Strategic Management of Amazon: Business Case, SWOT Analysis, and Innovation

This report explores the strategic management of Amazon, focusing on its business case, SWOT analysis, and innovation. It discusses the challenges faced by Amazon at national and global levels and examines its strategic plan for pursuing competitive advantage. The report also includes a critical evaluation of Amazon's performance, highlighting its competitive strengths, market position, and areas for improvement across the value chain.

Strategic Management

Table of Contents
ASSESSMENT - I...........................................................................................................................1
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
Business Case.........................................................................................................................1
SWOT analysis.......................................................................................................................2
Issues and challenges faced by Amazon at national and global level....................................4
Innovation, internal and external environment and influence................................................5
CONCLUSION................................................................................................................................6
ASSESSMENT – 2..........................................................................................................................7
INTRODUCTION...........................................................................................................................7
Critically evaluate the performance of Amazon highlighting competitive strengths, market
position and areas where improvement across the value chain may be required...................7
Discuss the strategic plan for the Amazon using appropriate tools to explain the company’s
pursuit of competitive advantage............................................................................................8
PEST analysis.........................................................................................................................9
Porter’s five force model......................................................................................................10
Reflection.............................................................................................................................11
CONCLUSION..............................................................................................................................12
References:.....................................................................................................................................13
Books and Journals...............................................................................................................13

ASSESSMENT - I
INTRODUCTION
Strategic management is one of the major processes that your organisation used in order to
control the utilisation of resources and also achieve the predefined objectives and the goals of the
company globally. Strategic management in an organisation is the practice of gaining and
maintaining the competitive advantage (Velikorossov and et. al., 2020). The present report is on
strategic management in context of "Amazon" a multinational online shopping retail company
that operates globally. The company is the one of the famous leading online shopping retail
organisation that provides the customers with various kinds of products of different brands
within different prices. Amazon is the highly technological advanced American company which
is popular for its supply and logistic networks worldwide. The report will outline business case
of the organisation and to understand the strengths and weaknesses geographically the SWOT
analysis is conducted in the report. Following report will also discuss the various challenges and
issues faced by the company at national and global level. At last the report will talk about the
innovation, internal and external environment and its influence on the dynamics of the
organisation positively or negatively.
MAIN BODY
Business Case
Company overview
Amazon.com most famous multinational technology company based in Seattle
Washington. Amazon is the American leading online shopping retail organisation which focuses
on digital streaming e-commerce artificial intelligence and cloud computing. The founder of
Amazon Jeff Bezos started the company in July 5th 1994. Company was first started as the
online book retailer and later expanded its products and services in the various different
industries. Amazon is known as the largest internet computing Platform Company in terms of
revenue all around the globe. The company products include clothing, electronics, footwear,
cosmetics, video games, food, toys, jewellery etc. in its e - commerce business. Company also
distributes the online videos music and audio books through the Amazon music and prime video
service. The company has hierarchical industries structure to conduct its business smoothly.
Vision and mission
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The vision of Amazon is to become most customer oriented e- Commerce Company where the
customers can acquire anything wants to buy online.
The mission of the company is to offer the customers the lowest possible prices and the best
available choices with greater satisfaction and convenience.
Current strategies
The current strategies of the Amazon focus over the innovation, technology and the strategies
that help the company in growing to the heights (Barbosa, Castañeda-Ayarza and Ferreira, 2020).
 One of the best strategy that Amazon adopted is to bring the drone delivery service, the
company invested large amount of its money in research and development of new
delivery system for the future in order to maintain the safety and security of the citizens.
 The Alexa everywhere strategy of the Amazon was mind blowing in order to create the
competitive advantage was the innovation of Amazon Alexa using the machine learning
and artificial intelligence with this Amazon was able to be highly profited.
 The product differentiation strategy of the Amazon has really benefited the company in
finding the different ways preserve their customers mind also to bring loyalty among the
customers. The strategy created brand positioning.
 Sustainability is the best strategy that Amazon is currently using by which companies
able to meet the environment and ethics concerned customers.
SWOT analysis
Strengths Weaknesses
Strong brand image- Amazon is the giants
of The E-Commerce industry all around the
globe the company has a strong brand name
with a strong market position worldwide.
