Research Articles Base: Jeff Bazos

Swot Analysis of Amazon.com

Abstract The internet and websites are now becoming methods of exchange between business and clients. It is easier to use and can have lesser problems. One website that gives benefit to people is the amazon.com. This website offers the people with so many things that are hard to find at prices that can be lowered. The website since it is found on the net can easily be found by people and they can deal with transactions there. This paper intends to give an introduction for the paper wherein a rationale for the paper will be given, through the introduction of the terms and reference can be made wherein key module concepts can be introduced, Background of case organization and/or practical example and an outline of intended structure of the assignment can be given. This paper will also critically review the Amazon.com case study through application of relevant concepts and analytical techniques associated with the organization’s global business policies and strategies. Moreover, the paper will carefully analyze and evaluate Amazon.com’s strategic decision-making and problem-solving processes in the context of how organizations respond to changes in the business environment. The paper will also reflect on the future strategic direction of Amazon.com post 2004 by highlighting the strategic thinking behind adapting a long-term approach to developing an e-commerce business model that incorporated substantial global expansion. Through such information, conclusions and recommendations shall be made. Introduction In the short space of 25 years something which started as a US defense initiative has developed into the main communications mechanism for the academic and research community and most recently has expanded into a major business tool for the commercial sector. The Internet, as we have now come to call it, has evolved during this period from being a robust and an effective way of exchanging information in providing a delivery mechanism for massive amounts of multimedia information to a global audience. Virtually, all of the services and products related to the Internet were originally defined to satisfy demands emanating from the academic and research world. We are only just entering into the era where the main driving force for new developments is coming from the commercial sector.  The original users of the Internet were drawn from a narrow segment of the populace. They have recently been joined by the new generation of users with a wider range of backgrounds than academia and research. The club-like nature of the Internet is fast disappearing as the ease and cost of access makes it accessible to a much greater audience (Stroud 1998). The two Internet applications that are most likely, in the short term, to have an impact on the non-IT manager are e-mail and the World Wide Web (www). E-mail provides a very simple and effective way of sending both simple text messages and computer files to one or a number of recipients. The www enables individuals and organizations to provide a global audience with a gamut of multimedia information that can be accessed easily. The benefits of all of these Internet services are available at local telecommunications charge rates. The basic design criterion for the Internet- that it should provide a resilient network which is capable of operating without a central control and administration in the case of a nuclear attack, is now causing difficulties for those authorities seeking to administer its operations and in particular the content that it carries. The Internet’s potential to change the way we conduct business is only just beginning to be understood. Already it is clear that managers must orientate their thinking to adapt to the opportunities and threats that are being created (Stroud 1998). The paper will be divided in a way that for every question its related answers will be given. Background of Amazon.com Amazon.com Inc. is an online retailer of books, music, videos, toys, electronics, and other products. In addition to selling products over the World Wide Web, Amazon.com administers online auctions for items ranging from postcards to personal property. The company also provides its customers with services, including an Internet-based address book and personal calendar, and a comparison-shopping tool. Amazon.com is based in Seattle, Washington. Amazon.com is recognized as a model in electronic commerce. The company pioneered many of the tools and procedures now commonplace in online retailing. These include order verification and customer service via electronic mail (e-mail), one-click shopping, and customer reviews. Amazon.com was also one of the first companies to sacrifice profitability, opting instead to devote its growing revenues to expanding the company’s offerings and presence on the Internet. This strategy was subsequently adapted by Internet start-ups, or dot.coms, in record numbers (Brynjolfsson & Urban 2001). Company founder Jeff Bezos grew interested in online retailing in 1994 while working as a business analyst in New York City. After researching the success of different mail-order companies, Bezos decided that books were the perfect product to sell via the Internet. That year, he left New York to establish his new company in Seattle, chosen for its proximity to major book wholesalers and the booming high-tech industry. In July 1995, Amazon.com launched its Web site, an online catalog of books presented in a user-friendly, graphical format. During its first month in operation, without any media publicity, Amazon.com sold books to customers in every U.S. state and more than 40 other countries. Two months later, the company’s sales exceeded ,000 a week. Amazon.com went public wherein it made its stock shares available for public purchase in 1997 (Brynjolfsson & Urban 2001). In 1998, Amazon.com added music and videos to its online offerings. The same year, the company acquired British online bookseller Book pages and German online book retailer Telebook. The company also purchased the Internet Movie Database, one of the most comprehensive movie databases on the Internet, and added it to the company’s expanded list of online offerings. In 1999, the company expanded its product selection to include video games, software, home improvement products, and gifts. Also in 1999, Amazon.com acquired stakes in online drug and sundries retailer drugstore.com, pet supplier Pets.com, Internet grocery HomeGrocer.com, recreational and equipment provider Gear.com, and a number of other Web-based specialty retailers and service providers. Amazon.com launched its online auction service and teamed with esteemed auction house Sotheby’s to auction antiques, fine arts, and other premium collectibles (Brynjolfsson & Urban 2001). First Question To analyze the Amazon.com case study through application of relevant concepts and analytical techniques associated with the organization’s global business policies and strategies, SWOT analysis will be used. SWOT analysis gives the company information on the strength and weakness it has that matches it with the competitive environment it engages in. It also helps a company create strategic plans/moves that can counter any problem or threat from competitors and assists in maximizing the opportunities they have. SWOT analysis tends to help companies determine what aspects they excel in and what aspects they have problems in. It also helps companies determine its status against rivals. Strengths Strengths are the strong points of the business. To know the strengths of the things that should be known, one must look at  the sources of the company’s revenue, the market share of the company in various product lines, the availability of strong brands of a company, the effectiveness of the advertisement of the brand or product, the availability of pool of skilled workers, the morale of the employees,   the innovativeness of the company and the ability of the company to withstood international competition. The strength of the company is in its continuous and fast growth as the years pass. This gives them a distinct advantage towards their competitors. This also gives the company a distinct identity separate from its competitors. The continuous and fast growth of the company shows how well they are operating and how effective their strategy. Another strength of the company is the extended promotional relationships with established internet players. The company has been working with internet players so that they can make use of each other’s resources to achieve their goals. Through the company’s association with such internet organizations their knowledge and experience in doing business in the internet may increase, thus, they can improve the services they give to the clients. Moreover, strength of the company is the powerful search facility wherein there is a personal notification service to email the clients, a recommendation section, an awards section containing award winning books, and an associate program with other sites. Through the stated facility, the company gives the client convenience and ease in finding the book they want. It also helps in giving the client some ideas on what to buy. Strength of the company is when having a vast and wide collection of books and products that it can give to the clients.  Through this, the company can provide different choices for the clients. The client doesn’t have to go to other sites to find the products they need. This increase the profitability and status of the company. Lastly a strength of the company is the popularity it has. The company is one of the known websites that offer such services. When people look for books or other products, they remember the site as one of the most reliable and trusted. Weaknesses Weaknesses are the current problems of the company. To determine the weaknesses of the company, the things that should be given prior notice includes the products that are least profitable, areas of the company that is not able to recover cost, the weak brands, the ability of the company to raise money when it needs to, the ability of the company to stand price pressures against competitors, the ability of the company to create new ideas, the faith of employees in management and the ability to compete with other companies in the technology front. The weaknesses of Amazon.com includes: not having an attractable website. Having an attractable website makes client view the website and purchase the product they need. It increases the clients of the company and makes the client suggest it to people they know; It is not able to engage in other business endeavor other than the website. The company has not tried to engage in business ventures other than the website. The company might have other opportunities if they tried the other ventures; lastly, its inability to reach the sectors of society that does not have internet access. The company can further increase its profitability and revenue if it can reach sectors not having access to the internet or websites. Opportunities Opportunities are those events or situations that may arise in the future. To determine the opportunities of the company, the things that should be known includes competitive