Corporate Strategy of Amazon: Supply Chain, Procurement, Sustainability

This report analyzes the corporate strategy of Amazon, including its supply chain, procurement, and sustainability objectives. It provides an overview of the company, its supply chain analysis, procurement and purchasing theories, and sustainability objectives. Recommendations are also provided.

CORPORATE
STRATEGY

Table of Contents
INTRODUCTION ..........................................................................................................................3
TASK...............................................................................................................................................3
Company's overview...................................................................................................................3
Supply chain analysis..................................................................................................................4
Analysis of procurement and purchasing theories .....................................................................6
Analysis of sustainability objectives and its relation to business level strategy ........................8
Recommendations ....................................................................................................................10
CONCLUSION .............................................................................................................................11
REFERENCES..............................................................................................................................13

INTRODUCTION
Corporate strategy can be defined as hierarchically strategic plan in context of organisation that
define different types of corporate goals as well as direction and their ways to attainment of
different types of strategic activities (Bednárik, 2019). In a long term. It is defining vision of
direciton of company which helps to determine value of organisation, setting out strategies goals
that create motivation among workers for attainment of these goals. This project report includes
analysation of Amazon which is American multinational company that is based on technology. It
is focusing on e-commerce, digital streaming, artificial intelligence and cloud computing. This
project report includes introduction and background of company. It consist supply chain analysis
of company along with company's supply network as well as supplier relationship management
strategies. It analyse procurement and purchasing of theories of company along with its strategic
objectives as well as its relation with business level strategies. Moreover, it includes
recommendation for company to improve its business strategies.
TASK
Company's overview
Amazon, UK is a part of Amazon which is American company providing its service in different
countries. It was established in the year 1994 in US by Jeff Bezos. It is one of large organisation
on basis of its revenue and numbers of employees. This organisation is having around 14,68,000
employees working for growth and success of company (Bier, and White, 2021). It is a e-
commerce company providing different service like cloud computing, artificial intelligence,
digital streaming and other things. It is one of influential company in terms of economic and
cultural factors. It is an organisation which is based on technology and innovation, it is using
customer data in order to develop customer focus services. It is using innovation in order to
enhance experience of customers and to get advantage to differentiation. On basis of innovation
and customer driven approach, this organisation is getting popularity among customers. In UK, it
is adopting all norms of government in order to maintain smooth flow of operation. It is
providing services on basis of needs, wants and preference of customers that provide them
success and growth in market. Managers of Amazon is using values chain analysis for purpose
of considering different types steps to add or subtract values from products and service of
company It helps them for purpose of providing competitive advantage to business. It can be

based on two main aspect like cost reduction and differentiation. Cost reduction is one of aspect
that is used by companies for making different activities in values more efficient along with
making it less expensive. Product differentiation is another aspect in which focus of company is
investing more resources as well as time in activities like research an development, marketing,
design that allow firm to stand out their products from others. Amazon is using this aspect for
purpose of creating values for their products as it is more and more investing on research and
development that allow them to differentiate their products and service.
Supply chain analysis
Supply chain can be defined as activities required by companies in order to provide
different types of products and service to consumers. It is focusing on core activities of
companies that is required for purpose of converting raw material into finished goods an service.
Supply chain analysis on the other hand is a process for purpose of evaluation of different stages
of supply chain from acquisition of raw materials and supplies of business from supplier to
delivery of its products to their final customers (Chat, 2021). In analysation of supply chain,
different aspects are analysation from availability as well as prices of raw material to
transportation, logistics, demand, final products and other things. It not only helps managers of
Amazon for understanding work of supply chain but also identify companies with which they
can do business. There are different method of supply chain analysis of company. All these
efforts are made by companies for purpose of expansion of their business operation. There are
different types of methods are used by companies for purpose of supply chain analysis. These
method in context of Amazon is mentioned below:
Descriptive analytics: It is one of supply chain analysis in which a business can analyse past
performance of their supply chain. It helps them to understand things that happened in past
which allow them to check results are match with objectives and plan of company. It is methods
which is using data mining for purpose of gathering data of supply chain and allow them to
summarise and present it in a manner that provide clear image of desired period of company in
the past.
Predictive analytics: It is another method which allow company to analyse things that happen in
future. In this, managers of company is will develop potential scenarios that will take place in
month or a year. There is no guarantee that things will happened in exact same manner as they