Superior logistics and distribution system:
Amazon is well known for its highly
effective and efficient logistic and the
distribution channels and system. The
company has fast, secure and reliable
delivery system of the goods and products
to the customers thereby also implemented a
Employees strike: the major weakness
highly observable by the rival companies all
over the globe is strike of the employees of
the Amazon that puts the Amazon
operations to the halt (Wang and et. al.,
2020). The strike was due to the obligation
of the employees for the unsafe working
conditions.
Easy imitable business model: the online
retail business has become quite common in
this digital world therefore it is very easy
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strategy of fixed rates for the specified
delivery time periods.
Innovation: innovation is the biggest
strength of the Amazon as it always comes
up with the creative and innovative ideas in
its product line as well as in its packaging
and delivery services also in the marketing
and advertisement. The company's
innovation of the drone delivery service has
provided a company a major strength.
for the other rival companies to copy the
business model of Amazon. Some of the
organisation likes eBay, Netflix, Myntra
etc. are giving a company tough
competition.
Quality focus: by focusing over the ease of
buying delivery speed optimisation in the
product search other Amazon platforms
Amazon is not able to recognise the
complaints regarding the quality of products
sold over the Amazon website. Which night
shift the focus of the customers towards
other reliable E-Commerce business.
Opportunities Threats
Market penetration: the biggest opportunity
that Amazon can gain is a penetrating
expanding its business operations in the
developing markets of the country which
can also be done by opening the physical
stores which can improve the
competitiveness against the other retail
business (Ongaro and et. al., 2021).
Cloud computing: which capitalisation in
cloud computing trend the company can
search with the Microsoft and Google which
are the major players of the cloud service
providers. As with the covid-19 has
contributed cloud computing opportunity for
the organisation.
Aggressive competition: The high level of
competition in the various markets of the
different countries is the biggest threat to
the Amazon. Companies like Walmart,
eBay are giving neck to neck competition
for Amazon bringing the tough times in the
future.
Economic recession: due to the current
pandemic the online delivery was
completely switched off by the government
of the different countries that was
completely made the business of Amazon
shut down. Due to which there is an
economic recession and the various
countries but Amazon is not that much
immune to face economic recession. If the
economic conditions become more was then
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and it can create an adverse impact over the
sales and the revenue of the Amazon.
Issues and challenges faced by Amazon at national and global level
Amazon is a leading online retail organisation from past many years and is completely customer
oriented. From last 20 years Amazon has completely changed the history of global retail market
place. The company is facing many challenges and issues at the national and global level some
of which are discussed below:
International performance: the company is facing a great risk and challenges in operating the
business internationally. Company is facing the major downfall in the international activities in
significance of the revenues and profits. In some of the international market segments the
company has very little operating experience which may not recognised as the benefit from the
first market advantage. To which the company's international operations are facing the problem
of profitability and sustaining. Company is facing a challenge in establishing and maintaining the
international operations and the stores also in promoting the brand internationally due to its
heavy cost (Knight and et. al., 2020).
Intense competition: another biggest challenge in the rapidly evolving e commerce business that
is faced by Amazon is the highly intensive competition with the rival companies like Walmart,
eBay etc. The company has the competitors all around the globe in the various different
geographical areas including the cross-border competition among the various different industries
which includes physical retail stores, E-Commerce, Omni channel retailers, E-Commerce
services, web and infrastructure computing services, digital content, advertising and logistic
services. Competition is increasing intensively day by day which includes the development of
new Business models and also the entry of the new well established and well funded competitors.
Moreover the new and enhanced technologies in the web and digital media have also increased
the competition for the Amazon’s digital media services like prime, Amazon music. As a result
the company might reduce its sales and profits because competition is not making the products
and services offered by the company successful (Wenzel, Stanske and Lieberman, 2020).
Antitrust matters: Amazon is facing in antitrust investigation in the recent year, however
Amazon could extend beyond its marketplace where it is Chris criticized by the lawmakers and
the other regulators for the unfair double role of managing the marketplace and competing with
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their third party sellers. FTC is trying to find out the lead on the antitrust probe of Amazon
looking into the Amazon Web service to analyse whether it is ethical and stable for the cloud
computing service or unfairly harming its competitors mainly the small software firms.
