Successes and Failures of Growth Strategies Adopted by Amazon: A Case Study

This case study explores the successes and failures of growth strategies adopted by Amazon, including Amazon Prime, Amazon Web Service, Kindle, and more. It also examines the reasons behind these successes and failures, and provides recommendations for future growth.

MANAGEMENT
RESEARCH

Table of Contents
EXECUTIVE SUMMARY.............................................................................................................3
INTRODUCTION...........................................................................................................................4
KEY ANALYSIS.............................................................................................................................6
NEW RECOMMENDATIONS AND CONCLUSION................................................................11
RECOMMENDATIONS..........................................................................................................11
CONCLUSION.........................................................................................................................11
REFERENCES..............................................................................................................................13
Books and Journals...................................................................................................................13
Online sources...........................................................................................................................13

EXECUTIVE SUMMARY
In the current research project, data about different strategies adopted by Amazon is
taken. It has included several significant strategies that helped business to grow such as Amazon
Prime, Amazon Web Service, Kindle etc. This has also involved several strategies that have
backfired the company and did not help in grabbing attention of existing as well as potential
customers. This has also included the different evolutions that made by Amazon to develop and
improve their whole business.

INTRODUCTION
The case study organisation for the present report is Amazon. The company as ubiquitous
and large as Amazon is today, it is quite tough to remember that it incorporated in a garage. Jeff
Bezos and first few number of employees packed books and bought them to the post office by
themselves in those days (Pandis, 2021). Even after the organisation had made warehouses for
storing inventory, forming it a organisation with real assets and real revenue, many investors had
written Amazon off as the other dot-com fever dream, destined to be wiped out by Borders and
Barnes & Noble. But with the time, in the year 2011 Borders had been filed for bankruptcy
protection and had closed many stores. Meanwhile, the company Amazon moved towards every
imaginable kind of media, service and product. According to eMarketer by 2018 Amazon had
taken half of online retail sales and decreased the business of physical retail business.
Amazon has evolved greatly due to their great operations, strength and new ideas. Some
of the major events that assisted in explaining rapid evaluation of Amazon include: the year 1994
is known as born year of Amazon as they started online book store and financed the organisation
with $10,000. In 1997, Amazon went public at $18 per share and given it a valuation of total
$300 million. In 1998, Amazon had expanded its whole offerings and started selling DVDs and
CDs. In 1999, the company came with 1 click payment and prompted customers to purchase
more. It had launched marketplace for 3rd party seller and it has sparked the volume of
transactions. The Time Magazine named Jeff Bezos as Bezos Person of the Year. In 2002, the
company had started selling clothing and made partnership with 400 apparel brands. In 2003, it
has generated extra income by licensing platform to other sites of e-commerce such as
Target.com and Borders.com. From this year, Amazon has come up with new things each year
such as it has entered China, Prime debuts, Kindle went on sale, announced new headquarters in
Seattle, acquired audiobooks, acquired Zappos, acquired robotics organisation Kiva Systems,
started delivery packaging on Sundays, unveiled first and last smartphone, acquired Whole
Foods, reached $1 trillion market cap, raised minimum wage, sales and profits of Amazon surged
during global pandemic (Chadwick and Asner, 2018).
Amazon is known as an American multinational technology organisation which majorly
focuses on cloud computing, artificial intelligence and e-commerce. It is popularly known as
under Big Five Companies in the United State information technology industry with Meta,
Google, Microsoft and Apple. The current CEO is Andy Jassy and founder is Jeff Bezos.

Amazon is known as the leading e-retailer in U.S. It has net amounting 386 billion in U.S.
Dollars. The competitors of this company are: Walmart, eBay, Apple, The Home Depot and
many more. Some of the future trends for Amazon will be more experiments with virtual
experiences and live video, advertising would accelerate, slow down its label brand expansion
and many more (Arnett, Goldfinch and Chinta, 2018).
Aim of the research
 To identify the successes and failures of growth strategies adopted by organisation with
the vision of most customer centric company. A study on Amazon
Objective of the research
 To determine the different reasons of growth strategy's failures and successes within
Amazon.
The above mentioned aim and objective is quite significant for the current because it
focuses on finding out the reason behind the success of Amazon company. The main focus of the
project is to find out the relevancy of growth strategies that have assisted to become one of the
biggest organisations in the whole world.

