Amazon: International Business Strategy

This report discusses the international business strategy adopted by Amazon, with a focus on the recent strategic change of opening Amazon Go stores. It also analyzes Porter's five forces of Amazon Go and explores the leadership style of Jeff Bezos. The report concludes with suggestions for effective change management.

Running Head: AMAZON 0
Amazon
International business strategy

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Contents
Introduction about the company...........................................................................................................2
Introduction to the report.....................................................................................................................2
Recent strategic change done by Amazon.............................................................................................3
Strategy adopted by Amazon for bringing the Amazon Go in existence...............................................4
Porter’s five forces of Amazon Go........................................................................................................5
Leadership style followed by Jeff Bezos in Amazon.............................................................................6
Change management style that should be adopted by the organization.................................................7
Conclusion.............................................................................................................................................9
References...........................................................................................................................................11

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Introduction about the company
Amazon Inc. is a multinational company that focuses on the cloud computing, e-commerce
and artificial intelligence. The corporation is the biggest e-commerce service provider across
the globe which is known for offering effective services to its customers. The Jeff Bazos
founded it on July 1994. It has started by selling books, audiobook, MP3 downloads, video
games, electronics, furniture, toys, food and jewellery. It is also one of biggest Horsemen of
technology besides the Apple, Google and technology. Amazon has also established the
publishing arm, Amazon studio. It produces the electronics for customers including Fire
tablets, Echo devices, and fire TV. By doing this, it is one of the world’s biggest cloud
infrastructure service providers. In addition to this, it also has some retail websites for various
countries and also provides the service of international shipping of some products. Approx.
100 million people subscribed the Amazon Prime (Amazon, 2018).
Recently, it has also opened its own store with the name “Amazon Go.” The first store was
opened on the 22 January 2018 at the company’s building. The grocery stores of Amazon
operate in the four major location such as Seattle, Chicago, Washington, and Illinois (Bolman
& Deal, 2017). The Amazon Go stores of Amazon has some automated technologies that
includes the deep learning algorithms, computer vision and sensor fusion for automating the
purchases, checkout as well as payment method of customers. For availing the services at its
store, it has created the app with Amazon Go name. All the cameras as well as stores have
weight sensors for detecting the items that customers have took.
Introduction to the report
In this time, it has become essential for the companies to bring some strategic change in the
company. Due to this, customers are also changing their needs and demand frequently. Due
to this, it is required by the organization to bring changes in its strategy. In order to cope up
with the needs of the customers, Amazon has opened the new store with Amazon Go name.
In this grocery store, the automated payment system has been used for helping the customers
to not wait for long in the billing system. In the first section of the report, strategic changes
made by the Amazon Company have been done. For bringing these strategic changes, it is
also essential for the companies to adopt some effective strategy. The strategy requires
implementing effectively in the organization. Amazon has also implemented the strategy that
is being discussed in the report. It is true that companies adopt strategies in case of any

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change brought in the external environment. Competition and changing needs of customers
are two most important factors that initiate the company to bring some change. The
implementation of strategy has been discussed by explaining the porter’s five forces model of
external environment.
After the discussion of porter’s five forces, leadership style of Jeff Becoz, the founder of
Amazon has been discussed. Every leader is successful by adopting some unique leadership
style. Therefore, report has also highlighted the unique leadership style of Jeff who has
brought successful changes in the company. At the end of the report, suggestions are
provided for adopting the change management style that is more suitable.
Recent strategic change done by Amazon
The biggest e-commerce company has undergone a recent strategic change in order to
transform the grocery shopping experience of customers. It is true that it is most favourite
part of the customers is to wait in long checkout lines. In spite of automation in technology
for faster and easier check out, it is still one of the top most reasons of people to go in a store.
In order to solve this problem, Amazon has come up with the strategic change by “Amazon
Go.” Amazon Go is a chain of grocery stores in four major locations such as Washington,
Seattle, Illinois, and Chicago. It is also said to be “Self-checkout station” for the customers.
In its headquarter, Seattle stores for letting the customers to come and grab the things from
the shelves. After taking the products from shelves, they have to simply go out without even
waiting for too long in the checkout lines. For getting the best shopping experience,
customers are required to simple use the “Amazon Go app” for entering the store, take the
products, and just go outside (Blevins, Khwaja & Yang, 2017). This app automatically
detects what products customers have taken and returned to the respective shelves. Through
this, Amazon will charge the amount from customer’s amount and email the receipt of
amount.
The objective of this service is to transform the current retailing industry by using
technologies advancements. These technologies assist in ensuring that the corporation is able
to exploit the current retailing industry by introducing new technologies which reduces the
customer base from Wal-Mart which is one of the biggest competitor of Amazon in the
retailing industry. It is one of the best strategic changes done by the Amazon in order to