Innovation, internal and external environment and influence
Every organisation whether it is a retailer, non-profit, online, government agency must
implement the innovation in its organisation as growth of global business, economic
sustainability and the market position and growth totally depends on the innovation within an
organisation. Amazon is highly popular for its innovation in the logistic and the technological
services. Basically innovation is a modification or a development of a new product or a process
which is mainly done by adopting the latest technology and the trend. Another term interlinked
with the innovation within the business environment is strategic innovation which has become
the core part of organisation in order to adopt the changing circumstances and the situations
which helps in managing and sustaining the changes (Bailey, Pitelis and Tomlinson, 2020). In
today's competitive world the strategic innovation and innovation is the game changer for the
business as it benefits the organisation in improving their speed in the market and also enables
the organisation to deliver superior customer experience with greatest satisfaction and increased
profitability.
Some of internal and external environmental factors in context of Amazon to recognise how
they influence in driving the innovation in the industry of e-commerce business are discussed
below:
Technological factors: the technological factors are major players behind the innovation in the
Amazon. The company strongly focuses over the various strategic applications of the internet
technology in order to enhance the customer relationship as well as required the customer
loyalty. Rapid changes in the technology and the latest version of technology the company is
pushed towards pursuing the innovation that leads to the competitive advantage (Svatosova,
2020). Using the technology the company created the innovation of a drone delivery system
which offer the personalized delivery services and confirm the orders at the real-time they were
creating the value to the organisation. Technological factors of the Amazon have the most
positive influence on the changing dynamics of the organisation in order to gain the profitability
and prosperity. Therefore the technological factors describe the higher rate of technological
innovation and development in the Amazon which creates a positive influence in The E-
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Commerce industry. With the digital technology company focuses on innovation over the
distribution, manufacturing and the logistic department also. Hence, Amazon is the highly
innovative company in terms of technological factors.
Corporate social responsibility: Corporate social responsibility is one of the internal
environmental factors of the Amazon that plays a major role in driving the innovation in industry
so that company can make sure there is the sustainable growth and development within the
organisation thereby maintaining the strategic innovation that is beneficial for the employees as
well as customers (Aydın, Nyadera and Önder, 2020). They are the main legal laws for the
corporate social responsibility by the US federal trade commission that restrict the Amazon from
conducting any misleading discounts or claims that help the company in innovating the new
business strategies which can directly impact over the business operations thereby leading to the
success. The Amazon’s environmental sustainability program launched as one of the major CSR
program stated that the company will achieve net zero annual carbon emission in upcoming years
by innovating and developing the products that supports and sustain low-carbon economy.
CONCLUSION
It is concluded from the above report that every organisation must implementing strategic
management process in order to provide their customers a better experience which will help the
company in achieving their goals and objectives. Hence, it is proved that technology and CSR is
also a driving force towards the innovation and also creates the positive influence on the business
dynamics in the E-Commerce industry by promoting the sustainability and environment friendly
e- commerce business thereby creating competitive advantage.
ASSESSMENT – 2
INTRODUCTION
Strategic management is not only about the managing the strategies of the organisation
rather it is a broad area to cover which requires a continuous improvement in the planning and
monitoring process of the organisation so that the company can make sure that the organisation
is achieving its goals and objectives. The following report on Amazon One of the largest online e
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commerce website that sells diverse variety of products and services. Foot contains a critical
evaluation of the performance of the Amazon by highlighting its competitive strengths market
positions and the area of improvement under the value chain using the value chain analysis.
Further in the report there is the strategic plan of the Amazon in order to pursue the competitive
advantage which is conducted using the pest analysis and the porters five force model for the
competitive advantage. At last in the report there is reflection of what skills learnt during the
strategic management module and what necessary steps and strategies an organisation should
develop in order to achieve its goals and objectives effectively and efficiently.
Critically evaluate the performance of Amazon highlighting competitive strengths, market
position and areas where improvement across the value chain may be required
Competitive strengths
 Go global and act local strategy: the strategy of Amazon provides the greatest benefit to
the business operations of the Amazon why create in a competitive advantage in the
market full of competitor’s. The company made the partnership with the local suppliers
for the local supply chains and backward integration help the company in creating the
competitive advantage (Fuchs and et. al., 2020). With the company's strategic product
placement according to the needs and requirements of the local customers and also with
country's culture help the company in outstanding at top from their rival companies.
