Services provided by Amazon and its biggest competitor

This study discusses the services provided by Amazon and its biggest competitor, along with the competitive advantages and challenges faced by Amazon. It also explores the factors that motivate consumers and businesses to buy products from Amazon.

Case Study

Table of Contents
INTRODUCTION...........................................................................................................................1
Services provided by Amazon and its biggest competitor...........................................................1
Competitive advantages of Amazon’s along with challenges which they have..........................1
Factors of motivation which allow consumers and businesses to buy products and services
from Amazon...............................................................................................................................2
Amazon’s eco system..................................................................................................................3
Four recommendations for Amazon for growth in the future......................................................3
CONCLUSION................................................................................................................................4
REFERENCES................................................................................................................................5

INTRODUCTION
Business strategy refers a set of actions which makes companies able to take competitive
advantages and attracting customers as well (Leonidou and et.al., 2017). This study is based on
Amazon case study which is an American multinational technology company. This study will
show some key factors and strategies of success of Amazon like its loyalty program, pricing
strategies etc. Further, it will also show some problems which Amazon is facing along with
recommendations to solve them.
Services provided by Amazon and its biggest competitor
Before discussing about products and services provided by Amazon, it is important to
discuss about Amazon as what is it and what is its position in the market and how it made growth
in last year’s. Amazon is the most well known as well as largest companies in the world (Goel
and et.al., 2020). CEO of this retailer believes that internet is one of the best and revolutionary
new forms of commerce and satisfaction of customers is one of the main key of the success. It
also believes that there are mainly 3 terms and keys of his success such as: lower pricing of
products, qualitative and diversified products and convenience. All over it can be said that its all
strategies are customers centric.
In the context of services and products, it can be said that it offers varieties of products
which are being divided into different categories. As per the physical category it sells: books,
games, movies, music; computers and electronics; health and beauty products; home and garden
tools; clothing shoes and others. In the context of competitors it can be said that companies who
offer same kind of products to customers are known as competitors (Zhu and Liu, 2018).
Amazon has both online and offline competitors. Among all competitors one of the biggest
competitors is: EBay and Wal-Mart which is an omni channel retailer. E-bay is also well known
online platform which offers online shopping to customers just like Amazon. Its platform and
website is free for use.
Competitive advantages of Amazon’s along with challenges which they have
Before discussing about competitive advantages which it has taken and can take it is
important to discuss about its competitors and their performance. Wal-Mart which is an omni
channel retailer has a strong position in the market. It is stated that Wal-Mart bought discount
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Amazon competitor Jet.com for about $3.3 Billion and in overall market capitalization both
falling behind. But in 2017, Wal-Mart has made about 60% growth in online sales.
E-commerce capability: Now, in the context of Amazon, it can be said that capability of
Amazon of E-commerce is far better than Wal-Mart and it is one of the main key of competitive
advantages (Shevchenko, 2020).
Engagement with other companies: It is also stated that along with using internationalization
strategy Amazon is actively engaged with Netflix and iTunes and provide audio and video
download to customers. It has acquisition on purchase of Souq.com.
Low prices: It is one of the main key of its success which allows it to take competitive
advantages. As per the condition of market it changes its pricing policy in order to attract
customers to the great extent. It uses cost leadership strategy as competitive advantages.
Challenges
 One of the main threat and issue which Amazon is facing is its international expansion
China based Alibaba. In this context, ot is stated that this retailer operates more
businesses than combined businesses of Amazon and Wal-Mart in worldwide.
 Its international performance as compare to others is quite low. Dealing with more
intense government scrutiny and all laws is other main treat.
It is also stated that Amazon and all other retailers are bind to collect sales taxes from online
purchases. It is also facing problems related to lawsuit of its business aspects (Khorsand, 2017).
 Rising cost of shipping was also considered one of the biggest threat which reduces its
profit margin.
Factors of motivation which allow consumers and businesses to buy products and services from
Amazon
There are several factors which are being considered by customers and businesses while
making buying decision. Some important factors include: quality of products, prices of products
and services, convenience or access to services. And it is already stated that Amazon focuses on
these three main terms of factors. It just helps it out like motivators to customers and businesses
to buy products from this retailer only.
Amazon prime loyalty program: It can be said that customers prefer to buy products from
those companies who provide them attractive offers. Amazon prime is one of the best strategies.