position of the company, new technologies that the company can innovate for low costs, the capacity and opportunity to extend brands, the capacity to implement incentive plans to boost employee’s effectiveness, the ability of the company to move up the value chain, the ability of employees to be multi-skilled to reduce levels of redundancy, opportunities to cooperate with companies that are not competitors for both companies to be beneficial. Amazon.com’s opportunity is its website. The website of the company can still be improved and given a new look and be made more attractive and informative. The website of the company can be made more up to date and convenient to use for the client. Another opportunity for the company is its wide range of products. They can use such products to satisfy the needs of the clients and offer these clients everything that they needed. This can also be used to increase the status of the company against its competitors. Lastly an opportunity for the company is the internet constantly being improved to suit the lifestyle of the people. Through the constant innovations made regarding the internet, the company can increase the clients they have at the same time their profits will also increase. Threats Threats are problems that may arise and should be avoided. To determine the threats of the company, the things that should be known includes the capacity of employees to be adequately trained, the capacity of the company to withstand sudden changes in the environment, the ability of the brands to withstand price competition, the financial being on the verge of liquidity, if the company considered a good employer, and the ability of the company to cope up with technological changes. A threat to the company is its competitors. The competitors they have might find a way to equal or exceed the performance of the company in the future. This could cause them problems or major hindrances to achieve their goals. Another threat to the company includes the laws in the country they are operating in. Laws are vital part of a country. These laws are the ones that initiate order and discipline in the country. There may be laws that can cause some delay in selling the products. These laws can hamper business transactions to be completed. These laws are enacted to protect the welfare of local sellers in a specific country.  Since there are different laws in different countries, it can also cause problems for the company. Laws in Taiwan are different from the laws in Switzerland; therefore the laws in one country may cause problems for the company while in another country it may not be a problem.  Lastly, a threat to the company is the tariffs and taxes that the company has in different countries, each countries has its own rate of taxes and tariff. Taxes and tariffs are collected by the countries government as additional funds for their projects in that country. The taxes and tariffs collected by a country depend on what the law of the country states. The taxes and tariffs collected by a country is a threat because this causes expenditures to a company. Since its rate varies, the company must be wary of the cost of the taxes and tariffs and be able to decide if having a business in that particular country is reasonable and feasible for them.    Second Question Strategic management is becoming recognized as the administration of operations dominated by purpose and by consideration of future opportunity, with explicit attention given to the need to clarify or change strategy as results suggest and to enter the future on a predetermined course (Gilbert Jr. 1992).The chief executive of a company has his or her highest function in the management with  a continuous process of strategic decision in which a succession of corporate objectives of ever-increasing appropriateness provides the means of economic contribution, the necessary commensurate return, and the opportunity for men and women of the organization to live and develop through productive and rewarding careers. Strategic decision making may be viewed as a series of means-ends decisions beginning with the determination of long-term global objectives  and the development of shorter term, more local actions to obtain these objectives  They locate this concern with purpose in the context of an amalgamation of external relationships (Gilbert Jr. 1992).  The company ensures that every decision it made will be for the best of the company. It makes sure that every action done will be good for the long term of the company. There was a year when the company experienced so many problems and difficulties, through making the right decisions and engaging in problem solving the company was able to overcome such adversity. Problem solving starts off from an initial given situation or statement of a problem. Based on the problem, as  prior knowledge, you have to work towards a solution. When you reach it, you are in the goal state of the problem. On the way from the initial state to the goal state you pass through, a number of intermediate problem states. In some cases you don’t know what the answer is in advance and you have to find it. How you find the answer might not be particularly relevant. In other problems it is precisely how you get the answer which is important. The point of doing exercise problems in textbooks is to learn how to solve problems of a particular type. If the answer was all you were interested in, you could look that up at the back of the book (Robertson 2001).   Finally, you can have problems where you have only a vague idea what the answer is and an even vaguer idea of how to get there. Writing a 4000-word experimental report as an assignment is an example. The only thing you can be really sure of is whether you have written 4000 words or not. Another example might be finding a compromise solution in an industrial dispute-you are very unlikely to know in advance what the compromise position is going to be, or how you are going to find it (Robertson 2001).  In problem solving, the most important thing considered is the projected results. Amazon.com makes sure that in problem solving their main goal is to bring a better future for the company. They make sure that they solve the problem and not worsen it. Third Question To meet the future threats the company might face and grab the opportunity it has. The company must use strategic moves. One strategic move is to continuously improve the products they offer. This might be a strategic move of the company because the company wants to be the best in its industry and by doing it they can achieve this goal. To make sure that competition will not gain advantage over them, the company will continuously improve the products they are offering so that more consumers will be encouraged to buy from them. The complaints of the client about certain products should be compiled and bonded together. Each complains should be read and noted. Complains that are similar should be grouped together. The proper action regarding complains should put into action unto the product so that the best product may come out.  Another strategic move of the company is to improve their website. This might be a strategic move by the company because they need to keep up with changes in society. They also need to make sure that the method they use to sell and promote products will be the one known by the customer.  Redesigning the website to a better look can boost the company’s sale. Making it user friendly and attractable to consumers can invite more clients to view the website and see the products the company offers. A strategic move of the company is to create more mergers with non competitors. This might be a strategic move for the company because it might boost the company’s status and the company can make use of the capacity of non competitors for its benefits. Through the stated move both companies will acquire benefits and both can promote the products they have through each others advertisement media. Lastly, a strategic move by Amazon.com is improving the capabilities of their employees and strengthening the services rendered by the employees. This might be a strategic move by the company because improvement of the employees means better service; better service means more clients, and more clients’ means reaching their goal and objectives.  The company should give their employees additional knowledge through allowing them to attend seminars and the like. Through this the company can improve their status in the industry. Conclusion The SWOT analysis of the company showed how successful the company is. The SWOT analysis of the company helped in showing how effective the company’s strategy is. It showed the areas that the company is doing well. The SWOT analysis also showed some weak spots of the company and why it is considered as  a weak part. Moreover, the SWOT analysis showed what things the company has that they may use to continue the success they has. Finally, the SWOT analysis showed what problems the company might face in the future and why are they such a problem. In the second question the focus was on how the company implemented the strategic decision making. Making a good decision is vital for the company. Any wrong decisions made can give the company problems in the future. In the third question the focus is on the future activities of the company. The future activities and action that are perceived to be done by the company gives a better position against competitors and a brighter future. If the perceived actions are done well, the company can increase the status it has and be the best in the industry. Recommendation Amazon.com is currently one of the best in its industry. The company can maintain such status by improving the website it has. By making the website more user-friendly and attractive, more clients will be encouraged to use the site and avail their products. The website is the main way for the company to transact business with clients. That is why they must make sure that the website gives the client ease and not  problems. The company can also engage in other business endeavors to widen the scope and territorial boundaries of clients. The company can invest in other methods of transacting business like putting up stores and other personal selling methods to reach clients that are not able to make use of the internet or they do not capable of using the internet. This will help the company gain competitive advantage against rivals. References Bennett, R 1999, International business, 2nd edn, Financial Times Pitman Publishing. Brynjolfsson, E & Urban, GL (eds.) 2001, Strategies for E- business success, Jossey-Bass, San Francisco. Cummings, S & Wilson, D 2003, Images of strategy, Blackwell Publishing. Ferguson, PR & Ferguson, GJ 2000, Organizations – A strategic perspective, Macmillan Press Ltd. Gilbert Jr., DR 1992, The twilight of corporate strategy: a comparative ethical critique, Oxford University Press, New York. Lasserre P 2003, Global strategic management, Palgrave McMillan. Robertson, SI 2001, Problem solving, Psychology Press,  Philadelphia. Stroud, D 1998, Internet strategies: a corporate guide to exploiting the internet, Macmillan, Basingstoke, England. Credit:ivythesis.typepad.com

