Amazon's International Expansion Strategies

This essay discusses Amazon's international expansion strategies and steps taken by them to enhance customer satisfaction. Amazon's vision is to be the earth’s most customer centric company and with regards to this vision, organization has made their strategies aligned with the vision.

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Marketing Management

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Amazon is a giant player of e-commerce industry founded in 1994 by Jeff Bezos. He is the
current CEO of the organization and with his unique style of thinking and leadership style; he
has marked its position in the list of top thirty richest men worldwide. Jeff Bezos once dreamt for
selling everything on internet and he started the journey of making his dream true by selling
books over internet from a garage in his home. At that time, Amazon was known as the Cadabra
Inc. but later on in 1995, the name of the company was changed as Amazon and since then, it is
operating in more than 188 countries with more than 12 registered offices in different countries.
Today, the company is known as the largest internet retailer in the world in terms of market
capitalisation and revenue but in terms of sales, organization stands on the second position as the
leading position is acquired by Alibaba Group, a giant internet retailer of China. Apart from the
internet, organization entered acquired Whole Foods Market for $13.4 billion in 2017 and this
led the company to enhance its market presence as brick and mortar retailer. Amazon stands on
the third place as the most valuable company in the United States just after Apple and Microsoft
and at the speed, organization is expanding its functionalities, soon, Amazon will acquire the
leading position in terms of most valuable company in the US as well as in the worldwide market
(Twentify, 2018).
Amazon started its operations from the biggest economy of the world i.e. United States as an
internet retailer. Today, organization is the largest American e-commerce and cloud computing
company based in the Seattle, Washington. Company has established separate retail websites for
United States, Ireland, the United Kingdom, Turkey, Singapore, Japan, China, India, Italy,
Germany, etc. Apart from this, organization also offers international shopping for some countries
for some of their products.
In the global marketplace, Amazon has developed its significant position by continuously
upgrading their products and services to meet their customers’ demands and wants. Apart from
this, organization always believed that innovation and creativity are two major concepts for the
attainment of sustainable growth and overall development. With the help of innovation and
creativity, organization could evolve their existing product range as well as to provide their
customers unique and attractive options to fulfil their needs. This has helped the organization to
retain their customers’ interest within the organization along with developing positive image of
the organization in the customers’ mind-sets (Camhi & Pandolph, 2017).

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Amazon’s vision is to “be the earth’s most customer centric company” and with regards to this
vision, organization has made their strategies aligned with the vision. Along with this,
organization has adopted several measures in order to make their employees’ efforts coordinated
with the organizational vision of fulfilment of customers’ needs and wants. Additionally,
organizational customer centric approach is the most effective approach through which they have
been able to develop positive relations with their customers along with making the organization
sufficient enough to stand on the leading position in the e-commerce industry. With regards to
this, organization has implemented sundry quality checks for the objective of determining the
quality of the products to fulfil customers’ needs and wants.
Amazon’s primary strategy for moving towards global marketplace is GLOCAL. This strategy
states “go global and think local”. With regards to this strategy, organization has been able to
establish its brand image in the global e-commerce industry. Apart from the e-commerce
industry, organization has expanded its operations to various other industries like cloud
computing, consumer electronic industry, online entertainment, web services, and other
merchandise. Along with this, organization has adopted multi-level sales strategy in order to
manage the functionalities in e-commerce industry (Rayapura, 2018).
With regards to the, multi-level sales strategy, organization have started focusing on business-
consumer relationships between organization and the customers and relationship between
business-to-business and suppliers with the objective of satisfying customers’ needs and wants.
Apart from these strategies, organization regularly updates their strategies and policies through
which product and service offering of the organization could be extended along with making it as
per the target audiences’ demands and wants. Along with their e-commerce platform,
organization owns a publishing arm, Amazon publishing (a film and television studio) (Deresky,
2017). Primary functionalities of this studio are to produce consumer electronics like Kindle e-
readers, Fire TV, Fire Tablets as well as the Echo devices. Along with this, organization also
owns one of the largest cloud infrastructure services (IaaS and PaaS) providing company i.e.
Amazon Web Services, a subsidiary of Amazon. Apart from this, organization also sells certain
low-end products under its own brand Amazon basics and this brand is their in-house production
(Panhans & Kaufmann, 2018).

