Global competitive strategies - Essay Example

Global Competitive Strategies Porter’s generic strategies refer to a category scheme which comprises of four different types of strategies that can be used by any businesses to achieve a competitive advantage over its competitors. The founder of this theory, Michael Porter, was of the view that these four different types of strategies can simply be defined under two heads, cost leadership and product differentiation. Amazon is one of the largest multinational companies of America and is also listed on the NASDAQ as AMZN.

It is reputed to be the world’s largest online retailer and has separate websites for the various countries in deals in. For those countries where it doesn’t have a country specific website, it provides international shipment. It is interesting to see which of these generic strategies are used by Amazon to achieve a competitive advantage. If all factors are considered, then it can be said that Amazon follows the differentiation strategy. To start off, in online selling businesses like Amazon, the security of transactions is a very important element.

Even though other factors of the like of product features prompt delivery, dedicated customer service and brand image need to be present in the case of online businesses, it is the security of transactions which differentiates an online business from others of its sort. Amazon, although it doesn’t really offer low prices (and doesn’t achieve competitive advantage through cost leadership), still people are attracted to the website as it has a very strong brand reputation and is one of the most credible book sellers on the internet.

Differentiation strategy can be achieved by either customizing products to the needs of the customer or through customizing a website as per customer’s needs. Those firms which are able to reduce the amounts of money spent on searches, those able to capture the trust of their customers online, and offer individual / personalized browsing experience to its customers are more likely to have customers come back to them again for making purchases as compared to other firms which to not portray these qualities.

Amazon capitalizes on such qualities by using collaborative filtering tools which offer the viewers of its website customized web pages which are based on trends like their past searching habits. The same software also allows Amazon to take part in anticipatory marketing techniques by suggesting titles to customers that they believe would appeal to their interests. According to a research carried out by Merrilees in 2001, many online or e-businesses now carry out a combination of two generic strategies at the same time to achieve a competitive advantage over their competitors.

It further mentions that Amazon is pretty efficient at various activities involving elements which are used to use the differentiate like innovation, branding and proper channel management to deliver the goods to the customers. Moreover, Merrilees also mentions that at the same time Amazon also offers very low costs, thereby also using a the cost leadership strategy to gain an edge over its competitors. Works Cited Merrilees, Bill, and Chetty B. C. Sylvia. Hidden (sme) Champions: the Role of Innovation and Strategy.

Auckland, NZ: College of Business, Massey University, 2001. Internet resource.