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provide the easy convenience to customers. This change has also received any of the positive
feedback and reviews on part of customers. Many analysts also feel that grocery industry is
required to bring some change. Therefore, Amazon has come up with an idea to bring
automisation in the experience of customers. Amazon come under the top most position for
tracking the best shopping behaviour of customers in a store. It has been seen that by bringing
this change, it has come up with great store experience of customers. Many researchers
suggested that, Amazon Go has paved the growth for “just walk out” groceries. There are
several advanced technologies Amazon is experimenting with the advanced technologies. It is
one of the “huge market apparel” that Amazon is using to reshape the shopping experience of
customers. It is an excellent platform find out by the Amazon to employ the clever business
techniques and strategies to incentivize the customers behaviour. It can also be said that
Amazon has developed a sort of recipe for applying the changes inn that way customers want
to shop (Shi, Lim, Weitz & France, 2018).
A promotional video published by Amazon stated that this store concept also uses several
technologies such as deep learning algorithms, computer vision as well as sensor fusion to
automate almost all the checkout, purchase, and payment process. In order to avail the
services of Amazon Go app, customers are required to download the Amazon Go app for
android and iOS that will link to the Amazon.com account. This app also facilitates the
customers to add other people to their Amazon account. By adding those, spouse as well as
kids bill will charge from the same bill. IN the Amazon Go store has various stores in order
to detect the items that customers took. If customers will take the item from shelf, it will
added to the virtual cart if the customer.
Strategy adopted by Amazon for bringing the Amazon Go in existence
The major strategy adopted by Amazon Go is “retail Expansion strategy.” By bringing this
strategy, it has brought the new retail shopping experience for the customers of Seattle. This
store was called the Amazon Go. In these stores, it has no staff to help the customers for
shopping. It is bringing the creative impression by bringing the changes through this
strategy. “Total research survey” states that people still want to go in the retail stores for
shopping (Twentify, 2018). It is also covering the grocery shopping in 360 degree. Whole
foods, Amazon Go, Amazon Prime, and Amazon Fresh all are connected with each other. By
adopting this expansion strategy, it is fulfilling the needs of customers in a great experience.
The retail strategy also pushes the traditional brick in order to innovate and compete with one

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another by doing innovation. It has adopted this strategy other than the discounts techniques.
Amazon is tapping the market by its traditional industry that will steal the major market share
from the traditional competitors. This will shift the customer’s online shopping experiences
with the right moves. It is sure that Amazon has offered the new era in the world of retail. It
has taken this step for fixing the waiting lines (Cusumano, 2017). Due to the automated
payment system, there is no waiting line and shoppers are enjoying this experience. It
enhances the comfort of shopping which come from the pleasant shopping experience as well
as accessibility. By adopting this strategy, it has changed itself. Amazon Go uses the real
cases rather than using the self-service checkouts. It has potentially shifted the importance of
various elements in the world of retail. The major revolution has come up from the Amazon
Go that makes the shoppers to become free from paying physically.
Porter’s five forces of Amazon Go
1. Threat of new entrants- The threat of new entrants is referred to the risk of entry of
new competitors in the market which adversely affect the profitability of the company. By
coming up with the concept of garb and go, grocery store can seem to be drastic but it has
introduced this due to the technical barriers that exist. For putting a competitive threat to the
Amazon, competitors are required to deploy the deep learning, computer vision and sensor
fusion. It was not the easy achievement for the Amazon; as it also faced some difficulties in
bring this idea with perfection for the customers (Craven, 2016).The recent acquisition of
Amazon with Whole foods gives it the resources and infrastructure in order to enter in the
grocery market. This also increases Amazon role in the health food market which is
becoming a growing demand for customers across the globe as their perceptive changes
towards health foods.
2. Threat of substitute services- If it is seen in direct comparison, there is no such
grocery market that allows the customer to leave without paying physically before checkout
from the store. In recent time, the only substitute available services are the tradition grocery
stores. The Amazon Go offers the convenience to customers for fast entry as well as exit.
Customers may prefer to shop at the established or tradition grocery chain due to simply or
loyalty (Grewal, Roggeveen & Nordfält, 2017). It creates challenges for Amazon, especially
in the case of developing nations since it will be difficult for the organisation to attract
customers to use its services. The substitute products are much easier to be accessed by the

