Strategic Management for Amazon Company - Case Study Example

STRATEGIC MANAGEMENT FOR THE AMAZON COMPANY By Location Introduction Amazon started as an online book selling company in the year 1995. The CEO, Jeff Bezos devoted computer knowledge towards the implementation of a company that would suit the needs of a diverse group of customers at the global scale. Bezos established the business organization with a view to enable different consumer groups to access and buy books in a faster way. The company’s vision was to engage US customers with a continuous support through the prompt delivery of some types of books upon every online placement of an order. As time wore out, Bezos realized the need for diversification of the company’s investments to deliver numerous products to the global customer groups. These products ranged from technological devices, entertainment products, and computer software (Cohen, 2010, p. 64). The following study seeks to report a conclusive research on the strategic management process of the company with an assertion of the appropriate and accurate resolutions necessary for competitive growth and success in the market. Amazon’s strategy in the period since 2007-2009, and further to the early 2010 Research indicates that the company grew from a capital base of $80 million in the early 1990s to stand at $29.5 billion in the year 2008. Jeff Bezos implemented a growth strategy in the organization all through the period, a factor that led to profound competences as the Amazon.com Company was able to penetrate through different global market segments and reassert its presence to the consumer groups (Mennen 2010, p. 75). Arguably, the company’s vision and mission statements enabled it to achieve these outcomes as they tamed the present employees and other stakeholders to devote their performances towards the set goals and obligations. Initially, Bezos devotion in the online marketing industry was to set the pace for abundant growth in the fast delivery of products through to clients in the global market (Johnson 2014, p. 540). He strategically defined the use of technology and other innovative tools centred on ensuring efficiency as the aggregate solution to roll out the company’s need for profitable growth against similar and different competitors in the global market. Bezos perceived that technological innovations were the best solutions for the entire global community was facing financial challenges that resulted from the 2008 economic crunch. The technological and innovative strategy drawn by the company’s CEO targeted to ensure that the global crisis did not deter Amazon from acquiring its customer-centric goals despite the financial challenges that the entire society was facing (Davenport, Leibold, & Voelpel 2006, p. 70). Considering the effective nature of the business, Bezos was certain that the improvements were salient to ensuring that the company’s customers would be capable of purchasing and acquiring the products on a faster means. The strategy comprised of product portfolio expansion whereby the company’s long-range plan evaluated and asserted on the importance of cheap pricing multiple groups of customers. Through such strategic approaches, Amazon could reach and sell accurately to consumer clients. The CEO identified the group as critical towards global realization of the brand. Further, the company engaged in advertisements and the encouragement process of the global society to place online orders for any products sold with a capital ‘A’. The customer-centric approach was about the salient importance to the company since it would ensure that the company’s name was a global brand and its prospective clientele would show loyalty through profitable purchases at the short-run period. Initially, the research accrued information that the company was always implementing projects, but it would take a period of 5-7 years before accruing any beneficial returns on investments (Johnson 2014, p. 541). According to the company’s surveys, the UK, German, Spain, and Southeast Asian markets represented 47% of its market share outside the US. However, the Seattle based company rehearsed that such a market share growth was threatened by the presence of the financial crisis and there was an abrupt need to implement utilities that would ensure lengthened global dominance and growth despite the challenges (Davenport, Leibold, & Voelpel 2006, p. 76). Bezos was indirectly using the technology and innovation oriented strategy as the best approach to tame the prevalence of competitors from growing their competences at the online media platform. The strategic implementation process of the Seattle based company resolved with the use of faster technological approaches since its suppliers in the region held and still hold the largest bookselling stores in the world. Until the year 2010, the company was able to improve its profit margins despite the threat of the global crisis in the world (Johnson 2014, p. 545). Evaluation of Amazon’s diversification strategy, while still developing an accurate strategy to propel the company Since the beginning of globalization in the 1990s, many companies are yet to realize the effective nature of the ideology. However, following Amazon’s success in the economic depression period, the company’s C EO rests determined that the business portfolio is likely to increase as such an approach is important to accruing more segmental growth. The company’s integrated diversification strategy is rooted in the definition of, and growth of its three customer groups. Mainly, Amazon targets direct consumer customers in the global platform, and the strategy enables the organization to influence private clients through the abundant and realistic assertion of favourable measures. Secondly, its resolutions to make purchases since they hold a lot and immense information concerning the company’s product portfolio through Amazon’s web-based approaches (Davenport, Leibold, & Voelpel 2006, p. 79). Precisely, the Amazon Kindle developed through the company’s diversification strategy through technological