Analysis of Strategies of Amazon Australia for Market Success

This report analyses the strategies of Amazon Australia for market success. The report covers cost strategy, product differentiation, focus strategy, long-term strategy, and recommendations for promotion and marketing strategies.

Marketing Management

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Executive Summary
The main aim of this report is to analyse the strategies which is used by the company to
achieve the success in the market. In this paper, Amazon Australia is taken into consideration
to analyse the strategies. The company follow many strategies helps the company to grab the
high market share and increase the brand value. The company has to expand the business by
adopting the new strategies. The company will expand the business at the internatonal level
in the near future.

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Contents
Introduction................................................................................................................................3
Background................................................................................................................................3
Market Analysis.........................................................................................................................3
Cost strategy...........................................................................................................................3
Product differentiation............................................................................................................4
Focus strategy.........................................................................................................................5
Long term strategy of Amazon...............................................................................................6
Recommendations......................................................................................................................6
Promotion strategy..................................................................................................................6
Marketing strategy..................................................................................................................7
Conclusion..................................................................................................................................7
References..................................................................................................................................8
Appendix..................................................................................................................................10

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Introduction
Strategic analysis is a procedure to analyse the business environment of the company.
Strategic analysis helps an organisation to achieve the goal and objectives by identifying the
consumer behaviour and the external environment of the market. It helps the company to
analyse the resources to ensure the profitability competitiveness and growth of the company.
In this report, Amazon Australia is taken into consideration to analyse the strategies. In this
report, strategies of Amazon Australia are analysed which helps the company to gain the
competitive advantage. In the last stage of the report, recommendations will be provided.
Background
Amazon Australia is a US online retailer, it was founded in 1994. It started the business by
selling books online after the great success; it expanded his business massively in the past
years. In the recent years, it started operating in everything from its own branded tablets to
the household product. Amazon Australia has its own websites for Australia; it is the second
world largest company. The company earned the US $1 trillion with the help of 5666,000
employees (Amazon, 2018).
Market Analysis
Cost strategy
It is a price strategy which is low price offer by the company to the customer as compared to
the other company to stimulate the demand and gain market share. It is one of three market
strategies which can be easily adopted by any company. It is usually employed where the
product has few competitive advantages (Alamdari, and Fagan, (2017). It has been seen that
Amazon Australia offering the low prices to the customer to achieve the success and earn

STRATEGIES 4
more revenue. The main focus of the company is based on customer experience by offering
the low prices and provides the huge amount of products. The company sell many products
online which attract the customer towards the goods and services. On the Website of the
company, it is founded that there are a variety of products which has low prices as compared
to the market prices; this attracts the customer towards the good and services. On some
special occasions or festivals, it offers the high amount of discount which makes the customer
greedy towards the goods and buys the products in bulk. This strategy of the company helps
the company to achieve the higher name in the world and also achieves the customer loyalty
(Rothaermel, 2015). There are very few a company those have been success in achieves the
customer loyalty and awareness. Many cost leaders are relying on economies of scale to
achieve the efficiency. Economies of scale have been created when the cost of offering
goods and services decreases and the firm is able to provide the goods in large quantity.
Amazon has less advertising expenses or travelling expense, people can easily buy products
from its website. Thus, the company did not waste its time and money on travelling and
advertisement. That is a reason behind the low price strategy of the company because the
company has low cost (Nagle, and Müller, 2017).
The company can enjoy the high profits because it has a high market share in the market. It
can be said that high-priced competitors will not want to compete directly with the company.
The low-cost firm has an advantage that it can consume less time to influence the product.
Product differentiation
It is a strategy which makes the Amazon Australia different from other online websites.
Product differentiation is the process which makes the product differs as compared to the
others (Devece, Palacios-Marqués, Galindo-Martín, and Llopis-Albert, 2017). The company
makes the product more attractive to a particular target market, or target customer. The
company makes its product different from the competitors as well as its own product.

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Amazon Australia sold goods at the higher amount with the little product differentiation but
the competitors copied this strategy which creates the conflict between the companies
(Banker, Mashruwala, and Tripathy, 2014). It can be said that the competitors fought for the
cutthroat price war, but after this war Amazon constantly focuses on cost reduction by saving
the cost and introduce the little changes in the precious products.
Focus strategy
It is a marketing strategy in which the company main focus is given on its resources to enter
or expand the business in the new market. This strategy is adopted by the company when the
segment is set and the product is completely satisfying the customer needs. It is also one of
the three generic strategies. It has been seen that Amazon Australia follows this strategy to
expand the business at the higher level (Peng, 2017). Amazon started its business by selling
the books and now it sells every product which is available in the market such as household,
electronics and many more items. Amazon Australia expands its business by selling the new
products to the customer at the lower prices. It also expands the business from one market to
another market by building the customer loyalty. From the above analysis, it can be said that
Amazon is the world second largest company online. Amazon Australia always focuses on
customer satisfaction; it heard the customer complaints and takes as a recommendation and
make sure that it did not repeat more with another customer. This quality of Amazon builds
the strong relationship with the customer and attracts the more customers which increase the
revenue and profit of the company. This strategy helps the company in expanding the
business in the new market. Amazon Australia expands its business by merging with the
different dealers to sells their products; it deals with every item which can easily available in
the market. Focus strategy helps the company in expanding the business at the higher level
and makes the brand world famous (Leonidou, et al., 2015).