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customers since they did not need their smartphone, ID, application or an internet connection
while purchasing products through traditional mediums.
3. Bargaining power of buyers- As the stores are moved out, there no question arises that
location will attract the enthusiastic customers. In Amazon Go, the bargaining power of
buyers is less. It is because Amazon Go is able to offer the level of convenience to its
customers other than any grocery store. It also has the ability to charge the higher prices. The
grocery store of Amazon Go also attracts the diverse customer base. Amazon Go does not
only rely on the single customer segment. These options are not offered by the competitors of
the company which provides a competitive advantage to Amazon. The number of smartphone
and internet users is increasing across the globe which is beneficial for Amazon since it will
allow the company to ensure it is able to exploit new customer base in the developing market.
They cannot receive similar services from any other competitor of Amazon which provides a
competitive advantage to the company. The corporation can exploit the market through this
service which will allow it to ensure that it expands its customer base through monopoly in
the market. Therefore, the bargaining power of buyer is quite low.
4. Bargaining power of supplier- The whole food merger of Amazon has also brought a
policy change in the operation of whole food. Presently, the management brand also prevents
the representative for the promotion of its brand. It worrying for the local as well as small
suppliers who mainly believe in such tactics for establishing a brand presence. The strength
of whole food believes in the strength that it has the ability to promote the organic and fresh
through its diversified suppliers. In the Amazon Go, the bargaining power of suppliers is low.
5. Rivalry between the existing firms- due to continuous increment in competition, it
becomes necessary to avail the innovative strategy. It is sure that, in order to enter into the
natural grocery, it will definitely face the competition with the Trader Joe’s and Sprouts
Farmers market. Amazon does not shy before taking any good move. After the acquisition, it
reduced the prices in its stores due to the increasing competition. The landscape between the
Amazon and its competitors is evolving fastely. From the current scenario, the pressure faced
by Amazon Go from the existing customers is medium and high.
Leadership style followed by Jeff Bezos in Amazon
The leadership style followed by Jeff Bazos is appreciated by its leadership skills. Jeff is a
study of how the satisfaction of customers affects the success of business. When the most of
the billionaires in the age of internet were spending their youth in learning the code and

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program, Bezos was fixing the tractor in the farm of grandfather. Jeff stated that grandfather
is the role model for its journey. Bezos has followed the transformational as well as
transformation leadership style. As per the qualities of transactional leader, it can be seen Jeff
as thee transformational leader. Jeff is termed as the leader to bring successful changes by
bringing innovation (Saskia, Mareï & Blanquart, 2016). Transformation leader is that
leadership approach that brings the changes in individuals as well as social systems
(Mullaney, 2017). It also creates the positive change and value in the followers by the
objective of developing followers with the leaders. Leader as a transformational leadership
skills also create the enthralling vision for the future that helps in influencing the heart and
mind of people in positive manner. Same as, Jeff Becoz has also believes in linking the long-
term objectives of the company with the values. It has also created the commitment and
interest to act as per the vision driving team efforts that is beyond the usual possibilities
(Kantor & Streitfeld, 2015). From the success of Amazon, it can be easily seen that the
company leader has achieved the results through following this style. In addition, Jeff was
also having the ability to inspire, envision even when the other people did on believe on the
vision of Bezos. In the first letter also, Jeff stated that the vision matters the most. It is also
stated that Jeff has announced that it will take the long-term perspectives for the company.It
has also stated to hold this vision for the very long-term time in order to bring success and
growth in the company. Due to this reason, the company brought consumer centric again and
again and it has succeeded due to this. Due to this, Amazon has become the one of the best
and valuable company in the world. It has also done various struggles behind achieving this
success. Through this style, it has also enhances the morale, performance as well as
motivation of followers (Rossman,2016).
In addition to this leadership style, Jeff believes in supportive the employees largely.
Therefore, democratic leadership also followed by the Jeff in its organization. In an annual
letter, because stated that previously it has only 614 employees. Now, it has approx., 2,30,000
employees. It is also planning to hire more than 1, 00,000 employees. The main reason for the
success of its leadership style is the involvement of employees before taking any decision.
Change management style that should be adopted by the organization
Change is one of the constant things that is required by the organization to adopt in a proper
manner. Managing change and adopt the right style requires time, efforts as well as training