expansion enables readers from different lingual backgrounds to access and read books at the online platform for fair charges. The strategic implementation of the Kindle technology indicates that Amazon’s diversification strategy relates to the customer-centric approach with the initial technology-based vision to achieve abundant growth and market penetration to different regions of the global society (Keung, 2008, p. 96). Since the Kindle device enabled any customer in the global society to download any book, the CEO was certain that the market segment would grow profusely despite the threat of new competitors seeking to sell similar products to the same markets. The company’s information indicates that the introduction of the Kindle device revamped its bookselling performance at a 110% change in the sells records (Johnson 2014, p. 554). Considerably, the actual information reveals that by the end of 2009, the number of books sold escalated from 90,000 to 190,000. Further, the company intensified its capitalization in the year 2008 by US$1. 03 billion. This intensive investment enabled Amazon to be capable of addressing the growing market needs through the innovative implementation of technologies in the market. The company was also able to diversify its content to ensure that it served other new segments comprising of consumers with different needs. Thirdly, the initiative drew the company closer to achieving its goals since it inclined it to the platform of developing seller platforms and technological infrastructure (Hill & Jones 2012, p. 46). Considerably, the diversification strategy of the company seemed comprehensive and best suited towards growth in the company’s market share since Amazon was capable of rebranding as the best online marketing company globally during and after the economic depression period. However, the numerous investment approaches were a threat to the company since it was spending hefty amounts of capital for uncertain technologies (Davenport, Leibold, & Voelpel 2006, p. 80). It is indicated that the company’s market share prices slumped due to its low returns on profits earned by the end of 2006, Amazon’s only option was to engage on a slow but precise approach to new investment plans. The alternative diversification strategy for the online-based company is one, which would reach almost every group of consumers and deliver the desired effect. Further, Amazon acknowledges that its duty in the market is to serve consumer clients with the best options of products that may lack in their locality. After evaluating its three groups of clients that further seller and developer customers, the company’s diversification strategy should be centred on the identification of each of the groups’ needs in order to serve them accurately (Cohen, 2010, p. 66). Therefore, the best diversification strategy is a cheap customer-centric strategy that delivers products in accordance to the prevailing needs and wants. A value chain analysis of the Amazon.com Company and its primary support activities Amazons technology and operations plan The technology and operations plan of the company is vital is ensuring that Amazon asserts its customer-centric approach to the global market segment. Through such an analytical approach, the company shall be able to define the most suitable technologies that when implemented in its portfolio will engage all its probable clientele groups to reflect their attention towards the company’s products (Cohen, 2010, p. 68). Secondly, the management is capable to use the strategic technology and operations approaches in defining the capabilities of its 27,000-employee population, a factor that enables it to ensure that all performances are centred to achieve the set goals and objectives (Hill & Jones 2012, p. 48). Through the company’s approach, Amazon has been able to execute profound researches through the online platform to exchange views with its stakeholders. These groups are essential for the company’s determination of success in its programs alongside the declaration of the available threats and opportunities in the company’s environment of operation. It is realistic that the culture enables Amazon to continually grow against its competitors who comprise of eBay, Priceline.com Inco prorated, and The Ticketmaster Entertainment Inc. among others (Johnson 2014, p. 556). The company asserts that the approach enables it to amass all its factors of production towards the implementation of profound measures in delivering customer-centric performances. Marketing and customer -centric approaches Amazon’s peer comparison surveys indicate that the marketing structure enables it to ensure unchallenged performance in all its market segments and for all its products. Arguably, the merits of success rehearse that Amazon accrued a sales figure of $1.97 billion in the year 2008 seconded by eBay Inc. with merely half the amount. Precisely, the marketing prospects of the organization create knowledge to the production team by identifying and recording consumer trends for the company’s benefits (Davenport, Leibold, & Voelpel 2006, p. 90). Further, Amazon is capable of borrowing the required financial aid after its marketers assert on the required products that seem vital to serve the present and the evolving needs in the consumer markets. Further, Amazon implements the marketing and customer-centric design of influencing the market with a view that the global market consumer and seller customers have a converging consumer culture that can be addressed through profound and accurate technological approaches. Similarly, the convergent consumer culture is often defined on a customized approach since customers from different lingual backgrounds require that the products be addressed in their languages (Johnson 2014, p. 584). With such information at stake, Amazon is always capable of differentiating its offers against those of its customers to acquire the set goals and grow its segments competitively. The competitive marketing mix approach Amazon identifies its global consumers’ requirements as intense and