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With the help of huge product and service offering, organization has been able to enter into a
large part of the globe along with making their effective brand positioning. In order to market
conditions, and the impact of external and internal factors, Amazon enters to a new market
through joint venture with a local firm of the same industry. This helps the organization to
analyse the market conditions along with determining the appropriate target customer segments
which could be targeted for the objective of approaching them with appropriate products and
services. Joint venture type of market entry option adopted by Amazon act as the essential
strategy in not only establishing appropriate brand image in the global market but also in terms
of making their products and services relevant as per the customers’ demands and wants (Xu &
Hitt, 2018).
Amazon has developed their image as a dominant leader of e-commerce industry and by
acquiring Whole Foods in 2017, and by initiating Amazon Go, organization has been able to
change the whole retail industry. Amazon initially started their operations as the e-commerce
company and their decision of acquiring Whole Foods was a big move to expand their
functionalities in other industries. Amazon plans to set up their image in the grocery market and
in relation to this, organization acquired Whole Foods to offer their existing, potential and new
customers a unique option to shop grocery and related items through their existing e-commerce
platform. In addition to this, in January 2018, origination launched a new type of retail store in
Seattle as Amazon Go (Akter & Wamba, 2016). This store was set up with a unique idea as there
are no staffs to help the customers in their shopping and customers just need to install Amazon
Go application which will act as their gate pass to enter and exit from the store. This application
is capable enough to manage all the functionalities such as managing the cart of consumers,
billing, etc. With regards to this, consumers are not required to stand in the long ques of billing
because there are lot of payment options offered by the store which could be adopted by the
customers as per their convenience (Turban, et. al., 2017).

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(Source: Twentify.com, 2018)
Jeff Bezos is one of the most reliable, unique and most effective leaders of this era. His unique
leadership style has helped him as well as his company to attain growth and development in the
global marketplace. His decisions are always based on the global consumer behaviour and the
major objective behind this decision is the influence of their customer centric approach and their
vision of being the earth’s most customer centric company. With regards to these strategies,
organization will soon set up Amazon Go in the rest parts of the globe with the objective of
changing grocery shopping experience of the customers. In terms of e-commerce industry,
organization sees vital role of their fulfilment centres in their success in the global market
(Agarwal & Wu, 2015). Amazon Fulfilment Centres act as their own godown where sellers could
store their products and take the benefits of prime. Fulfilment by Amazon (FBA) has a strong
role in the global growth of organization in their fulfilment services for sellers as 40% YoY in
2016. This also acts as an essential factor to draw sellers to its marketplace. This strategy has
been effective in the countries like India and Mexico due to less developed infrastructure. With
their fulfilment centres, organization has provided fast and reliable delivery options to the
customers in these countries and ultimately, this has helped the organization to acquire the
position of market leader (Gregory, Ngo & Karavdic, 2017).

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Amazon’s motive for expansion is the saturation of their home markets i.e. US. In relation to
this, organization is moving towards less developed countries to set up their business and due to
access of internet to the lower classed people have also made them potential customers for the
organization. After attaining success and growth in the Western countries, organization has made
their vision of expanding their operations in the BRIC countries (Brazil, Russia, India and
China). Reason behind focusing towards BRIC countries was the report published by
Mashable.com. They conducted a research in 2014 and found that these four countries are the
fastest growing ecommerce markets in the globe (Bianchi & Mathews, 2016).
(Source: Forbes.com, 2018)
According to the above figure, organization have made entered into these countries and they
have much focused towards Indian market in comparison to other countries. India is one of the
largest customer segment market and smartphone and internet penetration is continuously
increasing over there. This has enabled opportunities for the organization to establish their
leading and effective brand image in the global market (Cavusgil, et. al., 2014). With regards to
this, organization adopted following strategies in order to expand their operations in the
international marketplace:
Meeting customers’ needs: Although, penetration of internet in the Indian market is very low
and Amazon is an online retailer, thus, they have partnered with various local stores. Along with

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this, organization comes up with offers and promotions to establish an effective position in the
customers’ mind-sets. Organization has adopted several advertisement and promotional
strategies to grab customers’ interest towards organization (Bohari, Hin & Fuad, 2017).
Payment options: With the objective of making organization an appropriate option for the
domestic customers, organization has offered huge product and serving range along with
different payment options. In this manner, organization builds up relationship with the domestic
customers as well as in terms of enhancing their sales, revenues, and customer satisfaction (Awa,
Ojiabo & Emecheta, 2015).
Identifying customer’s needs: For better customer satisfaction, it is required to provide the
same products and services which are useful for them. In relation to this, organizational primary
international expansion strategy, GLOCAL has helped the organization to enhance customer
satisfaction.
Apart from these strategies, organization have adopted the way of promotion and advertisement
to set up their international presence along with generating curiosity and demand for the products
and services offered by the organization. In relation to this, organization have recently
introduced Amazon Alexa which is a smart piece influenced with artificial intelligence. Alexa
has been introduced in terms of smart speakers as Echo and Echo Dot. These devices are capable
enough to handle various operations on the behalf of their owners such as making to-do-list,
scheduling appointments for the day, making calls, giving weather, traffic and other relevant
updates, playing music, videos from different sources, etc. In short, the device is capable enough
to act as an artificial assistant and this product was initially introduced in the US but till the
October 2018, Alexa was launched in 40 countries in the world and by the end of this year, it
will be launched in Italy, Spain and some other countries along with their local languages in
order to make the device useful for them (Shenkar, Luo & Chi, 2014).
Thus, it could be said that Amazon has a wide set of effective strategies in terms of expanding
their business in the international market. Along with this, organization believes in innovation
and creativity in terms of making their products and service offering unique enough to fulfil
customers’ demands and wants. In this essay, organizational international expansion strategies

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have been discussed along with the steps taken by them to enhance customer satisfaction
(Guercini & Runfola, 2015).

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