 Superior logistics and distribution systems: Amazon is a multinational online E-
Commerce business organisation which has largest merchandise collection for which
company has highly effective and efficient logistics and distribution system which
insurance fastest delivery of the goods and services on the door step of the customers all
around the globe which is highly reliable and secure too. Due to which the Amazon prime
program was the great success which was only possible due to the Amazon network of
the warehouses (Ojha, Patel and Sridharan, 2020). This is the biggest competitive
advantage of the Amazon.
Market position
Amazon.com is the multinational E-Commerce company which offers the online retail,
computing service, consumer electronics, media and music service, Amazon web service etc.
Strong market position in all over the world recently the company has 386 billion US dollars net
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sale in 2020. Most of the revenue generated with the retail sales a products and other is with the
third-party seller revenues, subscription service and AWS activities.
Value chain analysis and areas of improvement across the value chain
Value chain analysis is one of the strategic management analytical framework that helps the
business organisation and identifying the key areas that are required to be developed in order to
create the value among the customers and their by creating the competitive advantage to the
business (Barney, 2020).
Value chain analysis of the Amazon on the basis of the principle that will help the
organisation to create the value for the existing customer base has helped us analyse the various
key areas that are required to be developed in the Amazon in order to create the competitive
advantage.
Exceptional customer service plays major role as a source of value creation in the online e-
commerce and cloud computing companies like Amazon. As per the value analysis of the
Amazon provides the excellent customer service because they know the techniques and strategies
to make their customer happy with their marketing and selling skills. Area under value chain
which Amazon is required to develop across the value chain is the quality of products and the
products that are flopped. Growing focus completely towards their inbound and outbound
logistics services the company has been neglecting the quality of the products they are serving to
the customers which is which is not meeting the customer satisfaction level thereby reducing the
sales of the company as well is the reputation and value of the company (Nadikattu, 2020).
Therefore company should focus on other areas too.
Discuss the strategic plan for the Amazon using appropriate tools to explain the company’s
pursuit of competitive advantage
Amazon is the American multinational organisation which is considered as the leading
brands in the online retail stores by offering more than 500 million products on its website or
mobile application. The company has achieved the great amount of success in the last 20 years
since the company is considered as the top 3rd leading organisation in the Forbes and is at its
peak then certainly there are some issues and hurdles in the way of the success of the
organisation (Quarm and Busharads, 2020). Therefore a strategic management proposal using
PEST analysis and porter’s five force model is developed for the Amazon in order to analyse the
internal and external factors that are hindering the growth of the company for which the correct
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strategy will help in making the action plan that will help in mitigating the issues and pursuit
competitive advantage
PEST analysis
 Political factors: Political factors represent the issues or opportunities that are related to
the government or international Government relations the factors provide the pros and
cons to the Amazon. Government efforts in improvising the cyber security is opportunity
to Amazon to focus on cloud computing and Amazon Web service network and to make
it more safe and secure for the customers which will help the in building the trust of the
customers by sharing their details regarding the credit cards or any other personal
information (Alassaf and et. al., 2020). The tax exemption of the Government of USA is
a major opportunity for the Amazon to create more employment opportunity for the
citizens as according to USA government e- commerce website don't have to pay tax or
will be paying fewer taxes if they do not have any physical Store. Political disruptions
between the various countries where the Amazon operates can lead to the disruption in
the supply chain resulting in the major downfall in the sales which is a great threat and
weakness for the Amazon as it hampers the business profitability and productivity.
