Adam Smith once described competition in a market economy as “the invisible hand” that guides the economy. For economic growth to occur, competition must be present. It promotes productivity, innovation and quality. In the presence of competition, most companies focus on product differentiation, increasing market share, and product innovation. To remain competitive, businesses must be able to analyze the internal and external environment and develop business strategies based on their findings. By conducting external analysis, businesses can better understand the opportunities and threats within their industry. It is important to recognize that opportunities and threats are independent of the business. This external evaluation will be based on a competitive analysis which evaluates performance. Say no to plagiarism. Get a tailor-made essay on “Why Violent Video Games Should Not Be Banned”?Get the original essayCompetitive ProfileThis section will analyze the key success factors and market performance of Amazon Inc. compared to Walmart and eBay through Using a Competitive Profile Matrix (CPM). The purpose of the Competitive Profile Matrix (CPM) is to identify a company's strengths and weaknesses and then compare them to those of its competitors. By using the industry's critical success factors, a company can conduct an in-depth comparison of its key competitors. Based on the results, companies can determine which strategies need to be improved or which strategies need to be eliminated from their business plan. Amazon, Inc is a relatively young company but with an exceptional history. Founded in the early 90s by current CEO Jeff Bezos, the company managed to become the first of its kind. When we discuss the success of a company, we need to analyze its business model and thoroughly study its business strategy for sustainability and growth. One of the strengths of Amazon, Inc. is its product diversity, customer loyalty, brand awareness, and financial position. Based on the weighted score against Walmart and eBay, Amazon outperforms them. Amazon's weighted score was 3.45, Walmart's was 2.91, and eBay's was 2.93. However, Walmart can be considered Amazon's main competitor, in part due to its recent entry into the e-commerce sector. Innovations such as online grocery shopping and website design have helped Walmart's profits exceed what Wall Street initially predicted; $122. 69 billion against 120 dollars. 51 billion. On the other hand, eBay's revenues met expectations according to Yahoo! Finance. Analysts had forecast a profit of $2. 31 billion, the company then posted 2 dollars. 33 billion in revenue at the end of the financial year. Competition with giants like Amazon and other companies joining the e-commerce bandwagon has forced eBay to resort to new strategies. According to CEO Devin Wening, they have "made significant progress to modernize eBay and drive growth by improving the customer experience, creating a product catalog that covers more than half of our inventory, and strengthening the eBay brand." The CPM above shows that Amazon dominates the market within these same Walmart and eBay sectors. In terms of revenue, in 2016, Amazon's net sales were $136 billion; $94. 7 billion comes from products and the rest from services. An EFE matrix analyzes opportunities and threats much like a SWOT analysis. The goal is to have an idea.