Functional Strategy Pertaining to CEO Project Company - Book Report/Review Example

Amazon Case Study On Functional Strategy- Pertaining to your CEO Project Company i. Essential goal In accordance to Amazon.com mission statement, “Our Vision is to be earth’s most customer centric company; to build a place where people can come to find and discover anything they might want to buy online,” the marketing Department’s goal for 2015 is to sell to everyone. It aims at performing this strategically to make sure that people develop a reading culture. ii. Resources Marketing requires heavy financial and logistic mechanism. To make it easy for the marketing department to actualize its 2015 goal, the company must be ready to support it financially so that it can make enough adverts, employ sales representatives all over the segment markets, and train the existing ones on how best to market the company. Finances cater for logistical activities for personnel and in shipping goods. Alternatively, finances can be used to venture into new regions, set up new stores, run promotions, sponsor events, promote community well being, but with the aim of attracting customers who in the long run can purchase what the company offers. The marketing department is a very important part in any organization. How well it is treated determines the level of returns. Finances can be used to carry out research on products, customers’ preferences, and their willingness to use the company’s platform to purchase their goods. Since amazon.com is an online marketing company, it requires heavy financing to collaborate with the banking sector that can link customers’ bank accounts to the site when placing an order. They have to make sure it is safe and reliable to use such platforms. Financing makes it possible for amazon.com to acquire products from publishers and manufacturers in cases where there is no credit. iii. Indicators of good results Marketing plays a critical role in promoting the company’s brand. If people are talking about the company in a good way, it is a possible indicator that the marketing department is effectively performing its role. An increase in the number of customers who visit the company’s site and place successful orders is a true indicator that the marketing department has convinced people on why they should chose amazon.com and not any other company. An increase in customer flow results to increase in sales volume that translates into profits. If the company makes good profits than are higher than those of the previous season, then definitely the marketing department has played its role nicely. Expansion of the business is an indicator that there are more customers willing to use its services. By venturing into new markets, setting up new stores, and increasing or diversifying its products shows that the marketing department is driving the message home by proving to people the benefits of using amazon.com. Successful companies develop and support their suppliers. This however depends on how the market demands for particular goods. Amazon.com develops and supports authors by allowing them to use the platform and pay the commission after their book is sold out. This is an indicator that the marketing department has seriously encouraged people to read and thus encouraging authors to publish more books. It does so to meet demand and make sure authors do not help its competitors by selling to them materials. 2. Strategy Implementation a. Six Sigma According to jack Welch, Six Sigma is world recognized quality program, which is concerned with customer satisfaction. When effectively applied, the end result is a remarkable improvement in buyer-seller relationships, reduces costs, and acts as a ground of developing strong leaders. To accomplish its purpose, Six Sigma approach does so through effective cost reduction exhibited in reduction of waste and the number of reject products. In addition, it improves product designs and internal processes to make sure end users get value and satisfaction of what they get on time. Literally, as Jack puts it, Six Sigma, if done right, it is better than a trip to the dentist. Since every company aims at improving operation efficiency, improving productivity, and minimizing costs. When using this approach, a key strategy is to build trust in customers and make them loyal. This can only be effective when a company meets customer expectations and even surpasses them. The approach is all about variation and eliminating it collaboratively with customers. Six Sigma makes this possible by helping organizations in unpicking their supply and distribution chains and creatively designing products to make sure customers do not get unpleasant products. i. GE and Six Sigma Six Sigma has two major applications. It can either be applied in removing variations in routine or in making sure large and complex projects are handled accurately. The latter is applicable to GE. GE is world class manufacturer of jet engines. Scientists in this company rely on the Six Sigma Approach in their manufacturing process. It must be understood that coming up with such engines require creativity and professionalism, and might take several years to come up with a single engine thus heavy capital investment. This gives an impression that scientists need to be smart and cannot afford to be inconsistence in their designing and manufacturing processes. To make sure there is consistency, the company applies the Six Sigma approach, especially on the drawing table to identify any faults. In such cases, there is need for intensive training and capability to analyze data. ii. Strength and weakness of Six Sigma Six Sigma promotes success in an organization. Through continuous training, it enables employee growth and improves sales. For instance, GE saved $8 billion through its approach. In addition, the approach ensures quality delivery, which in turn leads to customer satisfaction. However, the approach proves to be a disadvantage because it is complicated and requires full participation. It requires serious analysis especially through performing statistical analysis thus making it complicated and often time consuming. It can only be effective if the whole company participates and strives to work collaboratively. b. Burning issue for continuous improvement Capital is an important element in ensuring continuous improvement. However, Amazon’s revenues are slowing down daily. This is because most people increasingly prefer renting books as compared to purchasing. In addition, Amazon in most cases discounts physical books to create demand. Due to increased competition, the company’s eBook innovation is losing value as people find options all over the internet. Due to the listed reasons, the company is losing out on finances to make good strategies like venturing into new markets, stabilizing commodity prices, and collaborating with publishers and authors. 