The Suitability, Feasibility, and Acceptability of the International Strategy of Amazon.com - Report Example

In a Report Style Critically Discuss the Suitability, Feasibility and Acceptability of the International Strategy of Amazon.com Organisation Table ofContents Introduction 3 The Strategy of Amazon in the International Business 4 Market Development Level 5 Suitability 6 Feasibility 6 Acceptability 7 Service Development Level 7 Suitability 8 Feasibility 9 Acceptability 9 Product Development Level 9 Suitability 11 Feasibility 11 Acceptability 11 Recommendations 12 Conclusion 13 References 14 Bibliography 17 Introduction Amazon.Com has been one of the initial companies to sell goods over the web (internet). The company was founded by Jeff Bezos in 1994, and launched to the worldwide market in 1995. Initially, the company started as an online bookstore and then rapidly broadened into different divisions such as Video Home System (VHS) tapes and DVDs, music CDs, software, video games, electronic goods, toys, furniture and clothing as well as food items. Amazon considers its existence as entirely customer-centric business, which is focused on their company statement or the value of the organisation (Amazon.com Inc., 2012). The organisational value of Amazon is guided by certain leadership principles. These principles include customer obsession which intends to consider at the centre-stage for each and every customer who visit their online retail site. Furthermore, the company’s ownership is also a valuable component for its progression for the long-term. The organisational values also consider sustaining utmost standards of the offerings and to hire as well as develop the best possible talents within the organisation (Amazon. Com Inc., 2012). The main objective of this report is to analyse the international strategic plans of Amazon and to discuss the appropriateness, practicability as well as the adequacy of international strategies implemented by Amazon. The Strategy of Amazon in the International Business The notion of business strategy is concerned with the marketing of products and/or services as well as it also involves decision making about economic aspects, human resource strategies, manufacturing and operations along with certain other business components. The main purpose of a strategic business plan in an organisation is to set the direction of the business and to provide the company a set structure so that the products or the services it provides can meet the selected business objectives or the goals of the organisation (Open Office, 2004). The e-marketing plan provides a wide road map for the success of an e-business organisation such as Amazon. It is necessary to create a spontaneous overview of a good market plan which ensures a complete understanding of the e-business model. E-business model describes the architecture of information delivery along with its available products and services as well as the complete picture of sources of revenues (Embellix Software, 2000). Marketing management is a very necessary aspect because the business of Amazon operates in hostile and altering multifarious environment. The ability of a business to achieve profitable sales is impacted by a large number of environmental factors. Marketing plan is useful in a business which assists to recognise a source of competitive advantage, enables to commit to a strategy, get the resources needed to invest in the business, as well as to measure the performance of the business in a particular environment (Serrat, 2008). There are certain strategic levels which are needed to be analysed for understanding the international strategy of Amazon and their appropriateness, practicability and adequacy. Market Development Level With regard to the corporate objectives of an organisation, marketing planning provides an important framework. In relation to marketing planning, market development plays a crucial part in an organisation’s international strategy (Embellix Software, 2000). In this context, for market development, Amazon has acquired a specific growth prospect, advantages and cost effectiveness through their e-tailing services or the products in the growing international market (Centre for Integrated Marketing, 2005). For the procedure of developing and continuing a process of market development strategic plan, it is necessary to combine the organisation’s goals and abilities along with the increasingly changing market scenario. The strategic planning covers the entire process of the organisation which also includes the strategic business units along with each functional area (Zhao, 2000). With due consideration to its market development planning, Amazon implemented its sales facilities through the most well-liked social network website i.e. Facebook. Through this website, Amazon offers a personalised page, where consumers can visualise the product recommendations influenced by their peers, friends and their own tastes. Facebook, being among the most well-liked social networking websites, has a rich developer platform on which a consumer can create as well as share applications with a massive and growing commune of users and thus contribute to the overall market development of Amazon (Amazon Web Service, 2012). Furthermore, in order to develop its marketing bases, Amazon entered in the Chinese market in the year 2004 through another website named Joyo.Com in order to deal with the deficit and to stay on the leading position in the e-commerce market as well as to increase the market shares. Notably, China is considered as a country