Swot Analysis of Amazon.com

Abstract The internet and websites are now becoming methods of exchange between business and clients. It is easier to use and can have lesse...

Amazon Case Analysis

Introduction             Amazon has the first mover advantage in online bookselling industry.  In the onset of 2004, it is named to be number one in on-line service, has six website servers, 32 million customers in 150 countries, 900,000 associate programmes linking up or having contents of Amazon.  However, it can influence the general and industry environment (a possible strength/ weakness creation) or be influenced in return (a possible opportunity/ threat eruption).  Its objective then should not be strictly based on competitive action and responses implementing its mainstream strategic plot of expansion through customer innovation. This paper presents PEST and Five Forces Analysis, internal resource audit, value chain analysis and core competency identification of Amazon.  It will show why the firm needs to modify and adapt its strategic outlook relative to its environment and internal resource and capabilities.            PEST Analysis Although internet security and systems have improved, the wide inequality of technology distribution in the global arena undermines the endeavors of technology- and innovation-based firms like Amazon.  Apparently, sales of these companies will be limited to the top 20 countries that posted an average of at least 50% of internet penetration against the bottom 200 of less than 5%.  The more-or-less 90% of global population without internet access is aggravated by the top 20’s similar condition although prospects for the latter of becoming potential on-line customers are definitely higher than the bottom 200.              Further, building the technological environment for the bottom 200 could be a relatively easier national concern than building the necessary human capital to facilitate and use such infrastructure.  This fact goes beyond the budget limitation of institutional segments (government, businesspeople, and academic foundations) and requires subsequent, if not preceding, popular culture approval.  The less tolerant cultures like that of Chinese to Western aspirations is an example of e-commerce challenge belittling the power of technology against the rule of cultural supremacy that is conservative of modernism uncertainty that could attack political and cultural beliefs of local population.                       Finally, the importance of technological education for both customers and businesses is an indispensable platform required to augment internet penetration and socio-political resolutions.  Amazon’s case charges against email forgeries in 2001 and 2002 implied the adversary effects of e-commerce to consumers and legal services providers alike including the government’s capacity to earn.  With incentive to learn the technology skewed to profit-based opportunists, legitimate benefits attributable to core stakeholders will only be sub-optimal and could ultimately pilot to discourage customer reliance on online shopping leading to unnecessary costs accruing to technology providers (litigation, advertisements) and government (monitoring).                       In the less internet penetrated countries, foreign direct investments not simply portfolio capital is needed to stimulate the demand for e-commerce at a significant level.  This move would be limited to open countries while close countries could be approached through amplified political relationships, possibly trade pacts.  At the end, strong governmental lobbying favoring the technology-based industry or pre-determined national priority to modernizing key institutions are supporting conditions to initially deploy rational market segmentation to underdeveloped and developing nations.  Seeing technology diffusion initiated by political hierarchies is more dependable pre-condition than relying on the citizen-driven model of demand because it has the ability to relax religious and cultural ideologies at the face of developmental and economic issues towards a sustainable national dominance theory.   Five Forces Analysis             This analysis is more direct to the firm than PEST factors since the intensity of industry competition and profit potential is a relative direct factor of industry analysis observed in five forces; namely, threat of new entrants, bargaining power of suppliers, bargaining power of buyers, threat of substitute products, and intensity of rivalry among competitors.               Threat of entry is considered medium to low.  Being the first mover in online bookstore industry, Amazon would be the best example of what amateur firms would be faced.  The factor that separates Amazon from the inexperienced firms is its 8-year capital intensive and continuous upgrade of services through acquisitions and alliances, nurturing the commission-based associate websites, and endless technology development and innovation.  Imitating such would also require relationship building which is difficult when relationship is already established by the first mover, or in the case of untapped technology partners, requires significant capital and strategic plan proposals to move the other party.  In both cases, known industry players would be the benchmark requiring the deal a considerable amount of time and money impractical for the new player.                 However, switching costs is moderate for customers giving a breathing space for niche players like eBay to exploit auctioning markets or Wal-Mart to merely use their website to highlight real shopping experience at affordable prices.  This fact bestows Amazon untapped and low-valued niche market available to small players accompanied with sub-optimal but effective (that is, operating under positive results) earnings from the industry entire e-commerce market.  Also, expected retaliation from these niche competitors is likely to happen when the diversified Amazon poised threat of the former treasured small market share.  The diversity of products and markets in the industry give niche players an enforceable claim over the moderately to un-served market base over diversified industry players like Amazon.               Supplier’s power, buyer’s power and threat of substitutes are low.  Since retail industry has a minute 1.5% online sales, industry firms have an upper hand over retailers offering the former technology and internet presence to the latter untapped global exposure.  This made e-commerce firms significant customers to suppliers particularly the ones who have global marketable products/ services.  Except for B2B transactions (like Target commissioning Amazon’s technology), customers both merchants and pure buyers using industry technology are independent and geographically segregated from each other that makes their individual purchase insignificant to firms while their web-based purchase decisions are supported by firms’ convenient and general-to-rare product shopping at discounted prices and delivery options.  These made their switching costs expensive while oftentimes diminished their ability to purchase the needed item at times when decisions are delayed.  As a result, threat of substitutes become a sub-optimal, if not, infeasible alternative.                           Lastly, competitive rivalry is medium to high.  There are numerous industry players; however, they can be considered niche (eBay) and overly diversified (Yahoo!) competitors of a diversified industry firm like Amazon.  