Amazon - Strategic Capability

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Executive Summary This report has been designed to identify Amazon's strategy between 2007-2010 and also to pinpoint the company's strategic capabilities. Internal and External analysis reveals Amazon's position against its competitors as well as sources of value creation and cost reduction in its value chain. Amazon.com is a leading e-retailer and is a globally recognized brand, but is facing increasing competition from bricks and mortar companies setting up an online presence and current e-retailers increasing their geographical and product scope. Amazon.com also faces strong rivalry in its Web Services Business where more specialized web services companies are able to offer more products and have a broader geographical presence. The…show more content…
Amazon achieves this by controlling complementary products of the Amazon Kindle, in this case the Kindle store and the Amazon Whispernet. Strategic capability can be defined as the adequacy and suitability of the resources and competences of an organization for it to survive and prosper. (Johnson et al, 2005) Porter (1980) argues that it’s the industry structure within which the organization competes and how they position themselves that determine how profitable the firm will be and his models revolve around this argument. The resource base view of strategy however points not to industry structure but to the unique clusters of resource and capabilities each company possesses (Collis and Montgomery 1995, Stalk et al 1992) and therefore is much better suited in analyzing Amazon’s strategic capabilities. The Resource Based View assumes that firms can be conceptualized as bundles of resources and those resources are heterogeneously distributed across firms and that resource differences persist over time (Amit and Schoemaker, 1993) and when firms have resources that are valuable, rare, inimitable and non- substitutable (VRIN) they can achieve competitive advantage that cannot be easily duplicated by other firms. (Conner and Prahalad, 1996) Fig 2 Strategic Capabilities | Resources | | Competence | Warehouse/Fulfillment

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