Consequently, U.S. President Donald Trump has suggested imposing a 45% tariff on imports originating from China (Mody). This increase in tariff cost poses a threat to Amazon’s merchandise imports as the firm will have to pay additional tariffs in order to work with Chinese sellers. Additionally, the tariff increase will affect any prospective sales if Amazon were to acquire Lululemon; as 23% of Lululemon clothing is manufactured in China (Soni), the company would also have to pay the additional tariff fees. This change in business economics between the U.S. and China could be considered a setback and a potential company threat for both Amazon and Lululemon if the law were to be passed. In order to be successful long-term, Amazon needs to ensure they are able to continue effectively doing business with Chinese sellers. Investing in a company that manufactures its products in China and other Asian countries could prove to a problem in the …show more content…
Although Amazon’s profits are currently stable, company shareholders worry that its selection has become too diversified and the company is growing too rapidly to maintain its success (Page). Currently, Amazon is in direct competition with the majority of retail sector chains such as books, TV shows, clothing, food and more. At first glance this may seem like an advantage, however this continuous growth can result in a lack of focus and strategy; although expansion is necessary for a company to remain successful, blind expansion into numerous sectors can cause Amazon to lose control of its production and ultimately lose control of its clientele. Recently, Amazon has expressed interest in acquiring Lululemon, a Canadian athletic apparel retailer (Lululemon). With little to no previous experience with yoga-inspired athletic wear, Amazon would need to familiarize itself with a new market, a task that can prove to be difficult as the company has many other markets to focus on. “Not only do companies that expand quickly have personnel problems but they are also less able to adapt to a changing market” (Page). Amazon’s success with Lululemon heavily depends on how effectively the company can adapt to the needs of the new market; this includes updating warehouse business environments, hiring additional personnel and the expansion of new