3. On valuation and control a. BSC Model The traditional model according to Kaplan & Norton (pg.153) incorporates finances, customers, internal business processes, and learning and growth, which revolve around vision and strategy. Financial perspective The main objective for Amazon.com will be to be an efficient online bookshop with effective business processes and resource management system. As an online business, there must be efficiency in administration to make sure that the Amazon.com operates within the estimated financial budgets. Using management systems will enable the company to calculate the percentage of invoices paid or received from customers and sellers using the platform within a specified period of time. Through such evaluation, the company can know the volume of books sold through its platform and thus making it easy to perform cost-benefit analysis. Customer perspective The main objective is to deliver high quality services to all customers. This can be achieved by ensuring there is timely delivery of purchased products so that the customer gets them in time and at the agreed location. This objective can also be achieved by negotiating heavily on behalf of the customers with sellers to ensure that the prices for all reading materials on its platform are discounted so that customers get value of their money. Internal processes perspective The main objective will be to improve safety to allow for expected year to year fluctuations in causality. Amazon.com has stores all over the world to make sure it places itself near to customers. However, it must take safety measures in ensuring that employees who work in those stores are protected against causalities like accidents, fire, and other health problems that result with cargo handling. In addition, the company must respect the environmental regulations when disposing of off waste products. Instead of disposing off old books, it can recycle them by discounting prices or donating them to locals. Learning and Growth perspective The main objectives will be teamwork and diversity. With teamwork, Amazon.com must ensure there is effective delivery of services through healthy working relationships. Diversity entails job satisfaction which can be measured by taking staff surveys, insisting on performance reports and development plans. b. Customized BSC Model Financial Perspective Objective: To be an efficient online bookshop with effective business processes and resource management systems through activities like efficiency in administration, operating within budgets, and calculating invoices paid and received in a specified period of time. Customer Perspective Objective: To deliver high quality services to all customers by making timely deliveries and negotiating prices on behalf of customers. Internal Processes Perspective Objective: To improve safety for expected year to year causalities by providing relevant security equipments and kits. Protecting the environment the environment entails recycling used products, planting trees, and using environment friendly chemicals. Learning and Growth Perspective Objective: Team work and diversity by fostering healthy working relationships and job satisfaction. 4. On Good Strategy/Bad Strategy & The Strategist a. Elements of the kernel The kernel strategy contains three elements: a diagnosis that defines the nature of the challenge, a guideline for dealing with the challenge, and a set of coherent actions that are designed to carry out the guiding policy. The most urgent obstacle at Amazon.com is competition from upcoming online shopping platforms. However, the company relies on the kernel strategy in overcoming such an obstacle. Diagnosis Amazon.com has to carefully scan its business environment to identify the type of competition and from whom it emerges. Online shopping platforms like Alibaba have blocked Amazon.com from accessing the China market thus posing as a real competitor. Other competitors are eBay and Google books. Through diagnosis, the company understands the nature of competition. It is an increase in online shopping, which Amazon alone cannot match the demand. In addition, the competition sprouts from customer preferences. Most customers prefer softcopy books and articles thus reducing demand for printed versions. A guiding policy for dealing with the challenge A guiding policy is to look out for new markets and venturing into them. In cases where an entry has been made, the company has to move closer to customers by constructing stores, which may in return reduce on logistical expenses and improving customer service. Another guiding policy is giving customers what they really want. When customers wanted softcopy books, amazon.com came up strongly by providing ebooks. A set of coherent actions designed to carry out the guiding policy Reducing prices is a coherent action that amazon.com can take in actualizing the policy. Price reduction, offering discounts, and giving bonuses can attract customers even with the persisting competition from other companies. Improving on technology is another action plan that the company can use to carry out the guiding policy. The 21st century generation is lured with technology advancement that a company portrays to them. b. Good and bad strategy A bad strategy occurs in situations where leaders intentionally give up when situations are difficult and thus end up avoiding making hard decisions. In some circumstances, leaders may have no idea or lack passion to identify why some challenges face them. On the contrary, a good strategy entails unexpected coherent actions that have substantial evidence. Very few organizations have a good strategy because they confuse it with performance goals. Amazon.com began as an online retail book shop. A good strategy that the company has utilized is diversification. Having understood that customers are not only interested in books alone but other commodities like cloths, electronics, and entertainment, they took advantage of the situation and provided the service. A bad strategy that amazon.com has taken is depriving publishers an opportunity from being innovative. This is evident especially in cases where publishers cannot bundle an eBook with the paperback. Publishers have no room to create relationships with customers, which make them opt for other means of reaching out for the customers. c. Strategy questions What does my organization bring to the world? Amazon.com brings to the world a unique, improved, secure, and guaranteed form of shopping. The online shopping platform makes shopping an interesting venture even when on a busy schedule. All you need to do is place an order and delivery will be made at the door step on time. Does the difference matter? Yes, the difference matters. The shopping mall has been converted itno an online mall that makes it easy for everyone to shop at the comfort of their homes and even when at work. It saves people the hustles of walking down the mall to locate items in a shelf. Is there something scarce and difficult to imitate? Everything about amazon.com is difficult to imitate. The established brand cannot be imitated. That is a fact! The most unique thing at amzon.com is the technology in use. For example cloud computing system enables the company to expand and shrink its infrastructure anytime should anything go wrong. Are we doing today what we need to do in order to matter tomorrow? Yes. With an increased reading culture among people, amazon.com has already partnered with major publishing companies to use its platform in launching the book before it is spread to other platforms. To ensure effective delivery, the company is moving close to customers by venturing into new markets and opening stores. In addition, the company is constantly staying up to date with its technology to facilitate effective service delivery. Work cited Kaplan, R., S., & Norton, D., P. Managing For The Long Term. Harvard Business Review. Jan- Feb 1996. Wheelen, T., L., & Hunger, J., D. Strategic Management and Business Policy Toward Global Sustainability. 2013. New York: Pearson. 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