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        I decided to use Amazon as the company for discussion board. I’m going to discuss the risks specific to the company, which can include economic, business, operating, financial, asset, product, market, and technological. Let’s begin by defining each. Economic risk involves the analyst and “must determine how the subject company will be affected by changes in the economic environment within which it operates” (Hitchner, 2017, p. 222). Since Amazon is leading the market in the e-commerce business, it doesn’t have to be concerned with economic risk.  Hartung (2017) states, “Wal-Mart’s value has increased to $222 billion – up $6 billion, 2.8%. Meanwhile Amazon’s value has increased to $403 billion- up $71 billion, 21.4%. Over three years (starting 3/3/14) Wal-Mart’s per share value has declined from $74 to $71 (down 4%,) while Amazon’s has risen from $370 to $845 (up 128%.)”

        Amazon has no fears regarding business risks. The sales and growth of the company continues to expand as they reach more markets around the world. As far as financial risk is concerned, Amazon’s stakeholders can be assured that the company will reach its financial goals. However, there is concern that they may also lose funds with their Amazon prime subscriptions and advertising fees. Amazon has spent over 2.5 billion in advertising revenue (Levy, 2018). Other factors that could cost a decline in Prime subscriptions could include a recession, in which current subscribers may cancel, and Amazon could fail to attract new subscribers for its yearly price of $79.99. Market risks relate to how well “the company is geographically diversified. If the company operates within a local marketplace, changes in the local area can greatly affect it” (Hitchner, 2017, p. 222). Amazon is currently successful in several geographic markets which include North America, China, Japan, Germany, and the United Kingdom.

        Amazon has no one product as it is an e-commerce business. Even if one could not find what they were trying to purchase from Amazon directly, the site itself allows individuals to place items for sell. “The cost of litigation can cause the end of a successful business. Even if successful from the company’s standpoint, litigation can create such a financial burden on a business that it can no longer function as a going concern” (Hitchner, 2017, p.223). This relates to the legal risks of an organization. Like any other major company, Amazon is not without its shares of legal issues. And this coincides with technological risk. Because Amazon’s consumers must provide their financial information to make purchases, the company must rely on the most up to date technology to prevent attempts of fraud.

~For which of you, desiring to build a tower, does not first sit down and count the cost, whether he has enough to complete it? ~Luke 14:28.

References

Hartung, A. (2017, February 28). How the ‘Amazon Effect’ Will Change Your Life and Investments. Retrieved from Forbes: https://www.forbes.com/sites/adamhartung/2017/02/28/how-the-amazon-effect-will-change-your-life-and-investments/#6a7714b55e76

Hitchner, J. R. (2017). Financial Valuation: Applications and Models (4th ed.). Hoboken: John Wiley & Sons, Inc.

Levy, A. (2018, October 28). Amazon Advertising: How Much Room is There to Keep Growing? Retrieved from The Motley Fool: https://www.fool.com/investing/2016/10/31/the-3-biggest-risks-facing-amazoncom.aspx

The Holy Bible. English Standard Version.