are predicted. In this, company can plan their expectation which allow them to adjust their plan
accordingly.
Supply network analysis: Supply chain network analysis is one of tool which is used by
companies for purpose of design as well as optimisation of supply chain (Derqui, 2020). It
provide assistance to managers for developing a new supply chain, adding to their present supply
chain as well as evaluation of effectiveness for assessing existing supply chain. It is a strategic
planning for building and modelling supply chain that helps to understand cost as well as time
for bring goods and service to market within available resources of organisation.
Amazon Supply chain is a process that starts from warehousing of product to
management of inventory, delivery and pricing. It is optimising different elements in order to
ensure things in smooth as well as efficient manner. In supply chain of Amazon, two component
play important roles that provide success to company like Amazon fulfilment centres, Amazon
Delivery Fleet.
Amazon Fulfilment centres: It has around 112 million of customers who is using prime
membership of company and having advantage of two day shipping, it is using logistics
networks. Company is having more them 175 operating centre which are working in different
countries (How Amazon Supply Chain Works, 2021). It also has around 500 warehouse that allow
them to provide shipping of products on time. In pandemic situation, e-commerce company is
getting opportunities and growth. In this operation of company has also increased due to which it
is hiring more employees. There is increase in sales of company and in order to meet demand of
customer, company is depended on fulfilment centre.
Amazon Delivery Fleet: Amazon is having capacity to store more and more inventory in
order to fulfil order. In order to deliver products of company to their customers, there are
different types of transportation and delivery partners are used by companies that allow them to
meet demand of products. There are different type of truck used by Amazon which can carry
around 2000 boxes from fulfilment centres to sort centrers. Companies is providing delivery of
products and service as per location and speed required.
Supplier relationship strategies:
Supplier relationship management can be described as practice which is used for purpose
of examining vendor of company and allow them to develop strategies for purpose of improving
interaction of company. It is a term which is used by companies in order to ensure good

relationship with supplier which is important for companies in order to get success in market.
Some of strategies used by companies for purpose of ensuring supplier strategy relationship
which are mentioned below:
Segmenting of supplier: It is one of strategy to be adopted by Amazon in order to
maintain good relationship with supplier (Fava, 2019). In this, company can segment their
supplier which allow them to understand which supplier are more important for company. It
helps them to understand important for supplier in short term and helps them to replace these
suppliers.
Treating supplier like partners: It is important for business to understand supplier as
valuable part of business. It is essential for supplier chain leaders and business to consider
supplier as their partners and teammates which allow them to provide strength to relationship of
company. In this, communication play important role in business. Communication allow
company to build good relationship of supplier as business should communicate important
information with them in order to maintain good relationship with them.
Examination of experience of suppliers: It is another strategy to be adopted by
managers of Amazon. In this, focus of company is on understand what it takes to be a supplier of
company (Foroudi, 2020). Positive experience of supplier build good image of company in
market and provide them opportunity to attract more supplier towards them. Amazon is
maintaining good relationship with their suppliers that attract more and more supplier with
company and contributing to making it large organisation.
Technology: Technology play important role in business and allow companies to
complete in global business environment. These technologies allow company to build a strong
network that motivate to productivity as well as accountability in company. It allow company to
review, their order, sending invoice, updating contact details. It allow managers of Amazon to
increase their accountability towards their suppliers relationship and helps them to avoid
misunderstanding. It allow managers to get complete insight of suppliers to business and provide
detailed image of supply chain to company in order to minimise risk.
Analysis of procurement and purchasing theories
Procurement: Procurement is including different elements of purchasing process of company. It
is consist literal of purchasing process of goods, property, service that consist strategic planning.
It is process that create effect on different types of functions of business that require expertise