As a result, a head-to-head competition exists against Barneys (who is backed by retail stores) and Price line (who has the highest employee per revenue contribution in the industry) created strategic group together with Amazon.  Adding the flame of intensified rivalry is the high fixed and storage costs of the industry since firms needed to stock inventory in their warehouses for ready delivery of an order.  Competitors also have little product differentiation, except for auctioned product maybe and other exclusive rights of players to sell supplier’s products, making customer switching costs low.               Entry to the industry will continue to lure small players to target a certain niche although large entrants would likely resort to unsolicited take-over of existing diversified firms like Amazon or slowly identifying and creating partnerships with web-based giant firms like Yahoo! or Google to realize industry position.  The supply chain actors and substitute products are derailed by the power and convenience of online shopping making the associated costs of outside the industry transactions crucial to their profit and satisfaction levels.  This vital border line between efficient and non-efficient transactions builds industry diversified players with numerous niche competitors competent of acquiring a huge pie in their profits because of their customized service in addition to intense rivalry in mainstream diversified industry wherein both long- and short-term strategies are considered equally value-creating activities.    Internal Resource Audit             Amazon has high ability to generate internal funds as showed by its cash equivalent of 3M in 2001 to 2M in 2002 most possibly from cost cutting activities that includes downsizing and inefficient distribution/ warehouse closures.  However, it also has also invested to partnerships in Dell and other auction houses that could result to gains for the company although its borrowing capacity through public offering seems sub-optimal primarily because of the uncertainty of technological advancements that makes shareholders key financer of Amazon’s innovation and acquisition endeavors.  In relation to financial resources, patents and stock of technology not only gives the firm 20% share of web development from total revenues (additional internal fund generation) but also competitive advantage of one-click technology from Apple to back-up its browsing and searching convenience promise to customers.               The best thing about innovation culture in the firm is that the founder CEO Jeff Bezos maintains and flames it.  Thus, the process of keeping the learning- curve even at rough times and stock price falls created a reputation of customer-focused innovation to increase convenience protected in its 8-year existence, rooted in its 1995 infancy and stored in the heart of the CEO since his 14th birthday.  The innovation culture is enhanced by recruiting top executives who have thorough experience and knowledge in areas of supply chain management, logistics and international relations to support geographic expansion of markets in Canada, Japan and France wherein 2003 figures showed 37% share on revenues of countries outside North America.   Value Chain Analysis             Primary activities such as inbound logistics is thoroughly supported by secondary activities such as selective procurement and technological development that can filter the choice of product/ service from retailers/ manufacturers for customers to have safe transactions.  In addition, its firm infrastructure allows its operations and marketing to be compressed in one commission-based scheme provided to its 900,000 and growing associate partners.  Further, its infrastructure also allows its Seattle headquarters to minimize tax payments not to mention the strategic outbound logistics of the Delaware center that enabled the inventories closer to East country markets like Japan and other European countries.  As a result, the value chain combines the relatively low-cost and supportive environment of Seattle headquarters that houses technology developers while creating efficient procurement, storing and delivery products through closing of inefficient warehouses and opening strategic and value-adding ones.     Resource and Competencies             Unique to Amazon is its patent-protected software technology.  This resource would surpass industry standards with benefit of securing the right to exclusively use and sell the developed innovation.  Other close-rival firms may have strategic and innovative-like leaders such as Bezos or executives with experience and knowledge of the industry but the value-adding capability that it can offer to customers would be amputated, if not, eradicated for use due to legal constraints.  In a similar manner, large firms wanting to enter the industry would have large capital base and shareholder or public financing capable of pirating Amazon key employees or buying close competitors.  However, without buying the whole company such seemingly unethical would not injure the competitive advantage of Amazon much because patents do not accrue to individual employees rather the company.  As a result, stagnation (diminishing firm’s value) or over-complexity of technology (higher costs) would be the long-term position of imitating rivals.             The most prominent core competency of the firm would be its strategic plot of expansion though customer innovation.  It has the costly-to-imitate financial and technological resource, valuable firm infrastructure, rare strategic leader and top management composition and non-substitutable software technology.  These resource and capability combinations that possess the four criteria (although may have two or more realized criteria) suggest that sustained competitive advantage is present to the firm’s patented innovation.      Conclusion             Opportunities lies in the further modernization of retail sector and realization of global markets particularly those in top 20 of the efficiency, convenience and diversity of e-commerce.  Threats are identifiable in bottom 200’s cultural and political boldness that would take decades of ideology cycle, perhaps, long-term negative economic recession due to failure of market actors to use and exploit available resources efficiently.  Strengths of patented software innovations would give the firm sustained competitive advantage that can leverage long-run internet penetration of untapped global markets.  However, weakness on niche competition would ultimately carry with it more valuable competencies due to focus strategies that would possibly be applied to win a share in certain markets.                                Due to these findings, Amazon should be selective in expanding its product line through expensive acquisitions.  A more fitting strategy would be expanding its market base to include developing countries that have bright prospects in embracing information technology at the fore, and subsequently, e-commerce.  It could advance initial development feats to these countries by establishing test areas and hands-on experience to prove the advantages of e-commerce.  The host government should be closely coordinated to achieve positive, supportive and multiplier results.  In effect, the core competency of its strategic plot would be modified to expansion through customer innovation and adaptation.   Credit:ivythesis.typepad.com