KEY ANALYSIS
1. Critique of the case study
The selected organisation Amazon is one of the best companies in the whole world
because it focused on attracting large number of customers and expanded business operations in
different sectors. In 2017, shares of Amazon traded above $1,000 and this has surpassed the
share prices of Google parent Alphabet. The company incorporated as an online book store and
attained uninterrupted growth and success by becoming the largest online book store, a media
organisation, the largest internet marketplace and the most successful Information Technology
service provider. Recently, Amazon expanded its business into the bricks-and-mortar retail
business and it has launched Amazon Books across the United States. The company Amazon has
ranked the world's most innovative organisation and the fourth largest organisation by market
capitalisation. The case has explored path of Amazon to growth and its failures and successes
along the way. The various successful strategic moves involve Prime, Amazon Web Services,
Kindle and Amazon Marketplace. There are also various failures that include; A9 Search Engine,
the Fire Phone, Auctions and Endless. The case study also covers the ways adopted by them with
the purpose of overcoming the failures faced by them due to adopting new growth strategies. For
developing failures and successes of Amazon growth strategies is an extensive procedure and
determine the loopholes that are effecting the overall profitability or performance of the
organisation. It provides the particular insights to the management in looking and understanding
at the several factors that have been hidden from the sight of management (Sadq, Sabir and
Saeed, 2018).
The project has conducted to determine differences and commonalities among them. The
case has also showed the consequences and causes of Amazon at-once stellar performance and
severe challenges. The company applies concept of Blue Ocean Strategy for analysing logic of
market-creating with the motive of future growth. For accomplishing purpose of taking out piece
of information, secondary sources have been used. Secondary research is one of the greatest
methods for accumulating second-hand data as this assists in attaining defined aim and
objectives. The secondary sources help in taking assistance of books, articles, journals,
newspapers etc. These sources have helped in taking out new piece of information about the
topic as it covers the current trends and strategies adopted by the company for grabbing attention

of large number of customers. The secondary sources have given foundation for initiating the
current project because it already has great piece of information that is already published.
2. Revising case study for achieving defined aim and objectives
The present case aims at understanding the root of a growth and high performance of an
organisation. An organisation, in this case study Amazon, forms a stages of strategic moves with
the motive of growth. Some of these strategic moves highly contributed to growth and market
dominance of Amazon but some has caused serious setbacks for Amazon to experience. The case
focuses on analysing the strategic moves and discern out significant differences and
commonalities between the two, focusing to form the learning points. There is no excellent
organisation-it could be brilliant at one time and wrong-headed at the other. Amazon had created
a stages of new markets by multifaceted organisation offerings from online retailing to
Information Technology and media services. Strategic moves captured and opened new market
space other than using existing markets. By considering on delivering value to purchasers,
Amazon had made a important leap in great demand and attained high growth. Furthermore, it
ultimately decreased the structure of cost as a mass of purchasers dealt and were locked-in by
unprecedented utility of Amazon. Amazon had jumped into various attractive industries and
investing resources and capabilities for bringing great competition. These certain strategic moves
helped in red ocean traps, focussed on providing increased value and decreased cost than the
competitors and rivals but they were not importantly bought in by consumers. Essential
difference between success and failure of Amazon could be easily found in the presence of
innovation. The company Amazon has attained high growth irrespective of industry's condition
when they formed a new method that gave a new value-cost frontier by a step change in the type
and degree of value provided (Boucher and Chi, 2018). Therefore, making a new market and
creating competition irreparable. Contradictory to this, Amazon had failed when it majorly
concentrated on delivering novelty technology without purchaser value or exercised cost
leadership in respect of beating high-performing functionary.
Amazon incorporated as an internet book store in the garage of the founder Jeff Bezos in
the year of 1995. In that time, internet shopping, internet shopping was not a thing as it was at
infancy stage. Internet Explorer and Netscape had just been introduced and executed and there
were very less number of e-commerce start-ups. The aim of Amazon was to become the Earth's
biggest book store and the company had challenged many established brick-and-mortar book