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in effective manner. There is some change model that should be adopted by the organization
for managing proper change.
1. Kotter’s change management theory- It is one of the most popular theory that is adopted
by all the organization. Amazon should also follow this theory by focusing on its eight stages
properly. The stages of this changes management theory are:
• Increase urgency- this step is about increasing the sense of urgency among all the
people regarding change. It is true that when a sense of urgency will be created,
they will move forward quick in order to accomplish the positive results. Amazon
can also use this model by creating a sense of urgency among all the employees.
• Building a proper team- this step of kotter’s theory is linked with getting the right
people in the team who have proper knowledge, skills, and commitment toward
the goal. As Amazon already have the list of committed or dedicated employees,
so it can include all those people in the team so to bring the change in proper
manner.
• Getting the vision correct- In this stage, Amazon can create the proper vision. In
this stage, it should not only focus too much on the strategies rather than it should
also give proper consideration on the creativity, objectives and emotional connect
(Chen, Mislove & Wilson, 2016).
• Communicate- After creating the proper vision, it should communicate the change
in proper manner. Proper communication is an essential part and it is of great need
in the organization during change. Without communication, the leader will not
able to ensure that different sections are working collaboratively to achieve the
common goals of the company to ensure that it achieves it strategic goals.
• Focus on short-term goals- It is true that Amazon mostly focus on the long-term
goals. However, it should also focus on the short-term gaols in order to achieve
success without great pressure (Bejinariu, Jitarel, Sarca & Mocan, 2017).
• Do not give up- It is true that persistence is a great key to success in the
organization. In this step, it should properly explain the importance of change and
tell employees not to give up in any situation. It can also motivate employees by
linking the achievement with monetary as well as non-monetary benefits.
• Incorporate Change- Besides the management of change properly, it is also
essential to reinforce the change and make it an important part in the organization.

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By bringing the desired changes in organization, it can maintain an innovative
environment and apply innovative principles (Stouten, Roussean & De Cremer,
2018).
Besides this model, it should also use the ADKAR model for change management.
ADKAR model is such model that mainly focuses on those activities that have
direct connection with the goals and objective of the organization. It should use
this model in proper manner in order to get the best results or outcomes that can
be sustained. Amazon can also use this model for finding the gaps in the process
of change management. By finding the gaps, it can give the effective training to
the employees. It can also manage the resistance to change by using this model.
ADKAR model stands for awareness, desire, knowledge, ability and
reinforcement (Lee and Kotler, 2016). Awareness is related to the requirement and
need of change. It is true that it is essential for the company to firstly aware the
employees regarding the change that company want to bring. The second stage
“Desire” is to bring about the change and become an effective participant in it.
Knowledge refers to the how to bring the changes. Amazon should also provide
the clear knowledge to employees regarding how to bring the changes and what
will be their effect. Ability is the incorporation of changes on regular basis. It is
also significant for the companies to bring changes on regular basis for effective
results and outcomes (Sloot, 2018). The last Reinforcement refers to the keep it
implemented for seeing the results or bringing some changes according to the
results (Saunders, Barrington & Sridharan, 2015).
Conclusion
In the limelight of above discussion, it is concluded that Amazon is one of the biggest online
retailing company of the World. Due to its innovative services, it is serving various customers
in the world. Its revenue has also increased due to the maximisation of its services. The recent
change that Amazon has brought in the company is bringing the tradition concept back by
applying innovative approach. The new concept of Amazon is the grocery store chain with
the “Amazon Go” name. It has achieved the wide success due to this grocery store chain. In
its grocery store, it has applied the innovative concept in order to maximise the satisfaction of
customer for shopping. The unique concept of this store has enhances the shopping

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experience of customers from the shopping store. In its store, customers are not required to
pay at that time. It has saved the time of those customers who does not want to waste too
much time on waiting at the billing lines. This also facilitates the smooth functioning of its
company.

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