Amazon Case Analysis

Introduction Amazon has the first mover advantage in online bookselling industry. In the onset of 2004, it is named to...

Business Strategy of Amazon

Introduction             With the advent of the information technology, specifically the internet, it is said that more and more companies are existing in the online world. The changes in the business market also allows customers to change and become more dependent on online stores and online shopping than go and find something in shopping malls or retail store. One of the existing and considered as the largest and competitive online shopping in the world is Amazon. In this report, the goal is to analyse Amazon based on the case study provided. The analysis includes the discussion of Amazon’s s strategic intent, main resources and capabilities. In addition, this will also include analysis of the resources and capabilities that give sustainable competitive advantage and the recommended future strategy for the company.   Overview of Amazon             Amazon has been considered as one of the largest bookstore and online store in the global market. The company has been able to thousands of customers in over 150 nations. Amazon’s main website offers millions of DVDs, music, books and videos not to mention their products from household, electronics, apparel and clothes, cosmetics, drugs and others.  Thought the company has highs and lows, they are able to manage the companies and sustain their competitive advantage.   The company has also used some strategies to ensure that they will outgrow their competitors like Ebay.               Accordingly, Amazon is a company that truly popularized the context of online shopping by having the largest product supply online. In addition, it is one of the first industries to sell products deep into the long tail by having them all in their numerous warehouse as well as distributing products through their partner companies.             The founder of the company, which is Jeff Bezos, started the company without the assurance of being profitable. Unlike any other websites, Amazon grew in a slow manner and had their first quarterly profit at the end of the year 2002. From the on the company has been able to sustain the competitiveness in the online market.   Amazon Strategic Intent             Based on the given case, the strategic intent of Amazon is to become the number one choice of the online shopping for their shopping needs. Their website has been made to provide more convenience for customers who wish to buy certain items right away rather than wait for the delivery (See Figure 1). Amazon can now direct their customers to local stores that presently have the product in inventory. Consumers need not call all the local stores and tolerate taped messages and long waits to find a product. Even such Internet pure-play firm as Amazon, through its partnership with Borders, for which it provides website operations, can direct customers to the nearest Borders store offering the desired product. Customers need only provide a zip code. Integration of physical stores and online operations can also lead to greater efficiencies.  The strategy of the company uses the Internet and took advantage of its capability to reach more clients (Baldwin et al, 2002).     Figure 1 Repeat Customers as a Percentage of Order 1996 to 1999 Furthermore, Amazon strategic intent is to provide more options for their clients by partnering with other international and local suppliers. The company also diversified their offerings to different products, services, categories and other physical assets. Furthermore, based on the given case, the company’s strategic intent is to sustain their competitive advantage by compelling what the needs and demands of their target market and expanding their business portfolio in the global market.  The company’s strategic intent is to do their business in a slow but sure manner by becoming innovative in what they are offering for the customers.             Another strategic intent of Amazon based in case is its goal to be recognised and respected as a global bookstore and online shopping brand and to dominate the global market through their high quality product and service offerings. As discussed in the case study, the advertising and marketing strategy of Amazon have been focusing on how the products would gain interest from their target market and how they can be able to generate sales with their products.  This is Amazon’s stronghold where it continues to yield strong sales revenue by leveraging off its excellent online shop in different locations, such as in UK and other country, strong brand name and excellent reputation among customers.   Amazon has also been continuing to create affiliate websites to expand their business market among various consumers.   Amazon’s mains resources and capabilities The presence of strong as well as effective leadership in today’s organization imposes a great responsibility to the organization’s team and management networks as leadership implies the overall capacity of the organization’s performance like for instance, in terms of operations and research development.  It can be said that Amazon’s resources and capabilities can be divided in the management of the company specifically their leader which is Bezos, the ability of the management to effectively use strategic supply chain management and aligning it with their business process and information technology, their competitive advantage in the online market, and the financial resources that it gains through its successful approaches. Accordingly, the leader of the company has been able to use appropriate leadership style to solve the issue of the company in dealing with their online clients and consumers.  In addition, it can be said that the transformational leadership approach of their leader as a transformational leader has been able to lead the company. T can be said that successful business organizations need vital leadership as the latter serves as a successful vehicle for the organization’s stability and growth within the global market. Based on the given case, Amazon has been able to use four views of leadership which include the transformation view, power, paradigm shift as well as social responsibility view (Proctor, 2000). However, the CEO of the company has focused on the area of transformation to meet the changing needs of the global market.  Being a transformation leader that he is, the CEO of Amazon (Bezos) has been able to show a visionary value. The management of Amazon has been able to enhance not only the manager’s way of handling and managing their subordinates but most especially the fact that it enhances both the performance of the employee and the organisation as well which is very obvious in Amazon. According to Kim and Weaver (2000), the administration and management of a particular business organization entails full utilization of the resources of the company in order to lead, direct, and control operations to meet the set objectives.  Based on the given case study, it can be said that Amazon has been able to use strategic approach to sustain their competitive advantage. One of the capabilities Amazon is how the leaders of the company do their business.  Guided by their vision and mission, the leader and management of the industry clearly illustrate integrity in all their actions.  The management has also strong commitment in promoting the company values. In addition, the management of the company has been able to understand the priorities of the business and make every decision in line with the strategic direction by giving consideration to the effect on all aspects of the business and on other stakeholders.  Another sustainable capability of the company is its continuous focus on the importance of both internal and external customers to ensure that these customers remain loyal to them.  