stores such as Barnes & Noble and Borders, explaining the online shopping's convenience,
discounted price range, broad selection and great customer service. Amazon made the website
very attractive, entertaining and informative so that attention of customers could be grabbed and
net surfers can easily browse as they will in local book stores in free time. In the past some years,
Amazon has seen great and aggressive success and growth, expanded beyond its core business
i.e. online book selling (Chan Kim, 2017). After this Amazon did not stop and continued to work
beyond transforming industries as wide as publishing, Information Technology and media
services, online retailing and business models. With the main motive of growing fast and big,
Amazon formed various crucial strategic moves that give outcome of sustainable growth as well
as many challenges or setbacks. Some of the successful strategic moves of Amazon are: Amazon
Marketplace, Amazon Prime, Amazon Web Service, Kindle. These strategies are explained
below in detail manner.
Success strategic moves of Amazon Amazon Marketplace (2000): With the success of online book store, Amazon has seen
great success and now defined as everything store. It has expanded different ranges of
retail goods and products and getting several kinds of organisations. The organisation
followed an unconventional approach for growth i.e. sharing e-commerce platform of
Amazon.com to all its competitors who could easily sell their goods by its great traffic
website providing enriched customer experience, involving good functionality and search
and quite easy checkout. The marketplace of Amazon had been launched for third parties
so that they can sell their goods on Amazon.com. With the assistance of decided monthly
subscription fee vendors can access wide customer base of Amazon to promote their
goods and take advantage of great shopping infrastructure like one-click shopping. Amazon Prime (2005): The greatest strategic move is Amazon Prime. For online
shoppers and retailers, shipping is explained as an unavoidable cost. Free shipping is
provided to customers through a coupon or promo code or bought over particular amount
needed. Amazon made efforts for decreasing shipping and lower cost by forming more
fulfilment centres, developing great warehousing software, streamlining logistics and
many more. Amazon given more services to Prime membership- instant video that
consumers can access Netflix Prime Music, Prime Photo, Prime Drive etc. Prime became

core service of Amazon because it has assisted in strong customer relationship and
sustainable business model.
 Amazon Web Service (2006): Amazon has concentrated on delivering enriched customer
experience and cost savings by staying efficient and lean. Despite its great growth, it has
experienced huge seethed and inefficiencies with frustration to build applications for
good customer service and better operational efficiency. Amazon took on an entangled,
unorganised development platforms and form decentralised appropriate infrastructure,
where developers can create Information Technology solutions more effectively
considering well documented suites of API (Sherman, 2021). The company brought
benefits of cloud computing into IaaS and built a scalable, appropriate, reliable and cost-
effective Information Technology infrastructures like networks, storage and servers for
offering engineers and developers in the type of web-based services. Most significantly,
the company Amazon saw Information Technology as an important utility such as
electricity and borrowed the utility pricing model. The company Amazon has introduced
two remarkable products that are: Elastic Compute Cloud and Simple Storage Service.
This enables organisations to access and store unlimited amounts of information and also
allow organisation to easily rent virtual computers for running own computer
applications. AWS has assisted in serving over more than 1 million active customers in
almost 190 countries involving education institutions, non-profit organisations,
government agencies and start-ups. It has assisted in growing and gaining market
dominance as revenue was greater in comparison to other major competitors.
Failed Strategic Moves of Amazon
There are certain strategic moves adopted by Amazon with the purpose of growth but
these strategies did not help in gaining any success but created many downfalls for the company.
Some of the failed strategic moves of Amazon are defined in detailed way. Amazon Auctions (1999 before November 2004): In 1995, Amazon had launched books
in 1995. It has gradually expanded its series of products, selling videos and music as of
1998 and video games and toys and consumer electronics as of 1999. In the year 1999, it
had made announcement for launching Amazon Auctions. 8 million users of Amazon
were pre-registered for selling, buying and bidding. With great amount of investment of
$25 million, Amazon Auctions had seen to grow fast but it was not enough for reaching a