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The long-term strategy of Amazon
Amazon focuses on the long-term goals; it does not focus on the short-term goals. It has been
seen that Amazon focus on the next quarter which comes in the near future and this strategy
of the company helps the company to gain an advantage for a long time. It long term strategy
is helpful for the customer because its long-term strategy introduces the advance new
products (Pascual, et al., 2002). This strategy helps the company to survive long in the market
with the great success. A perfect example of this long-term strategy is that Amazon Web
series, its start-up and developers expand the series to the millions of customers. All size
companies use this series of AWS such as Interest, Johnson& Johnson, McDonald and many
more companies. This startup is made by focusing on the long-term benefits for the customer
and long-term success.
Recommendations
From the above analysis, it has been seen that the company follows the good strategies to
achieve the success in the market. But still, it has to focus on the more strategies which help
the company in attaining the high revenue.
Promotion strategy
Promotion strategy is a most important source for the company to build the customer
relationship. The advertisement is the best way to introduce the product in the market and
increase the customer in the market (Kim, Kim, Kim, and Magnini, 2016) Even the company
has a strength that it can easily promote its product through online. Nowadays, every person
is to use the social sites so that the company can easily promote its products on these sites by
uploading the pictures, post and many others. It helps the company in promoting the product
or increasing the customer for the high revenue (Huet, Frail, Lake, and Snyder, 2015).

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Marketing strategy
It is a strategy which helps the company to expand the business at the higher level by
focusing on resources. It has been seen that the company focus on its resources and expand
the business at the higher level (Wensley, 2016). But it has to focus on the developing
countries to expand the business at the international level. Amazon Australia has to the
implement its business in the shops or makes the stores for kept the products for a long time.
This strategy helps the company to earn more profit by providing the products to the
customers (Baker, 2014).
Conclusion
From the above analysis, it has been concluded that Amazon Australia is the world largest
companies in the online market. It has a high brand value which helps the company in
earning the more revenue. It has been seen that the company follows the strategies which help
the company in building the customer loyalty and attracts the more or more consumers
towards the goods and services of the company. For achieving the success, the company
offers the low prices as compared to the other companies to attract the more customers
towards the goods and services. The company follows the strategies which make the services
different from the others services. The company focus strategies help the company to
improve the resources and to expand the business. The long-term strategy of the company is
based on the long-term benefits. Although, the company has a good brand image it has to
improve the resources and techniques to target the new customers. The company has to adopt
the market and promotion strategy to expand the business at the higher level. To apply these
strategies; the company will achieve success in the near future.

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References
Alamdari, F. and Fagan, S., (2017) Impact of the adherence to the original low-cost model on
the profitability of low-cost airlines. In Low Cost Carriers (pp. 73-88). Routledge.
Amazon. (2018) About us. [online] Available from: https://www.aboutamazon.com/
[Accessed 23/09/18].
Baker, M.J. (2014) Marketing strategy and management. Macmillan International Higher
Education.
Banker, R. D., Mashruwala, R., and Tripathy, A. (2014) Does a differentiation strategy lead
to more sustainable financial performance than a cost leadership strategy?. Management
Decision, 52(5), 872-896.
Desjardins, J. (2017) Breaking Down How Amazon Makes Money [online] Available from:
www.visualcapitalist.com/breaking-amazon-makes-money/ [Accessed 23/09/18].
Devece, C., Palacios-Marqués, D., Galindo-Martín, M.Á. and Llopis-Albert, C. (2017)
Information Systems Strategy and its Relationship With Innovation Differentiation and
Organizational Performance. Information Systems Management, 34(3), pp.250-264.
Huet, A.L., Frail, C.K., Lake, L.M. and Snyder, M. E. (2015) Impact of passive and active
promotional strategies on patient acceptance of medication therapy management services.
Journal of the American Pharmacists Association, 55(2), pp.178-181.
Kim, J., Kim, P.B., Kim, J.E. and Magnini, V.P., (2016) Application of construal-level theory
to promotional strategies in the hotel industry. Journal of Travel Research, 55(3), pp.340-
352.
Leonidou, L. C., Fotiadis, T. A., Christodoulides, P., Spyropoulou, S., & Katsikeas, C. S.
(2015) Environmentally friendly export business strategy: Its determinants and effects on
competitive advantage and performance. International Business Review, 24(5), 798-811.

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Nagle, T.T. and Müller, G., (2017) The strategy and tactics of pricing: A guide to growing
more profitably. Routledge.
Nicolas, C. (2016) 11 Notes on Amazon. [online] Available from:
https://salon.thefamily.co/11-notes-on-amazon-part-1-cf49d610f195 [Accessed 23/09/18].
Pascual, M., Theruvath, T., Kawai, T., Tolkoff-Rubin, N. and Cosimi, A.B., (2002) Strategies
to improve long-term outcomes after renal transplantation. New England Journal of
Medicine, 346(8), pp.580-590.
Peng, M.W. (2017) Cultures, institutions, and strategic choices: Toward an institutional
perspective on business strategy. The Blackwell handbook of cross cultural management‐ ,
pp.52-66.
Rothaermel, F.T. (2015) Strategic management. McGraw-Hill Education.
Wensley, R., (2016) The basics of marketing strategy. In The marketing book (pp. 75-107).
Routledge.
1.

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Appendix
(Source: Colin, 2016)
(Source: Desjardins, 2017)