Furthermore, the company’s ability to identify and recognise contributors is another factor that sustains the company’s competitive advantages. The ability of the management to diversify and differentiate their business strategy to dominate the global market can also be considered as the major capabilities of the Amazon.   Resources and capabilities that provide sustainable competitive advantage             In accordance with the case study to the business approach and strategies of Amazon it can be said that the company has been able to continue to grow and expand their business in the online market. It can be said that Amazon has been able to use various strategies which enable them to sustain their competitive position in the global market.  Based on the conducted reviewed in the previous section, it can be said that Amazon strategy includes differentiation approach and innovative approach. In doing so, the company has been able to have a sustainable focus on their core business values ensuring that their goals, objectives and mission are achieved.  In addition, the company has been able to sustain good relationship with its target market and all other stakeholders and the company focus itself on satisfying the costumers by providing them quality products and services in the online. The ability of the management to manage their financial resources and limit their expenses to sustain their needs for expansion has also been considered as one of the capabilities that sustain their competitive advantage. The strategies used by the Amazon include Intensive strategy, which aims to competently position and promote their products and services in the online market. The industry has also utilized the Integration strategy and forward integration in order to promote and closely manipulate where all the Amazon products and services are being sold. To improve financial performance, the company sees to it that they utilise all their resources in a manner that will be beneficial to enhance the performance of the company.              Based on the given case, it can be said that the two resources and capabilities of Amazon includes their flexibility and innovation strategy.  It can be said that the ability of the company to expand their business is through their ‘flexibility and innovation’ which enable Amazon to counter the risks of erosion and losing of their competitive advantage.  In order to cope with the various influences and effects of market environment changes, and to sustain their competitive advantage, the management of Amazon has been able to improve and expand its organisation so as to conduct business operations and activities on a global scale which include the expansion of Amazon through the online presence of the brand in different parts of the world and by making specific websites as well as considering merging and acquisitions (See Figure 2). Herein, the management of the company has been able to improve their organization structure its organisational structure to achieve their organisational objectives.  In addition, the improved organisational structure is done in order to initiate speedy and flexible measures in managing their internationally diverse employees. Figure 2 .Aside from this, the management of Amazon has also been able to focus on their research and development department and to initiate innovative strategies designed to provide a competitive advantage and edge in the marketplace. As business gravitates towards a global scale, entrepreneurs find themselves faced with the challenge of producing new and better products at reduced cost and market price. Daft (2003) pointed out that in managing a global environment, managers of Amazon must be characterised by the ability to bring about change through innovation and creativity. Further according to Daft, a revolutionised manager sees change, rather than stability, as the nature of things (2003). Innovation as a ground for doing business in the 21st century will be the consistent tugging force that the organisation must either strive to adopt or suffer the consequences of being left behind by competitors. In addition diversification approach is also considered by Amazon to ensure having sustainable competitive advantage. Part of the diversification is to generate new coffee products that would meet the needs of the consumers in various parts of the world. As discussed, the knowledge of the underlying sources of competitive advantage highlights the abilities and core competencies of Amazon as a world leader in coffee retailing industries. In this regard, the company must be able to determine strategies and ways to ensure that their competitive position and advantage are being sustained in all levels of the organization. Indeed, making a business successful in a particular setting demands crucial and detailed studies and examination of the factors that will generate the best results that will serve the aims and objectives of the company. In this light, owners of big business organizations operating in a competitive business environment should be in constant look out with its competitors and the overall status and events in the industry. Taking advantage of the opportunities and intensifying the strengths while minimizing the risks and weaknesses of a business firm greatly helps in predicting the success in business enterprise Jayne and Dipboye (2004) indicated that in highly differentiated industries intense competition results to more diverse operation systems and processes because the participation among different sectors within and outside the company is needed to gain more economic advantage. Assets, skills, and capabilities available to a particular business organization are pooled together to come up with better business strategies.   Amazon’s Future Strategy It can be said that the Internet provides opportunities for the online companies to develop relationships with suppliers as well as customers. It has been found that the number of competitive moves increased as Internet usage increased for different companies in the world. It becomes more important to manage relationships as competition increases through the use of e-commerce. It can be stated that the most effective Internet strategy for that Amazon can use in the future is a collaborative one with their channel partners.  It can be argued that a mixture of multiple revenue streams that monetizes content/database, uses e-commerce, and cross-sells through multiple channels is the key to success of Amazon. In addition, another future strategy of the company is to use integrated marketing communication to reach more clients in the global market.   Reference 7.0 Reference Bradley, F. (1999). International Marketing Strategy. Hertfordshire: Prentice Hall Europe.   Daft, R. (2003). Management. 6th Ed. Cincinnati, Ohio: Thomson South-Western.   Edell, J. A., & Keller. K. L. (1993). Analysing media interactions: Print reinforcement of television advertising campaigns (Working Paper). Durham, NC: Fuqua School of Business, Duke University.     Hollensen, S. (1998). Global marketing: A Market-Responsive Approach. Hampshire: Prentice Hall. Lowson, R. 2002, Strategic Operations Management: The New Competitive Advantage. New York: Routledge. Papavassilou, N. & Vlasis, S. (1997). Standardization versus adaptation of international advertising strategies: Towards a framework. EJM, 31(7): 504-527.   Peteraf, M (1993). The Cornerstones of Competitive Advantage: The Resource-based View. Strategic Management Journal, 14(2), 37-46.     Porter, M 1998, Competitive Strategy: Techniques for Analysing Industries and Competitors. Free Press.   Proctor, T 2000, Strategic Marketing: An Introduction, Routledge, London.   Sloman, J. and Sutcliffe, M. (2003). Economics for Business, 2nd Ed. Harlow, England:       Pearson Education Limited.     Williams, J. R. (1992). How Sustainable Is Your Competitive Advantage? California Management Review, Spring, pp. 29-51.           Credit:ivythesis.typepad.com