It is a paid subscription service which gives access to customers as well as businesses to services.
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In this type, customers get free one or two day delivery by paying only $99 a year. Customers
also get free access to prime music and greater selection of services. So, it can be said that this
strategy and business model works as like motivator (Figueiredo, 2019).
Advanced use of technology: In this context, it can be said that Amazon makes great use of
information technology which allows it measuring customer’s satisfaction, effectiveness of
services, website management, customers interaction. It focuses on satisfying needs of all types
of customers by providing 24*7 customers service to them. It makes customers and businesses
make feel valued and motivated. In addition, it can also be said that warehouse employees of
Amazon carries a shortened size device with them having bar code scanner. This tool and ability
to use technology at right place has made it able to launch AWS and attracting customers.
Timely shipment (Pellegrini, 2019)
Amazon’s eco system
The Amazon rainforest is known and considered the largest rainforest ecosystem in the
world. This system of Amazon includes: drainage basin for the Amazon River. This River is
stated about 4,000 miles long. One of the main reasons of remembering this river is it is at the
centre of the functioning of this ecosystem. Climate changes have direct impact on its ecosystem.
One of the main role of The eco-system of Amazon is it regulates the world’s oxygen and
Carbon cycle. It also produces around 6% of the world’s oxygen and act as a carbon sink. So, it
can be said that this eco system of Amazon has capability of absorbing carbon Di oxide from the
atmosphere (Shi, Aaltonen and Henfridsson, 2019).
This system has also allowed it to accomplish its goal of providing services and products
and everything to everyone. Its vision statement states that it wants to be the earth’s most
customer centric company as well as making a place where all level of people can come and find
products as per their requirements. They do not have to go other shops and places. It can save
their time and cost as well. So, it can be said that it can complete its vision statement with the
help of eco system. Because customers want to buy products from organizations who are
sustainable.
Four recommendations for Amazon for growth in the future
It is stated that Amazon is facing several problems related to high intensity of
competition like Ali Baba, legal and social aspects, tax related and others. It is the most well
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known retailer but due to all these problems like increasing shipping cost and others it has lost its
shares and need to focus on reducing these problems. In this context some ways can be
recommended to Amazon which can help it out in the future such as:
Geographical expansion: It is stated that having more operations than Amazon, Ali
Baba is putting threats so, it can be suggested to Amazon that by making innovative products it
can expand its business. It is also stated as per the CITI research that Europe has been company’s
geographic primary expansion target with having about 40% sales volume. So, it is the big
opportunity for Amazon to develop in Asia and Middle East and attract customers (Azevedo-
Santos and et.al., 2016)
Customer centricity: There are some social aspects which are affecting it in a negative
manner. So, it can be recommended to this company that it can put a chair in every boardroom
for representing customers in order to remind them about feature an innovation of products.
Corporate agility: It is all about n ability to become flexible and speed of execution. It
will make it able to adapt business environmental situations like legal aspects and without getting
affected working accordingly can help it out in development (Lehn, 2018).
Innovation: It is all about making some changes in products by bringing out new ideas.
By bringing out new ideas of performing activities can make it able to take competitive
advantages and having strong position in the market.
CONCLUSION
From the above assignment, it can be concluded that business strategies along with
pricing strategies played a vital role in taking competitive advantages. This study has discussed
some factors which motivates customers and businesses to buy products from companies such
as: pricing, quality and convenience.
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REFERENCES
Books and Journals:
Azevedo-Santos, V.M. and et.al., 2016. Amazon aquatic biodiversity imperiled by oil
spills. Biodiversity and conservation. 25(13). pp.2831-2834.
Figueiredo, J.P.B.D., 2019. The impact of loyalty program type, personality and brand
familiarity on loyalty programs’ valuation (Doctoral dissertation).
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
Pasific, 3(1), pp.89-101.
Khorsand, H.E., 2017. A STUDY OF MARKETING STRATEGIES ADOPTED FOR
MARKETING OF CONSUMER PRODUCTS IN RURAL AREA OF PUNE
DISTRICT WITH SPECIAL REFERENCE TO HINDUSTAN UNILEVER
LTD (Doctoral dissertation, DEPARTMENT OF COMMERCE, BHARATI
VIDYAPEETH).
Lehn, K., 2018. Corporate governance, agility, and survival. International Journal of the
Economics of Business. 25(1). pp.65-72.
Leonidou, L.C. and et.al., 2017. Internal drivers and performance consequences of small firm
green business strategy: The moderating role of external forces. Journal of business
ethics. 140(3). pp.585-606.
Pellegrini, L., 2019. Community monitoring of socio-environmental liabilities with advanced
technologies in the Ecuadorian and Peruvian Amazon.
Shevchenko, E., 2020. Amazon as a global sales channel for small and medium size Finnish
companies.
Shi, R., Aaltonen, A. and Henfridsson, O., 2019. Seeding for Quality of Platform Complements:
Evidence from Amazon’s Alexa Ecosystem.
Zhu, F. and Liu, Q., 2018. Competing with complementors: An empirical look at Amazon.
com. Strategic Management Journal. 39(10). pp.2618-2642.
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