needing prompt resolutions through accurate and on-time deliveries. The company conquers the threat of competition that might emanate from the market challenger-eBay in case it restructures its approaches to the consumer markets and adapts new technological approaches that seem to be more authoritative. Further, Amazon centres its obligation in achieving profound effects through the competitive marketing mix approach, a factor that enables it to dominate the global market segment at 47% despite the prevalence of over 10 other companies offering similar services to the set groups of customers (Cohen, 2010, p. 69). Essentially, the company’s sales continue to increase despite the obvious global challenges. For example, Amazon established a doubled sales amount following the implementation of the Kindle downloading device. This period was challenging due to the presence of global financial crisis, but the company’s expansive information enabled it to deliver its products effectively to the global consumer. Precisely, different consumer groups of customers were capable of placing online orders and downloading the present e-books promptly (Johnson 2014, p. 589). Identification of Amazon’s competitive position and insertion of graphical representations mapping its position against its competitors with reference to the ongoing analysis in order to identify the strategic behaviours that might allow it to become sustainable competitive The graphical representation shown in the above figure establishes the sales forecast on Amazon among other competitors that centrally seek to deliver common commodities to a given group of clients. Substantially, the case indicates that Amazon engages in the outreach of suppliers for specific goods, then prices them through its web-based approaches, and eventually ships them to its various groups of customers upon every order placement. The graph indicates Wal-Mart at the highest point having accrued a total sales volume exceeding $404 million. Despite the fact that Amazon was founded in1990s, the sales forecast implemented since the end of 2000 throughout to the year 2008, it is knowledgeable that Amazon’s sales grew at a slow pace compared to those of the Google Company. On the third account, it is acknowledged that Amazon’s previous strategies before the year 2008 were deterred to the desired growth as the company failed to amass all objectives necessary for the implementation of its plans (Johnson 2014, p. 586). The evaluation study also indicates the Apple Inc. as a potential competitor that the company should consider in taming the market since its sales outcomes were implemented as a 32.4-point revealing a difference of 13.3 points. Other companies in the sector have also grown profusely and the company rests with no alternative obligations rather than the implementation of substantial changes to its strategies in order to achieve profitable outcomes in the short run period. These stylistic approaches seem common to other businesses that decided to turn to the digital arena in order to reach a wide network of consumers (Hill & Jones 2014, p. 46). Arguably, Amazon’s goal in the global arena was the need to ensure competitive growth through technological innovation to acquaint its probable customers with the most resilient approaches. For instance, the company’s CEO, Jeff Bezos asserted that the advent of globalization and the revolution of the world through computer-based approaches were a key to success in delivering customer-centric products at the global arena. Upon realizing Seattle held the biggest bookstores in the US, Amazon.com Company was knowledgeable of accruing the available benefits in the book-oriented market segment in the country and also on the global platform (Hill & Jones 2014, p. 56). This approach was drawn to the conclusion that the company was acting in accordance to the market needs by implementing technology and innovative solutions at a continuous process. Such an approach seemed valuable to the company since it would assert knowledge of the consumers and other group of customers concerning its loyalty in delivering a sustainable competitive advantage (Cohen, 2010, p. 70). After establishing the graph, which implements the sales forecast and the growth rate for seven companies among them the Amazon.com. Conclusion The study evaluates Amazon’s strategic management approaches and often reveals that its first proprietor exerts much control to the performances and the implementation of technological and innovative changes. Considerably, such influences are likely to affect any business operating to deliver profound customer-centric services to the global community. The case indicates that the CEO defines the process of delivering value to the clientele community, a factor that bars growth in the short run period since the global clientele community deciphers values differently depending on its environment. However, the resolution to implement a study and evaluate the three customer groups of the company was propulsion towards growth as it led to the implementation of the Kindle device and technology in accordance to the customer needs (Davenport, Leibold, & Voelpel 2006, p. 96). Thereafter, Amazon acknowledged improved sales performances. Bibliography Cohen, S 2010, Amazon income,$a, how anyone of any age, location, and/or background can build a highly profitable online business with Amazon, Ocala, Fla, Atlantic Pub, Group. Davenport, T, Leibold, M, & Voelpel, S 2006, Strategic management in the innovation economy, Strategy approaches and tools for dynamic innovation capabilities, Erlangen, Publicis. Hill, C & Jones, G 2012, Strategic Management, Cengage Learning. Hill, CW & Jones, GR, 2014, Essentials of strategic management, Australia, South-Western Cengage Learning. Johnson, S 2014, Case study, Amazon.com Company 9e, Pearson Publishers, Australia. Keung, L 2008, Strategic Management in the Media, Theory to Practice, London, Sage Publications. Mennen, M 2010, Global Corporate Strategy - A Critical Analysis and Evaluation of Amazon.com, München, GRIN Verlag GmbH. Read More