supply chain management that source raw material meeting of goals of purchase (Glushakova,
Chernikova, and Strekalova, 2020). There are different types of elements to be including in cycle
of procurement including needs of procurement, strategy of procurement, identification of
suppliers, approving request of purchase, negotiation of price, purchasing goods and developing
values of company. There are different typed of procurement process which in context of
Amazon is mentioned below:
Direct procurement: Direct procurement is one which consist purchase of raw goods, wholesale
goods, machinery and other things that contribute for end product of company. There are
different type stakeholders included in direct procurement which are contracted suppliers or
procurement officers.
Indirect procurement: It is another procurement which consist purchasing of goods. It includes
good which does not create direct impact on company and its end product but support day to day
management of business. In a small companies which is using task management in indirect
process of procurement whereas large companies is using facilities management company for
managing purchase.
Service procurement: It is another procurement which involving hiring of temporary staffers,
bringing in short term vendors, leading software in order to work an event.
Engel, Kollet, Blackwell (EKB) Model
It is a model for consumer behaviour that is developed for describing the increasing and
growing knowledge of consumer behaviour, It is a model that consist different stages of
consumer behaviour (Hardy, 2018). These stages in context of Amazon is mentioned below:
Information input stage: In this stage, consumer of Amazon is getting various information from
different sources including marketing and non marketing which create influence over problems
recognition level of decision making process.
Information processing stage: It is another stage in which exposure, perception, retention,
acceptance, attention of information. In this, consumer is exposed to message, interpret that in
order to get it for long term memory.
Decision process stage: It is another stage in which focus on model is on decision process stage.
It is aiming to recognise information, search for information, evaluation of alternatives, purchase
and outcome of situation.

Variable influencing: It is another stage which consist different influence that create impact of
decision making process of consumer, There are different characteristics of individual including
values, lifestyle, values, personality and other things.
Analysis of sustainability objectives and its relation to business level strategy
Sustainability is elated to those concept under which the management of the organisation has
conduct only those activities in their organisation which does not harm the future development as
well as the sacrifice of future (Jiao, Liu, Wu and Xia, 2020). It is one of the most rapidly
growing development concept which is used by many organisation because it become mandatory
for them from the government of the respected country. It recommended to the business
organisations to conduct those activities which promotes the environment and not provide any
harmful impact on the business. Amazon is one of the biggest organisation of the world which
has operated their business activities in many countries of the world. The reason for the success
of the company is their sustainable approach and their effective management. The management
of the organisation has developed many objectives in relation to make the organisation
sustainable (Yamazaki, 2019). The managers of the organisation evaluate the need of
sustainability in the environment and then develop their business strategies according to them.
The brief discussion related to the sustainability objecctives of the organisation are given below;
The climate pledge
One of the most important and major harmful impact of the business organisation on
environment is the increasing level of carbon emission. There are many production activities
taken into consideration in the management of organisation which produces the carbon emission.
Not only the production activity but the organisation uses many transport vehicles for the
delivery of their products from one place to another which creates high level of carbon emission.
This emission are not only harmful for the health of human being but also becomes dangerous
for the natural diversity (Köhler, and Zerfass, 2019). The government of the respected countries
try to minimise the level of carbon by suggesting different measures which the business
organisation has to follow in their business activities. The management of Amazon has followed
suitability approach in their business because they raises concern about the carbon emission.
Amazon is an online shopping company which has provided online shopping of products to their
customers. One of the most biggest activity of the Amazon business is their delivery services
under which the large number of vehicles and executives are employees. These vehicles has

