Synergistic Model Of Amazon

Amazon understood firsthand that the competitive advantage of a company originates immediately from how distinctive the organization's resources and competencies are. Amazon is able to both engage in production at a lower cost and generate a superior product at a standard cost. This is accomplished mostly via Amazon's strategy of having a wide variety of goods and competitive pricing. Customers know they can find basic products at slashed prices or high quality goods at standard prices and this is all achieved via the enormous range of products and product brands and types available on their massive marketplace. For example, the depiction displayed in the case study which shows how growth was related directly to: lower cost structure- lower prices customer experience traffic sellers -selection and convenience. While this is a grave oversimplification of the Amazon business model, it demonstrates how many aspects of the strategy reinforced one another.

Through selling more in a lower price, Amazon can achieve economies of scale, which in return can increase their bargaining power over its suppliers and partners.

The two supply chains of Walmart and Amazon are different from each other and are efficient at their own perspectives. Both the supply chains are highly efficient in reaching out the customers in different ways. Walmart’s supply chain is completely based on store based retailing whereas Amazon’s supply chain is based on online retailing. The various methods followed by Walmart in its supply chain are vendor management inventory, cross-docking and central warehousing. Amazon acts as a retailer, as a third party and as an agent in supply chain management while selling various products through online.

Amazon.com has built the relationship with its customer based on a particular shopping experience that is tight to three levels in the supply chain

Amazon is a company we all know and love. The company is widely known for its online retail shopping, it’s popular Kindle Series with e-bookstore, along with their cloud and order fulfillment services amongst many other things. Amazon has become a great example of a perfect collaboration system and utilizing all of its information systems. With the vast history of Amazon we can begin to ask certain questions that would help understand Amazon and its continual success in innovating: How does Amazon, as a company show their ability and willingness to collaborate, experiment, perform systems and abstract thinking? These questions and more will be further explained in this case study.

External stakeholders are customers, creditors and suppliers. Suppliers enjoy working meticulously with companies that have very high standards, quality, and quantity of items. It is important for suppliers to be comfortable when releasing products to companies. For example, if Amazon has many returns due to products being damaged, suppliers may neglect offers and seek a new opportunity. Creditors want to ensure that stakeholders or customers believe in paying bills, otherwise creditors have the ability to neglect providing credit opportunities for business to offer. Internal stakeholders need to inform credit customers how important having credit is and the affect it can have on their life for nonpayment. Customers are the top priority of many organizations whether online or face to face. It’s vital that customers are able to trust Amazon and the product quality that they sell. Failure to provide high quality products can lower the number of customers and can possible affect the business as a whole.

Amazon has been able to maintain sustainable competitive advantage because the company has adopted cost leadership, differentiation and growth strategies.

It provides a structure to capture the linkage of organizational activities that create value for the customer and profit for the organisation. It is particularly useful to get across the notion that operations and the other activities must work cross functionally for optimal organization performance(Chase et al. 2007).

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.

Amazon’s core competencies are in its ability to effectively use and develop technology to drive site traffic and enhance the customer experience. Their distinctive use of website real estate coupled with their ability to leverage their brand and effectively use that leverage to deliver low prices and high quality products, makes them a leader in online retailing. Their partner brands and their ability to adapt and recognize deficiencies enable them to effectively cut out the middle man, or at the very least, partner with them.

This paper reviews the supply chain management practices of Amazon.com (AMZN) and highlights findings in the framework of a Strengths – Weaknesses – Opportunities – Threats (SWOT) framework.

The company has many strengths. First, Amazon is the world’s leading online retailer. According to the 2016 Annual Report, Amazon had total net sales of US $135, 987 million in 2016. These total net sales include three segments which are North America, International, and AWS. Second, in comparison to many companies, Amazon has a superior logistics and distribution system, which allows the company to actualize improved customer fulfillment. Third, with its prolonged strategic drive on low-cost, differentiation, and focus, Amazon offers a wide range of product at low prices to customers. Fourth, Amazon enjoys global recognition from its customers. As stated earlier, Amazon built a strong brand in very little time. Finally, the

Excellent customer service is a way to set the organization apart from its competitors. Differentiation can be achieved through fast and correct execution of product ordering. To improve on the order process it is important to have the correct information provided in a timely fashion to all divisions. For integration to be successful information must be available throughout the entire supply chain.

Amazon.com is a Fortune 500 company that has revolutionized the retail industry. In recent years, Amazon has faced increased competition in the highly competitive online retail space as competitors invested heavily in their online storefronts and infrastructure. Positioned in a highly fragmented industry, Amazon must find solutions that can sustain its long term profitability and maintain its market share. To that end, Amazon should grow the Amazon Prime membership base and expand on its media and mobile offerings.

In 2000, Amazon and Toys-R-Us entered into a symbiotic agreement that would benefit both corporate entities. Both companies had recently had unimpressive fiscal years due to differing issues. Toys “R” Us struggled with poor order fulfillment. Although they were equipped with enough merchandise, other issues kept them from being able to get orders to customers in a timely manner; especially during the busy holiday season. Conversely, Amazon was forced to write off $34 million because of a miscalculation in inventory and had orders that could not be honored (Ouchi, 2004). Following these debacles, both organizations felt that joining