FXP5006_Assessment1-Attempt1

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Jan 9, 2024

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1 STRATEGIC PROCESS AND ANALYSIS STRATEGIC PROCESS AND ANALYSIS MBA-FPX5006: Business Strategy

2 STRATEGIC PROCESS AND ANALYSIS Table of Contents Title Page ......................................................................................................................................... 1 Table of Contents ............................................................................................................................. 2 Executive Summary ......................................................................................................................... 3 AFI Strategic Planning Framework .................................................................................................. 4 Role of Leadership and Ethical Responsibilities .............................................................................. 4 Internal Analysis .............................................................................................................................. 4 Amazon’s VRIO Analysis .................................................................................................... 5 External Analysis ............................................................................................................................. 6 PESTLE Analysis ................................................................................................................. 6 The Five Forces Analysis: Amazon ...................................................................................... 7 Recommendations and Course of Action ......................................................................................... 8 References ...................................................................................................................................... 10 Appendix ........................................................................................................................................ 11

3 STRATEGIC PROCESS AND ANALYSIS Executive Summary: Amazon Amazon.com. When you need something in a pinch, don’t have time to shop in stores, or just feeling plain lazy, it’s the first online retailer that comes to mind. Amazon started out as the “World’s Biggest Bookstore,” but now has expanded into a retail business, providing items like music, movies, clothing, jewelry, tools, technology, in addition to books (Sharma, 2020). Shoppers can explore and buy from a selection of thousands of new or used items at their fingertips. Like any industry, Amazon faces challenges to maintain their place as a top performer but has come up with ways to deal with them effectively. Amazon stands behind four main principles “ customer obsession rather than competitor focus, passion for invention, commitment to operational excellence, and long-term thinking” (Amazon.com, n.d.) Amazon is a multi-national technology and E-commerce giant that has become one of the world’s largest and most influential companies. Founded by Jeff Bezos, it started as an online bookstore in 1994 and quickly expanded into a wide range of products, including electronics, clothing, and more. This has led to Amazon constantly expanding, further attaining customer satisfaction and loyalty. The following paper utilizes a VRIO analysis, a PESTLE analysis, and a Five Forces model to describe Amazon’s strategic process. It analyzes the internal and external environments of the company and will recommend a course of action based on the analysis. Key Components of the AFI Strategic Planning Framework The AFI strategic planning framework is a widely recognized approach to strategic management that helps organizations analyze their internal and external environments, formulate effective strategies, and implement them to achieve long-term success and sustained competitive advantage. Rothaermel (2021) defines AFI as "Analyzing, Formulating, and Implementing":  Analyzing: This stage involves assessing the internal and external environments of the organization, including conducting a thorough analysis of the company’s strengths, weaknesses, opportunities, and threats.  Formulating: Insights gained from the analysis stage are used to formulate a strategic plan to leverage strengths, address weaknesses, capitalize on opportunities, and mitigate threats.  Implementing: Once a strategy is formulated, the next step is to put it to action by allocating resources, making organizational changes, and aligning various functional areas of the business. The use of this framework ultimately aids the company to gain and sustain a competitive advantage, which in turn, leads to more profits. Analysis helps to draw a picture of the company and establishes leadership’s roles. This also includes assessment of internal and external factors, using helpful tools such as the VRIO, PESTLE, and Porter’s Five Forces. This helps us understand and hurdles are in the way and how to develop a successful strategy. The framework piece of AFI is where the actual strategy is developed, when the questions of where, when, and how are thoroughly addressed. Once the strategy is formulated, the last step is implementation.

4 STRATEGIC PROCESS AND ANALYSIS The plan is now put into action and shows that the strategy is sustainable and resistant to competition. Using a strategic planning framework is essential for organizations to aiming to achieve long-term success and sustain a competitive advantage in a dynamic business landscape. Such framework provide a systematic approach to analyzing internal strengths and weaknesses, as well as external opportunities and threats. By evaluating these factors, organizations can formulate strategies to align with their strengths and exploit market opportunities while addressing vulnerabilities and mitigating potential risks. A well-implemented strategic planning framework ensures effective execution by providing a roadmap for implementation, monitoring progress, and adapting strategies as circumstances evolve. The Role of Leadership in Strategic Planning and Ethical Responsibility Leadership at a company like Amazon is not one to be underestimated. Leaders at Amazon are primarily tasked with organizing activities at the company. This involves overseeing projects, but also guiding junior employees. The role is crucial to enable the company to gain success and bolster productivity. Management of other employees is also a critical role that leaders share, as it promotes proper organization, which coordinates tasks carried out by even those at the bottom-most tier of the company. Leaders are required to adhere to ethical values and responsibilities, such as respecting their peers and those below them, maintain integrity in their work, and remain honest. They must ensure that the strategic direction and decisions of the company are transparent and clearly communication to stakeholders, like employees, customers, investors, and regulators. Leaders must also uphold ethical principals in all operations, including supplier relationships, employee treatment, and competition. With Amazon’s vast ecosystem, they must ensure and prioritize the ethical handling of customer and user data. Leaders are also expected to make sustainable choices in packaging, and energy consumption to reduce the company’s environmental footprint. These character traits only serve as assets for leaders within the Amazon organization. Environment of the Organization When planning in an organization, “environment” refers he the external factors, conditions, and influences that can impact the organizations operations, objectives, and strategic decisions. This environment encompasses a wide range of elements that can affect the organizations’ ability to achieve its goals. Understanding and analyzing the environment is crucial for effective planning because it helps the organization anticipate changes, profit on opportunities, and mitigate potential threats. Amazon’s Internal Environment Amazon’s business strategies directly relate to its organizational structure and governance. They have diversified into various markets, such as technology, entertainment, web services, and more. They highly focus on innovation, and operational efficiency. Amazon’s board of directors is responsible for overseeing the company’s strategic direction, risk

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