creates huge level of emission in the environment which is very harmful. The management of the
organisation has an objective to becomes net zero carbon by the year 2040. to achieve these
objective the management of the organisation has conduct many activities such as:
 The management of the organisation has an aim to make all their operations on 100%
renewable energy by the year 2025 (Pidun, 2019)). Under this approach all the business
activities are conducted in such as way to produce less carbon emission and also used
green fuel in the process of the production.
 The management of the organisation has ordered 100,000 fully electric vehicles in their
business operation. These vehicles are used in several business activities such as delivery
and transportation. The main reason for the order of these vehicles is that the production
of carbon emission by these vehicles is zero because these are running on electricity not
any fuel. This initiative of the company required huge investment but the balance sheet
of the company has allows them to do so.
Concerned about the deforestation
Deforestation is related to those activity of the business organisation under which the
land of the forest are taken for the set up factory or the industry. All the trees and natural plants
are cutting down to make the place favourable for industry (Schmidt, and Redler, 2018). There
are many harmful impact of this activity as the natural diversity of the area are disturbed such as
many species of animals and natural plants becomes endangered and becomes vulnerable. The
climate becomes impacted as they show unfavourable reflection. Many greenery issues are taken
into consideration and one of the most common issues is natural disasters. It is the duty of the
management to focus on these issues and makes their strategies. The management of Amazon
has raises serious concern about the afforestation and conduct many activities. The brief
discussion related to the same are given below:
 The management of Amazon has plan to invest huge amount of their funds in the concept
of afforestation (Wibowo, 2020). The amount are about 100 million dollars which is used
to deal with issues of deforestation and also many other environmental issues.
 The management of the organisation has plan to plant more and more trees so that the
future forest can be developed. To common this concept, company uses their websites
and applications to motivate the human being to becomes sensitive about these issues.

 The management of company has operated many programmes in their business under
which it arranges the initiative that certain percentage of the product are used to plant
trees.
Sustainability in Amazon's stores
There are large number of stores which the management of the Amazon has operates ion all over
the world. Under these stores large amount of lighting are placed (Siagian, and Perkasa, 2019).
These lighting are very important for the business of the organisation because it makes the
product of the company more attractive and goods looking. The amount of electricity
consumption are very high in these business activities which in result the more production of
electricity. The production of electricity also has use of coal which develops carbon emission. It
is very harmful for the environment so the management of Amazon has uses many modern
solution in this and the brief discussion related to the same are given below:
 The management of organisation has changes all their lighting to the modern LED. This
concept is very effective which is developed to reduce the consumption of electricity by
the traditional lighting concept (Tanriverdi, and Du, 2020). It requires huge investment
because it is very difficult tom make changes in all the stores.
 The management of the organisation has develop effective workforce in their stores
which focuses on the consumption of energy in positive manner and decreases the
wastages.
Recommendations
It is very important for the management of Amazon to focus on different environmental
issues so that the future development cannot be sacrificed. This helps the organisation to
becomes environment friendly which attracts many customers towards the company and also
becomes favourables for the government. It is required to make some recommendation to the
management of the company in relation to the sustainability approach so that the concept
becomes successful and the development of the nation take place. The brief discussion related to
the same are given below;
 It is recommended to the management of Amazon to evaluate the external environment
effectively so that needs of sustainability can be taken out and the management of
organisation can develop effective business strategies in relation to the sustainability. One
of the most popular concept which becomes popular in present scenario is tha usage of

electric vehicles in business activities. This not only helps the company to reduces their
carbon emission but also helps them in their cost advantage. The cost of electricity is
generally less than the cost of fuel. Hike in the prices of fuel is also the great reason for
the promotion of this concept. It is recommended to the management that it develop
effective business relations with different vehicles manufacturing companies so they
acquire the concept in less rates.
 The concept of afforestation are rapidly increasing and the government of the respected
countries develops many rules and regulation to protect their forest from the malpractice
of business environment. It is recommended to the company that it develop vast
framework in their organisation to deal with these issues. This framework are responsible
for the sustainability approach of the company and also to evaluate the rules and
regulations in relation to this so that management can develop their business strategies.
 One of the most important feature and strength of the Amazon is their vast marketing
network. This network of the organisation has enable to become popular in the public and
also the successful. It is recommended to the management of the organisation to use their
marketing framework to promote the idea of sustainability to their customers.
 It is recommended to the management of amazon to develop effective supply chain in
their organisation. The main benefit for the development of this chain is that it enables
the management of organisation to provide their product on right time to their customers.
CONCLUSION
It is clearly conclude from this report that Amazon s one of those organisation of the
world which has focused on the sustainability and makes possible the development of future in
positive manner. It concluded supply chain analysis of company along with company's supply
network as well as supplier relationship management strategies and also procurement and
purchasing of theories of company along with its strategic objectives as well as its relation with
business level strategies. It also concluded recommendations so that the management can
develop their strategies.

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