost of goods sold ratio, depreciation ratio, SG&A ratio, asset turnover, fixed asset turnover, and inventory turnover. All the data was put in a table on Excel to facilitate the analysis (Table 3). For the five years of data, we can point out that Amazon had its highest ROCE in 2018 and decrease during the last year. The ROCE was increasing from 2015 to 2018. The higher the ROCE, the better it is. it facilitates profits investment by the company which benefits the shareholders. The slight decrease in 2019 can be alarming for the shareholders questioning their investments, but we should not worry much about where the company is going because it has been performing well in 2019. Amazon still managed to keep its ROCE above 10%. According to an article on Amazon capital from Yahoo Finance, the Online Retail industry has an average ROCE of 10% (Simply Wall St). The ROCE for 2019 was 10.2%, and it suggests that the company is doing a better job than similar companies at utilizing its capital. Amazons ROCE numbers over the five years listed look very decent. It doubled from 2015 to 2019. Even though, ROCE decreased for 2019, the company could be improving. In fact, due to the coronavirus pandemic, Amazon was able to generate more sales than the previous year. Sales in the third quarter 2019 were $69.98 billion, increasing by 37.4% for the same quarter in 2020. A boom in the economy can be very positive for a firms ROCE. Leaving Amazons return on capital employed on a good note, we can now mention it sales margin which look better than the ROCE. At the end of 2019, Amazon had a sales margin of 41%. Its sales margin has been increasing every year on a five-year trend. This is a positive point for the company especially because it allows us to determine if Amazon has been profitable or not. In this circumstance, we can affirm that the company was generating profits from the sale of its goods and services. In the competitors table on Mergent Online, we can observe Amazon at the 15th position for sales margin. However, taking a closer look allows us to spot Alphabet Inc. Google has a sales margin of 55.58% which is 14.58% more that Amazon. Both companies have good ratios, but in this category, one could say that Google is clearly doing something better than Amazon. The rate at which Amazon is currently going could be an indicator of its future sales margin performance. The end of 2020 could reveal a very good improvement. Amazon is always projecting itself in the long-term, and that is very helpful for it because Amazon will anything possible to improve its numbers year over year. Over the last five years, Amazon has improved its cost of goods sold ratio along with its inventory turnover. The cost of goods sold ratio has been declining every year to reach 59% at the end of 2019. Every company wants a lower cost of goods sold ratio. A low ratio would imply that producing a product is cheaper compared to the sales that have been generated. Keeping this ratio has a good impact on the company as it was able to increase its net income every year. Observing the Income Statement, we cannot dodge the improvement that has made. While both its sales and cost of sales were increasing on a 5-year period, the firm managed to increase its net income every year. In 2019, Amazons net income is 19.4 times what it was in 2015. We also obtain very good results with the inventory turnover. Usually, the higher this ratio is, the better the company is selling and replacing its inventory during a given period, in this case, a year. The ratio went from 10.45 in 2015 to 13.69 in 2019. An inventory turnover ratio is said to be ideal when it is in the 4 to 6 range. In this case, we can acknowledge that Amazon have amazing management skills. If the company is able to improve this ratio in the future, it could gain an even more significant competitive advantage over companies such as Walmart. On the other hand, the asset turnover a been declining every year, getting closer and closer to 1. This ratio is used to determine how efficiently a company uses it assets to generates sales. A number over 2.5 is ideal in the retail industry. Amazon had an asset turnover of about 1.25 in 2019. 1.25 are engendered per dollar of assets. In this specific case, it is hard to say that the company is not using its assets to increase its revenue due, to the size of the investments the company makes in assets. The more Amazon continues to acquire other companies over time, the more likely for this ratio to keep declining if it does not provide more sales than it has assets. The assets turnover is a ratio that is considered by potential investors in a company. Amazon should make strong effort to have a ratio that is standard to its industry. The declining of this is also driven by Amazons innovation. These last years, Amazon has come up with new devices such as Alexa. The way Amazon innovates makes it hard on its short-term overall performance. However, it could positively impact its future, and for this firm, it is the desired result. It would be better for the company as it would attract the eyes of the investors. We could see this number increase in the next years due to the coronavirus pandemic which shifted the way online shopping is seen. Similarly, the company has also seen its fixed asset turnover decline from 2015 to 2017. It went from 4.9 to 3.64 in those three year, then bounce back with slight increase in both 2018 and 2019, 3.77 to 3.858 respectively. The fixed assets turnover ratio indicates how effectively the company generates revenue from its fixed assets. The decline in the number could also be due to the acquisitions the company has made. Fortunately for Amazon, improvement has been made slowly but surely. Amazon could make even more effort in maximizing it assets capacity, which will drive the fixed asset turnover ratio up. In 2019, the direct competition of Amazon, Walmart, generated a total revenue of $514.4 billion and had a fixed asset turnover ratio of 4.4. in this category, Walmart has the lead, but Amazon could always top this competitor if it males the right decisions on how to improve the use of its fixed assets.