Amazon 's Strategic Intent And Key Resources And Capabilities

This case study is concerned with the continual roll-out of Amazon’s global strategy through the development of resources and strategic capabilities. It is about global dominance through the development and use of technology and acquisitions and alliances to offer an increasing array of products and services and continually enhancing customer experience. The case discusses the widening of Amazon’s business through serving three distinct and different groups of customers. The case highlights a number of potentially disruptive technologies including Kindle and cloud computing.

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.

The story of Amazon.com is a marvelous successful one. A company ́s biography which since the foundation in 19941 (followed by webpage launch one year later in 19952) became the world’s market leader in e-tailing by fully focusing on customer satisfaction and consequently aligning all organization activities, such as for example corporate strategy as well as technological portfolio, towards the consumer needs.

Analyzing Amazon’s strategy will identify internal and external forces that Amazon must consider when deciding how to navigate the online market. Conducting both internal and external analyses is vital to the survival of any business, let alone the first online retailer. To accomplish this, looking at Amazon’s past behaviors, as well as conducting a PESTEL analysis, analyzing Porter’s Five Forces, and a SWOT Analysis as it pertains to Amazon will give further clarity on their position in the e-commerce market.

Amazon’s focus is on their customers. This marketing plan illustrates how Amazon uses its spirit of innovation and technology, and dedication to all its customers to become a leader in its market. Amazon has many different customers. They can be their consumers or shoppers, sellers, content creators, and or developers. Amazon has many different product offerings and services that set it apart from many of its competitors. This marketing plan illustrates who Amazon is and what they do. It outlines specifically their objectives and goals in becoming Earth’s most customer-centric company. SWOT analysis is to outline the company’s strengths, weaknesses, opportunities, and threats the company

Amazon.com spent over $400 million on digital business infrastructure that linked nine distribution centers and six customer service centers throughout the U.S., Europe, and Asia during 1998 and 1999. Due to the company’s larger customer base from expansion with the infrastructure in place Amazon.com will earn profits quickly. The digital business infrastructure allowed Amazon.com to cut their cost drastically because they did not have to stock every item. Customers received shipments faster which increased customer loyalty and satisfaction. IT capabilities enabled Amazon.com to cut cost, earn higher profits, and reduce competition by gaining partnerships (Applegate, Austin, Soule, 2009).

Amazon, Inc. is considered to be the leading online retailer in the world today with a platform of sale for over 40 different goods categories ranging from machine/motor auto parts, books, groceries and electronics. Apart from this, the large organization also has a platform for internet technology and ecommerce, a platform for internet advertising, a platform for logistics and fulfilment, an internet incubator for startups, and a search technology. The company was started in Seattle, America back in the year 1994 in July by Jeff Bezos, who was a former New York investment banker. Before Amazon achieved its great success, it was the original idea of Jeff to start a bookstore to sell books online. The company has tremendously advanced from an online bookstore to a globally known online Wal-Mart where many products are sold such as Hardware and Tools, games and toys, Cookware and Music CDs. Amazon gross sales over the years have shown the company’s incredible growth with revenues back in 1997 being $150 million growing over $100 billion today (Kargar, 2004; Mellahi & Johnson, 2000).

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Amazon.com has been a great resource for online shopping. The popularity of Amazon.com has grown over the last 21 years and continues to offer new innovations that lead to the company’s continuous success. Amazon offers most products held in stores usually at a lower price. Over the years, Amazon has become the go-to site for shopping. Amazon prime with free 2-day shipping has made it convenient to shop from the comfort of your home, with a guarantee on when the items will be delivered. Amazon.com is one of the leading online retail websites around the globe. Amazon.com was founded in July 1994 by Jeff Bezos in Seattle, Washington and strives to be “the most customer centric company where people can find and discover virtually anything they want to buy online” (amazon.com). The website started in 1995 with only one target market in mind, book lovers. Jeff Bezos wanted a place for book lovers to browse millions of books in one convenient place. The company was a huge success just after 30 days, fulfilling orders in all 50 states and 45 countries around the world. Amazon.com’s warehouse started in a Seattle-area garage. Now, “Amazon operates retail websites and offers platforms that enable third party sellers to sell their products on the Amazon.com website” (amazon.com). Amazon has grown so much in the past 20 years with warehouses in 18 states and 15 countries. The wide range of services and goods lead to the company’s success. Some of

1. Management – Amazon has many corporate controls in place to ensure the integrity of the organization (“Company,” 2011). First, they have a code of business conduct and ethics that lays out the ethical rules that must be complied with (“Company,” 2011). They have a system of internal auditing and controls in place to make sure that the company is not altering financial statements or committing any illegal activity in the financial reporting process (“Company,” 2011). Amazon has an audit committee that is responsible for these types of activities as well as reviewing complaints from within the organization (“Company,” 2011). Organization members are encouraged to anonymously submit instances in which employees are engaging in questionable accounting or auditing matters (“Company,” 2011). The audit committee also helps the board of directors in verifying the accuracy of all financial statements and its compliance with all legal requirements (“Company,” 2011).

As Amazon.com continued to expand, the company’s strategic business units (SBU) consisted of four key divisions: (1) U.S. Books/Music/DVD/Video (2) U.S. Electronics, Tools, and Kitchen (3) Services and (4) International (Ratnasingham, 2006). This business composition makes it easier to focus on separate specific strategies for each unit. The company’s business model also provides a competitive advantage. Amazon benefits from being able to maintain a virtual store front with distribution centers located in low rent areas. In all, a combination of convenience, speed, reliability, discounted

Amazon.com, INC. opened its online retail website in 1995, and has now become one of the largest online retailers in the world grossing over 88 billion dollars in sales in 2014 (Business Insight, 2014). With ten different online markets across the world including the United States, China, the United Kingdom, Canada, Japan, and several other countries. Amazon.com, INC. sells a variety of merchandise from electronics, apparel, books, and an assortment of other general merchandise items. Their variety of merchandise, The convenience of ordering online, and Amazon’s ability to ship millions of packages every year is why they have become such a powerful company (Rosenblum, 2014).

Beyond the highly anticipated package delivery drones and the cashier-free grocery stores of Amazon, there are numerous business segments that help Amazon remain as one of the largest online e-commerce marketplaces. Amazon has set up an empire that has enabled it to continue with highly lucrative strategies and business opportunities that continually push it forward. “Amazon is at the beginning of an investment cycle,” one of Morgan Stanley’s financial analysts remarked and also stated “unclear how long this cycle is expected to last.”

Amazon has forever changed the face of e-commerce. To start out this journey we must first talk about Bezos and the simple fact it was always about the customer’s needs. The main factors being price, convenience, and a huge variety of selections; a culture started with his

“Relentlessly focus on customer experience by offering our customers low prices, convenience, and a wide selection of merchandise.”