crucial mass of sellers and buyers for enjoying a network effect like eBay as it has great
position in Auctions (Chan Kim, 2017). Existing buyers and sellers have not found
enough attracting and useful utility for enjoying a network effect like eBay. Endless.com (2006-2012): With an online book store in 1995, Amazon has become
leading online retailer with great amount of revenue from a broad series of categories. It
has added accessories and apparel categories and also the shoe section but this did not
assist in generating sizeable revenues. The main challenge for Amazon was that it was
tough for navigating and searching fashion items like shoes on Amazon.com was
optimised for goods searches like electronic appliances and books. Online shoppers
generally filtered by many variables like size, price, material and colour but the company
Amazon did not offer the similar shopping experience.
 Fire Phone (2014-2015): In the year 2010, Amazon had launched Tyto- it is known as
first smartphone project for competing with the fast growing and developing smartphone
market accomplished by the iPhone in the year 2007. The number of smartphones users
had reached 1.6 billion and sales of whole smartphones as a percent of whole mobile
devices. Mobile businesses have become more significant than ever as smartphones have
become more indispensable. In the fear of missing the greatest opportunity, Amazon
needed its own hardware. Jeff Bezos required a mobile phone that will lead users to its
online store more often, frequently and directly. Amazon aimed to attract customers with
something distinctive and big so they will buy Amazon devices instead of iPhones. The
Fire Phone has flopped miserably because it did not assist in adding any meaningful
value to the experience of smartphones (Chan Kim, 2017). One of the developers who
developed the dynamic perspective said that they poured great amount of money yet they
did not get any result as they were unable to attract large number of customers. The Fire
Phone had focussed on quite worthless features as it was poorly supported by own
application store. It worked on Fire Operating System which is the altered version of
Android OS, in which third parties developer must have participated to build large group
of available applications like Google's Play and Apple's App Store.

NEW RECOMMENDATIONS AND CONCLUSION
RECOMMENDATIONS
From the above compiled piece of information, there are certain recommendations that
are provided to Amazon for improving their whole business in a better manner. Some of the
suggestions are given below in detailed manner:
 When customers research about any product, the generally look for feedbacks and
reviews from every available trusted source which may include industry leaders, social
media influencers and even celebrities who consumer the product. The company should
approach large number of influencers for showcasing their products to large number of
customers. It is determined that now large number of customers highly dependent upon
the products used by their favourite influencers. This is the greatest way for increasing
sales on Amazon and to connect with large number of consumers. The company should
connect with influencers on various social media channels because this is direct way to
reach out the large number of customers.
 The other greatest method that should be adopted by Amazon is creating a good
purchasing experience for customers. It is the greatest method to stand out in the
presence of multiple number of competitors. There are certain things that can be adopted
by Amazon for building their reputation and attracting people for buying from them
rather than competitor's company. The company should become more transparent in
regards to their quality of goods such as procedure of manufacturing, return and
shopping policies and many more. Amazon should assist people understand about the
company and the reason of existing business. The organisation should share stories about
partners, products, manufacturing procedure, employees and many more for building
trust and excitement with target and potential number of customers.
CONCLUSION
From the above assembled data, it is concluded that the company has developed large
number of strategies with the motive of growth and development. There are many strategies of
growth that led company to grow but in some cases they do not give predicted results. In the
current research project, different kinds of growth strategies are explained in manner that has
assisted organisation to grow and all those strategies are also given which have failed and made

business to loss. There are many reasons that led business to face difficulties and the primary one
is unable to attract large number of customers. Hence, it is determined that the strategies of
companies do not succeed when they are unable to satisfy their significant stakeholders.

REFERENCES
Books and Journals
Arnett, J., Goldfinch, B. and Chinta, R., 2018. Multi-dimensional nature of innovation at
Amazon. International Journal of Business Innovation and Research, 15(1), pp.1-13.
Boucher, D. and Chi, D., 2018. Amazon deforestation in Brazil: What has not happened and how
the global media covered it. Tropical Conservation Science, 11, p.1940082918794325.
Chadwick, K.D. and Asner, G.P., 2018. Landscape evolution and nutrient rejuvenation reflected
in Amazon forest canopy chemistry. Ecology letters, 21(7), pp.978-988.
Pandis, I., 2021. The evolution of Amazon redshift. Proceedings of the VLDB
Endowment, 14(12), pp.3162-3174.
Sadq, Z.M., Sabir, H.N. and Saeed, V.S.H., 2018. Analyzing the Amazon success
strategies. Journal of process management. New Technologies, 6(4).
Online sources
Sherman, I.,2021. Amazon's extraordinary evolution. [Online]. Available Through:
<https://https://edition.cnn.com/interactive/2018/10/business/amazon-history-timeline/
index.html//>
Chan Kim, W.,2017. Successes and Failures of Amazon's Growth Strategies: Consequences and
Causes. [Online]. Available Through: <https://publishing.insead.edu/case/successes-and-failures-
amazons-growth-strategies-causes-and-consequences/>