with one of the world’s highest internet using population. For reducing the financial risk, Amazon was attached to take advantages of the market potentials. In this regards, to satisfy the increasing demands for the local products by the Chinese consumers, the Merchant program of Amazon also generated more significance for the company, attracting increased number of customers (Scribd Inc., 2012). Suitability In the recent phenomenon, the consumer spending is observed to be rising significantly in the international market. The governmental policies in most of the developed and rapidly developing nations have targeted more than three million broadband users with the intention of increasing consumers’ likeliness to shop online (Euromonitor, 2008). The company also increased internet usage to open a new market for Amazon in the global dais, for instance in Indian market (Scribd.com, 2008). Feasibility The knowledge and the experience perceived by the organisation are widely considered as one of the major strengths of the company which is quite likely to assist in its successful acquisition and integration in the international market. Hence, this certain fact ensures the feasibility of the international strategies adopted by the company to consider social networking sites and enter into the Chinese market (Scribd.com, 2008). Acceptability The acceptability in the international strategic plan of Amazon, the e-tailing solutions considered by the company forecasted more than double increment regarding the aspect of market development investments that can be achieved within the year 2015 (Euromonitor, 2007). Even the company was nominated as more favourable by the shareholders for the long term investments along with the increasing rates and potential of high returns. In this regards, Amazon seeks to be the most customer-centric company which ensures to determine and come across all the needs of the customer concerning online shopping. In addition, it endeavours to offer lowest possible prices for the customer in order to facilitate them with retail opportunities (Scribd.com, 2008). Service Development Level The prospect for implementing creative service design is to concentrate on the drivers and operate in the service market with new concepts. In this modern scenario, the organisations need to adopt innovative ways for standing against the competition and to generate new values. Selling or pushing the advertisements is not sufficient these days. Furthermore, a good service design can assist in developing a more effective and profitable customer relationship. In terms of the service providing strategies, Amazon employs a very unique concept depicting the framework as the standard delivery or ‘greener strategy’. Through this framework, the company intends to enhance a totally exclusive concept and attracts the consumer towards the consciousness regarding the environment (Stephen Moritz, 2005). The ‘green’ concept ensures that the items will be delivered in a biodegradable plastic container. In order to obtain ‘green point’ the consumers will be persuaded to return the box after having made use of the product. Once they have accumulated an assured sum of points, an e-voucher will be sent to the customer, who ensures to spend at Amazon. Boxes will be reused by the company in future deliveries, which in the long term will reduce cost of packaging and will ensure less wastage (Stephen Moritz, 2005). The recent prepared and successful concept of e-marking by Amazon in the Indian market is known as ‘Junglee.com’ which is a new online shopping site ensuring customers to recover and to determine products available in the Indian e-retail market. ‘Junglee.com’ consists of the products of the Indian and global brands and also characterises various purchase choices from the online as well as the offline retailers inclusive of the Amazon under the same roof (Business Standards, 2012). Suitability The awareness to the nature is observed to be continuously increasing which in turn tends to influence the value of the brand accordingly with the Amazon’s image in the customer’s mind as well as the significant issue of sending product to the customers in the e-retailing industry. This strategy also follows the strategic performance of Amazon to build customer awareness from a long-run perspective. Feasibility The concept of the biodegradable containers despite of the fact that necessitates the comprehensive research by Amazon, also certify the customers that the product can be safely delivered. The exceedingly skilled members of the organisation can further assist to make and control the new ‘green points’ system along with the e-vouchers (Stephen Moritz, 2005). Acceptability With regards to the acceptability of the service development plan considered by Amazon, the cost benefit might not been attained, if the customers would not have returned the bio-degradable containers for reuse by the company. The consumers can differentiate through those packaging choice as the society’s awareness to the environment. The strategy of reducing the cost of production should also increase the returns to the shareholders and the extra interest rate can be generated over the greener initiative by the local Government (Stephen Moritz, 2005). Product Development Level The speedy changes in the consumer tastes, technology based companies such as Amazon, are required to develop a balanced flow of new products and services. An organisation can produce new products in two ways. One is all the way through the acquisition of a whole company, or by obtaining a patent