Amazon - Essay Example

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Amazon is one of those companies that were launched prior to the so called internet bubble and it has been able to maintain its position till today. The brand name of the company is the biggest asset the company has got…
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Download file to see previous pages This means that the company has successfully attracted the future clientele for itself. The young generation will continue using the online retailer throughout its life because they have had a good experience with the company. This is one of the greatest assets of Amazon.The company is also following cost leadership strategy with great success. The shift in the policy came after 2001 as it was the time when company decided that it has gained enough clientele to follow a cost leadership strategy. This strategy is working and it is expected to work in future as well. This is because in future more online retailers will come and competition for Amazon is increasing. The future competitors will come up with new innovations but the only way through which the new competitors can be fought is through cost cuttings. Any new competitor will not be able to compete with Amazon in future if the company offers excellent services at lowest price. Amazon is also currently trying to pursue a long term strategy and this is a good approach. The company should not focus on short term profits rather it should capitalize its brand name in a better way. The company is still in the growth phase therefore it should follow a growth oriented strategy. The lower profits in the short run can be accepted in favour of long term growth. The company is focusing on customer satisfaction and retention, according to the case. This strategy is also commendable as customers are the main source of revenue. Amazon is known to be customer friendly and this should remain the case in future as well. Customer base of the company is strong and this shows that customers are responding to the policies of the company. There are also certain problems in the long term strategy of the company. The company has not accumulated enough cash that is should have and it is not prepared to face any unseen economic disaster. Any unexpected economic problem can drive the company out of business and this is serious concern in the short run. The lower profits of the company through services are also a concern. The company should try to earn more and more revenue through advertisement. This is an area where the company is lacking. Google and Yahoo are making use of their brand name and presence to earn massive advertisement revenue. Amazon should do the same thing and should attract companies by selling places on its websites. This is an area where the company is lagging behind and more can be done in this regard. Long term growth strategy is good enough but short term cash accumulation should also under focus. Question 2 Turnaround strategy refers to a set of steps a company takes in order to rejuvenate its business that was previously not working in a desired manner. Businesses when facing serious problems are forced to think differently and come up with strategies that can bring new life to their company. Turnaround strategies help the company change its normal path and do something in order to perform better. Turnaround strategies involve reallocation of resources and the most common resource that is reallocated is the management. Companies are sometimes faced with problems that can only be solved by complete overhauling the way the business is run. Amazon is facing problems from its competitors and although the company is enjoying a first mover’s advantage, still competitors are quickly catching up. This is a problem for the company so turnaround strategy will aim at solving the problem of increasing competition. The company should start to think in a different way in order to save itself from the increased competition. The company should immediately turn its focus on its core activity and that is online ...Download file to see next pagesRead More
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