Business Strategy of Amazon

Introduction With the advent of the information technology, specifically the internet, it is said that more and more c...

Sample Amazon.com Case Study

Business Strategy: Amazon   Introduction             With the advent of the information technology, specifically the internet, it is said that more and more companies are existing in the online world. The changes in the business market also allows customers to change and become more dependent on online stores and online shopping than go and find something in shopping malls or retail store. One of the existing and considered as the largest and competitive online shopping in the world is Amazon. In this report, the goal is to analyse Amazon based on the case study provided. The analysis includes the discussion of Amazon’s s strategic intent, main resources and capabilities. In addition, this will also include analysis of the resources and capabilities that give sustainable competitive advantage and the recommended future strategy for the company.   Overview of Amazon             Amazon has been considered as one of the largest bookstore and online store in the global market. The company has been able to thousands of customers in over 150 nations. Amazon’s main website offers millions of DVDs, music, books and videos not to mention their products from household, electronics, apparel and clothes, cosmetics, drugs and others.  Thought the company has highs and lows, they are able to manage the companies and sustain their competitive advantage.   The company has also used some strategies to ensure that they will outgrow their competitors like Ebay.               Accordingly, Amazon is a company that truly popularized the context of online shopping by having the largest product supply online. In addition, it is one of the first industries to sell products deep into the long tail by having them all in their numerous warehouse as well as distributing products through their partner companies.             The founder of the company, which is Jeff Bezos, started the company without the assurance of being profitable. Unlike any other websites, Amazon grew in a slow manner and had their first quarterly profit at the end of the year 2002. From the on the company has been able to sustain the competitiveness in the online market.   Amazon Strategic Intent             Based on the given case, the strategic intent of Amazon is to become the number one choice of the online shopping for their shopping needs. Their website has been made to provide more convenience for customers who wish to buy certain items right away rather than wait for the delivery (See Figure 1). Amazon can now direct their customers to local stores that presently have the product in inventory. Consumers need not call all the local stores and tolerate taped messages and long waits to find a product. Even such Internet pure-play firm as Amazon, through its partnership with Borders, for which it provides website operations, can direct customers to the nearest Borders store offering the desired product. Customers need only provide a zip code. Integration of physical stores and online operations can also lead to greater efficiencies.  The strategy of the company uses the Internet and took advantage of its capability to reach more clients (Baldwin et al, 2002).     Figure 1 Repeat Customers as a Percentage of Order 1996 to 1999 Furthermore, Amazon strategic intent is to provide more options for their clients by partnering with other international and local suppliers. The company also diversified their offerings to different products, services, categories and other physical assets. Furthermore, based on the given case, the company’s strategic intent is to sustain their competitive advantage by compelling what the needs and demands of their target market and expanding their business portfolio in the global market.  The company’s strategic intent is to do their business in a slow but sure manner by becoming innovative in what they are offering for the customers.             Another strategic intent of Amazon based in case is its goal to be recognised and respected as a global bookstore and online shopping brand and to dominate the global market through their high quality product and service offerings. As discussed in the case study, the advertising and marketing strategy of Amazon have been focusing on how the products would gain interest from their target market and how they can be able to generate sales with their products.  This is Amazon’s stronghold where it continues to yield strong sales revenue by leveraging off its excellent online shop in different locations, such as in UK and other country, strong brand name and excellent reputation among customers.   Amazon has also been continuing to create affiliate websites to expand their business market among various consumers.   Amazon’s mains resources and capabilities The presence of strong as well as effective leadership in today’s organization imposes a great responsibility to the organization’s team and management networks as leadership implies the overall capacity of the organization’s performance like for instance, in terms of operations and research development.  It can be said that Amazon’s resources and capabilities can be divided in the management of the company specifically their leader which is Bezos, the ability of the management to effectively use strategic supply chain management and aligning it with their business process and information technology, their competitive advantage in the online market, and the financial resources that it gains through its successful approaches. Accordingly, the leader of the company has been able to use appropriate leadership style to solve the issue of the company in dealing with their online clients and consumers.  In addition, it can be said that the transformational leadership approach of their leader as a transformational leader has been able to lead the company. T can be said that successful business organizations need vital leadership as the latter serves as a successful vehicle for the organization’s stability and growth within the global market. Based on the given case, Amazon has been able to use four views of leadership which include the transformation view, power, paradigm shift as well as social responsibility view (Proctor, 2000). However, the CEO of the company has focused on the area of transformation to meet the changing needs of the global market.  Being a transformation leader that he is, the CEO of Amazon (Bezos) has been able to show a visionary value. The management of Amazon has been able to enhance not only the manager’s way of handling and managing their subordinates but most especially the fact that it enhances both the performance of the employee and the organisation as well which is very obvious in Amazon. According to Kim and Weaver (2000), the administration and management of a particular business organization entails full utilization of the resources of the company in order to lead, direct, and control operations to meet the set objectives.  Based on the given case study, it can be said that Amazon has been able to use strategic approach to sustain their competitive advantage. One of the capabilities Amazon is how the leaders of the company do their business.  Guided by their vision and mission, the leader and management of the industry clearly illustrate integrity in all their actions.  The management has also strong commitment in promoting the company values. In addition, the management of the company has been able to understand the priorities of the business and make every decision in line with the strategic direction by giving consideration to the effect on all aspects of the business and on other stakeholders.  Another sustainable capability of the company is its continuous focus on the importance of both internal and external customers to ensure that these customers remain loyal to them.  