or a license to those products which have already been produced by any other company and the other is to develop own product by the company’s own research and development unit by implementing latest technology. For instance, the study of the ‘prescriptive contact lenses’ of Amazon product range can be illustrated in this regards to identify the sustainable growth that the company attains in as its initiative to develop the offered product ranges (Stephen Moritz, 2005). The attained market reputation though sustainable product development initiatives by Amazon can be well observed from the diagram below: Source: (Stephen Moritz, 2005) Suitability By adopting such competitive strategies of product development, Amazon will be able to gain significant competitive advantages over its competitors such as Wal-Mart and Tesco, similar to the growth attained in the product segment of eyeglasses and contact lenses as can be observed from the above diagram (Stephen Moritz, 2005). Feasibility Feasibility is quite important a factor that needs to be considered by the organisation in order to gain better return on its investments while launching or offering its product to a particular market segment. Where the product is related to any specific segment, it can be allied with specialised joint venture of the related product that is most likely to reward better growth prospects such as in the case of eyeglasses, it can be affiliated by healthcare professionals to enhance the feasibility of the product and thus attain better customer satisfaction (Stephen Moritz, 2005). Acceptability Acceptability of products not only depend on the value added services, but it also tends to be depended on its price and features, by a considerable extent. With reference to its product development strategies regarding the product range of eyeglasses, Amazon was observed to consider these factors with immense significance that in turn rewarded it with sustainable growth in almost every market it had targeted towards (Stephen Moritz, 2005). Recommendations With reference to the above discussion, it can be affirmed that Amazon needs to maintain the relationships both with the internal as well as the external business environment factors in such ways that are flexible and compatible enough to respond to the continuous changes happening in the international business context (Johnson et al, 2006). The most important aspect that should be considered by Amazon is to effectively identify all the risk factors in order to facilitate the rapid and sustainable expansion of the organisation in the global operations. With this regards, Amazon must also concentrate on changing and developing its sources of management, be it operational, financial and others influencing factors. Furthermore, it will be beneficial for the company to improve the staffing procedure along with developing strategies to manage the foreign operations mitigating the influence of external business environmental factors such as language and cultural differences (Docstoc, 2011). Conclusion Amazon is one of the first major companies to sell goods over the internet which has become a worldwide established name. Therefore, it is quite likely that the company is quite experienced in taking the complete advantage of internet so as to market its products attaining higher customer satisfaction in today’s competitive scenario. In order to attain competitive advantages over its competitors using electronic retail industry for its overall organisational development, it provides useful methods to establish the relationship between Amazon with its customers and is further used to create value for the customer. In a very short period of time Amazon achieved a high-quality of satisfaction level from the customer amid the major competitors in this electronic retailing process. References Amazon. Com Inc., 2012. Earths Most Customer-Centric Company. About Amazon. [Online] Available at: http://www.amazon.com/Careers-Homepage/b?ie=UTF8&node=239364011 [Accessed April 02, 2012]. Amazon. Com Inc., 2012. Customer Obsession. Amazon Leadership Principles. [Online] Available at: http://www.amazon.com/Values-Careers-Homepage/b/ref=amb_link_5763692_3?ie=UTF8&node=239365011&pf_rd_m=ATVPDKIKX0DER&pf_rd_s=left-4&pf_rd_r=01MYXS6EWA6ZR4DTC4MS&pf_rd_t=101&pf_rd_p=1337714942&pf_rd_i=239364011 [Accessed April 02, 2012]. Amazon Web Service., 2012.Web Applications. Facebook Application. [Online] Available at: http://aws.amazon.com/facebook-application-hosting/ [Accessed April 02, 2012]. Business Standards., 2012. Companies & Industries. Amazon Debuts Junglee.Com In India. [Online] Available at: http://www.business-standard.com/india/news/amazon-debuts-jungleecom-in-india/156855/on [Accessed April 02, 2012]. Centre for Integrated Marketing, 2005. Amazon Bonding Customers with Integrated Service. Overview of how Amazon operates. [Online] Available at: http://www.centreforintegratedmarketing.com/gfx/documents/amazon_bonding_customers_with_integrated_service.pdf [Accessed April 02, 2012]. Docstoc., 2011. Amazon.com., 2006. Annual Reports. [Online] Available at: http://www.docstoc.com/docs/392698/Amazoncom-2006-Annual-Report [Accessed April 02, 2012]. Euromonitor, 2008. Athens portal. [Online] Available at: http://athens.portal.euromonitor.com/portal/server.pt?control=SetCommunity&CommunityID+207&PageID+720&cached+false&space+CommunityPage [Accessed April 02, 2012]. Embellix Software, 2000. E-Marketing Planning: Accountability and eMetrics. e-Business Models and E-Marketing Planning. 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