 Economic factors: high disposable income of the citizens of the developing countries is
the major opportunity for the Amazon as countries citizens are more interested in
exploring the new products which gives chance to the Amazon to increase its sales. The
major increase in the foods e commerce business is there a possibility for the Amazon to
create a grocery with various product line of grocery. But the competitors like Wal-Mart
a well established inserts business that can lead to the prices dropping strategy of
Amazon thereby decreasing the share prices of the Amazon. Foreign Currency fluctuation
is also major economic threat to the Amazon as the company operates globally (Sheth,
Jain and Ambika, 2020). Social factors: The society is now becoming more attracted towards the online shopping
websites which is the major opportunity for the Amazon as increasing consumerism
increases the profitability and the sales of the organisation. The intensive competition in
the society related to the E-Commerce business has made the consumers become more
aware about comparing the prices and the products of the different E-Commerce sites
before buying their products this change in the buying habits of the consumer has
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increased the threat to the Amazon in reducing its price to attract the consumers (Phan,
2021). Increasing high speed of internet on the updated technology is grabbing the minds
of the customers which are the opportunity for the Amazon in boosting its market through
internet and other Amazon media services.
 Technological factors: Technological factors create both challenges and opportunities
for the Amazon. As rapidly updating technology leads to the innovation in the
organisation which is the major opportunity for the company to gain the attention of the
customers towards the website thereby increasing brand image. The latest information
technology has provided the opportunity to Amazon to make its website or the online E-
Commerce platform more user-friendly for the consumers as this will build the trust
among the customers towards website has it making it more secure and also attract the
customers due to the ease of understanding. The major challenge with the technology is
increasing cyber crimes which are the major threat to the Amazon as there is risk of
hacking for stealing of data of the customers during their transaction process (Goel and
et. al., 2020). But due to technology the latest innovation of Amazon in its delivery
system through the drone as provided a company a major benefit and success.
Porter’s five force model
Threats of new entrants (Low): That Amazon is already developed leading e-commerce
business that is diversified all around the globe with market share of 39% in the recent year. For
new entrants to enter the tea industry business with strong customer base good financial
condition so that they can operate globally and compete with Amazon.
Bargaining power of buyer (High): The bargaining power of the customers is really high due to
the various alternatives available in the market for example in order to collect the grocery the
customers will compare the prices of the Amazon with the other brands like Walmart which
gives the customer a variety of products and a power to switch (Rodrigues, 2020). Therefore the
Amazon must focus on its high quality of products to provide the customers more satisfaction
and experience while buying from Amazon.
Bargaining power of supplier (Moderate): The bargaining power of suppliers moderate as there
is very less number of suppliers available and the centre 3 with the same quality and price
therefore in order to increase the power of supplied the supplier must provide the unique product
that cannot be completed by any other supplier or the company.
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Threat of substitutes (High): The threat of substitute of products and services aggressively high
for the Amazon as customers switch rapidly towards the other brands of the companies that
provides the products at the cheap price under the same quality. In the market there are many
varieties of products that are not sold by the Amazon due to its brand image (Zainal-Abidin and
Mohd-Roslin, 2020).
Competitive rivalry (High): The E-Commerce retail industry in which Amazon operates is full
of competitors where the rivalry between the competitive companies is intensifying. The major
competitors of the Amazon are Wal-Mart, eBay, Myntra etc. These companies are also providing
the same range of products under the same prices and quality which brings high level of
competition between the companies.
Reflection
From the above module on the strategic management I am able to analyse and learn the
various strategies which are necessary for me in achieving the goals objectives of the
organisation. Tab module has help me in widening my thoughts and expanded my thinking
ability to observe the various strategies that are used by the organisations of the different
industry in order to sustain in market and also to create the competitiveness against the rival
companies. The company has made me learn how to conduct the swot analysis in order to
analyse the strengths and weaknesses of the organisation as well is strengths and weaknesses of
my personality and skills. While conducting SWOT analysis I was able to analyse that I have
good observation and analytical skills which will help me in my career development. Tab
modulus help me to analyse the various issues that E-Commerce industry are facing at the global
level which will help me in starting up my business in such industry where I can drive more
success. Also learnt that innovation is the major source of positive feedback in the industry by
which I also realised it is very important to regularly analyse my skills and innovate and develop
new skills for my personal and professional development. Designing the strategic plan for the
Amazon has made me learn various marketing and strategy development skills like how to
conduct pestle analysis, Porters five model and Competitive strategies which will help in
analysing the competitive strength of the organisation and also the areas that are required to be
improved or developed for the competitive advantage. Hence, strategic management module
unable me to develop my holistic strategy view and learnt many strategies for the success of an
organisation. I have gained research and analytical skills that will be beneficial for my career
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development. Module has really supported me in fostering my career development and personal
development by making me learn and develop various personal and professional skills.