Furthermore, the company’s ability to identify and recognise contributors is another factor that sustains the company’s competitive advantages. The ability of the management to diversify and differentiate their business strategy to dominate the global market can also be considered as the major capabilities of the Amazon.   Resources and capabilities that provide sustainable competitive advantage             In accordance with the case study to the business approach and strategies of Amazon it can be said that the company has been able to continue to grow and expand their business in the online market. It can be said that Amazon has been able to use various strategies which enable them to sustain their competitive position in the global market.  Based on the conducted reviewed in the previous section, it can be said that Amazon strategy includes differentiation approach and innovative approach. In doing so, the company has been able to have a sustainable focus on their core business values ensuring that their goals, objectives and mission are achieved.  In addition, the company has been able to sustain good relationship with its target market and all other stakeholders and the company focus itself on satisfying the costumers by providing them quality products and services in the online. The ability of the management to manage their financial resources and limit their expenses to sustain their needs for expansion has also been considered as one of the capabilities that sustain their competitive advantage. The strategies used by the Amazon include Intensive strategy, which aims to competently position and promote their products and services in the online market. The industry has also utilized the Integration strategy and forward integration in order to promote and closely manipulate where all the Amazon products and services are being sold. To improve financial performance, the company sees to it that they utilise all their resources in a manner that will be beneficial to enhance the performance of the company.              Based on the given case, it can be said that the two resources and capabilities of Amazon includes their flexibility and innovation strategy.  It can be said that the ability of the company to expand their business is through their ‘flexibility and innovation’ which enable Amazon to counter the risks of erosion and losing of their competitive advantage.  In order to cope with the various influences and effects of market environment changes, and to sustain their competitive advantage, the management of Amazon has been able to improve and expand its organisation so as to conduct business operations and activities on a global scale which include the expansion of Amazon through the online presence of the brand in different parts of the world and by making specific websites as well as considering merging and acquisitions (See Figure 2). Herein, the management of the company has been able to improve their organization structure its organisational structure to achieve their organisational objectives.  In addition, the improved organisational structure is done in order to initiate speedy and flexible measures in managing their internationally diverse employees. Figure 2 .Aside from this, the management of Amazon has also been able to focus on their research and development department and to initiate innovative strategies designed to provide a competitive advantage and edge in the marketplace. As business gravitates towards a global scale, entrepreneurs find themselves faced with the challenge of producing new and better products at reduced cost and market price. Daft (2003) pointed out that in managing a global environment, managers of Amazon must be characterised by the ability to bring about change through innovation and creativity. Further according to Daft, a revolutionised manager sees change, rather than stability, as the nature of things (2003). Innovation as a ground for doing business in the 21st century will be the consistent tugging force that the organisation must either strive to adopt or suffer the consequences of being left behind by competitors. In addition diversification approach is also considered by Amazon to ensure having sustainable competitive advantage. Part of the diversification is to generate new coffee products that would meet the needs of the consumers in various parts of the world. As discussed, the knowledge of the underlying sources of competitive advantage highlights the abilities and core competencies of Amazon as a world leader in coffee retailing industries. In this regard, the company must be able to determine strategies and ways to ensure that their competitive position and advantage are being sustained in all levels of the organization. Indeed, making a business successful in a particular setting demands crucial and detailed studies and examination of the factors that will generate the best results that will serve the aims and objectives of the company. In this light, owners of big business organizations operating in a competitive business environment should be in constant look out with its competitors and the overall status and events in the industry. Taking advantage of the opportunities and intensifying the strengths while minimizing the risks and weaknesses of a business firm greatly helps in predicting the success in business enterprise Jayne and Dipboye (2004) indicated that in highly differentiated industries intense competition results to more diverse operation systems and processes because the participation among different sectors within and outside the company is needed to gain more economic advantage. Assets, skills, and capabilities available to a particular business organization are pooled together to come up with better business strategies.   Amazon’s Future Strategy It can be said that the Internet provides opportunities for the online companies to develop relationships with suppliers as well as customers. It has been found that the number of competitive moves increased as Internet usage increased for different companies in the world. It becomes more important to manage relationships as competition increases through the use of e-commerce. It can be stated that the most effective Internet strategy for that Amazon can use in the future is a collaborative one with their channel partners.  It can be argued that a mixture of multiple revenue streams that monetizes content/database, uses e-commerce, and cross-sells through multiple channels is the key to success of Amazon. In addition, another future strategy of the company is to use integrated marketing communication to reach more clients in the global market.   Reference 7.0 Reference Bradley, F. (1999). International Marketing Strategy. Hertfordshire: Prentice Hall Europe.   Daft, R. (2003). Management. 6th Ed. Cincinnati, Ohio: Thomson South-Western.   Edell, J. A., & Keller. K. L. (1993). Analysing media interactions: Print reinforcement of television advertising campaigns (Working Paper). Durham, NC: Fuqua School of Business, Duke University.     Hollensen, S. (1998). Global marketing: A Market-Responsive Approach. Hampshire: Prentice Hall. Lowson, R. 2002, Strategic Operations Management: The New Competitive Advantage. New York: Routledge. Papavassilou, N. & Vlasis, S. (1997). Standardization versus adaptation of international advertising strategies: Towards a framework. EJM, 31(7): 504-527.   Peteraf, M (1993). The Cornerstones of Competitive Advantage: The Resource-based View. Strategic Management Journal, 14(2), 37-46.     Porter, M 1998, Competitive Strategy: Techniques for Analysing Industries and Competitors. Free Press.   Proctor, T 2000, Strategic Marketing: An Introduction, Routledge, London.   Sloman, J. and Sutcliffe, M. (2003). Economics for Business, 2nd Ed. Harlow, England:       Pearson Education Limited.     Williams, J. R. (1992). How Sustainable Is Your Competitive Advantage? California Management Review, Spring, pp. 29-51.           Credit:ivythesis.typepad.com

Sample Amazon.com Case Study

Business Strategy: Amazon Introduction With the advent of the information technology, specifically the internet, it is s...