CONCLUSION
It is concluded from the of the assessment that it is very important for an organisation to
regularly analyse its competitive strengths and market positions which helps the organisations in
analysing the area of improvement across the value chain. Value chain analysis is imperative tool
in analysing the factors that are contributing to the value among the customers and creating the
competitive advantage for the organization. Every organisation should develop a strategic plan
using the pestle analysis and the porter's five model in order to pursuit of competitive advantage
and which is the factors that will help the organisation in creating profits and innovation.
References:
Books and Journals
Alassaf, D and et. al., 2020. Amazon: Industrial/International Corporation and Dynamics.
In Innovation Management in the Intelligent World (pp. 67-80). Springer, Cham.
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Aydın, G., Nyadera, I.N. and Önder, M., 2020. Strategic Management in Turkey’s Public Sector:
Reforms and Application Issues. Public Organization Review. 20(4). pp.719-734.
Bailey, D., Pitelis, C. and Tomlinson, P.R., 2020. Strategic management and regional industrial
strategy: cross-fertilization to mutual advantage. Regional Studies. 54(5). pp.647-659.
Barbosa, M., Castañeda-Ayarza, J.A. and Ferreira, D.H.L., 2020. Sustainable strategic
management (GES): Sustainability in small business. Journal of Cleaner
Production. 258. p.120880.
Barney, J.B., 2020. Measuring firm performance in a way that is consistent with strategic
management theory. Academy of Management Discoveries. 6(1). pp.5-7.
Fuchs, P and et. al., 2020. Promoting sustainable development in higher education institutions:
the use of the balanced scorecard as a strategic management system in support of green
marketing. International Journal of Sustainability in Higher Education.
Goel, P and et. al., 2020. Customer Experiences, Expectations and Satisfaction Level Towards
Services Provided by Amazon. International journal of Tourism and hospitality in Asia
Pacific. 3(1). pp.89-101.
Knight, E and et. al., 2020. The competitive advantage of regions: economic geography and
strategic management intersections.
Nadikattu, R.R., 2020. Effective Innovation Management in Strategic Planning. Rahul Reddy
Nadikattu, INTERNATIONAL JOURNAL OF ENGINEERING, SCIENCE AND. 9(5).
pp.106-116..
Ojha, D., Patel, P.C. and Sridharan, S.V., 2020. Dynamic strategic planning and firm competitive
performance: A conceptualization and an empirical test. International Journal of
Production Economics. 222. p.107509.
Ongaro, E and et. al., 2021. Strategic management as an enabler of co-creation in public
services. Policy & Politics.
Phan, S., 2021. The effect of PESTLE factors on development of e-commerce. International
Journal of Data and Network Science. 5(1). pp.37-42.
Quarm, R.S. and Busharads, M.O.E., 2020. Competitive Intelligence and Corresponding
Outcome in a Strategic Management Process: A Review of Literature. OSF Preprints,
(eczr2).
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Rodrigues, M.M.M.L.A., 2020. Competitive advantage in the age of digital platforms: the case
of Amazon. com (Doctoral dissertation).
Sheth, J., Jain, V. and Ambika, A., 2020. Repositioning the customer support services: the next
frontier of competitive advantage. European Journal of Marketing.
Svatosova, V., 2020. The Importance of Online Shopping Behavior in the Strategic Management
of E-Commerce Competitiveness. Journal of Competitiveness, 12(4), p.143.
Velikorossov, V.V and et. al., 2020. Strategic management.
Wang, Z and et. al., 2020. Strategic management of product recovery and its environmental
impact. International Journal of Production Research, pp.1-21.
Wenzel, M., Stanske, S. and Lieberman, M.B., 2020. Strategic responses to crisis. Strategic
Management Journal.
Zainal-Abidin, H.A. and Mohd-Roslin, R., 2020. An Internal Marketing-based View of Porter’s
Model of Competitive Advantage: The Conceptual Framework. International Journal of
Business and Technology Management, 2(3), pp.58-67.
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