Competing with Amazon: Analysis of Challenges and Strategic Options

This case study examines the operational challenges within Amazon's business units and explores strategic and operational options for companies aiming to compete with the e-commerce giant. It identifies challenges such as inventory management, customer relations, data security, and customer satisfaction. The report suggests strategies like high investment in business operations, diversification of products, effective complaint management systems, use of advanced technologies, and strategic alliances to overcome these challenges and gain a competitive advantage. Ultimately, the study concludes that while competing with Amazon is difficult, focusing on its operational loopholes and implementing effective strategies can lead to success and market share.

Competency with
Amazon

Table of Contents
INTRODUCTION ..........................................................................................................................2
MAIN BODY...................................................................................................................................2
Identify and analyse the main operational challenges in and between Amazons business units
using concepts and theories learnt750.........................................................................................2
As per the above research identify the strategic and operational options available with the
company wants to compete with Amazon..................................................................................4
CONCLUSION ...............................................................................................................................6
REFERNCES:..................................................................................................................................7
Books and Journals:....................................................................................................................7

INTRODUCTION
Amazon is a large organisation which started their business as an online marketplace for
books and then expand that much to become one of the five biggest companies in US in field of
information technology (Rogers, Bryant and Howard, 2020). The company has used several
strategies of growth to reach at this position and deals in many kind of fields especially E-
commerce business, Amazon web services and many more. This report contains various
operational challenges which are faced in Amazon business and between their several units all
over the world. On the basis of the challenges faced by Amazon this report further contains
several strategic and operational options that are available with the business or company who
wants to compete with Amazon in the market place.
MAIN BODY
Identify and analyse the main operational challenges in and between Amazons business units
using concepts and theories learnt750
There are several challenges which are faces by business of Amazon in order to operate in
effective manner. The challenges in different parts of operational management are given below:
 The company is involves in various kinds of business and deals with around 1500
products with the help of their websites. It became very difficult for the company to
manage inventory between stores and Amazon for them. The company is facing a great
challenge in this sector. There are many cases in which the customers are provided wrong
item for their order from the company which damages the profitability as well as
reputation of the organisation. Taking this aspect in mind the company is required to
manage their inventory in effective manner. This can be understood with the helps of
Market penetration technique provided in Ansoff matrix which helps the organisation to
provide several strategies which can be used by business to grow in existing market with
the help of existing products offered by the company (Balog, 2020).
 Another biggest problem faced by operational department is to manage effective relations
with the customers, suppliers, warehouses and shipping companies so that they can run
their business effectively and make deliveries promptly. Although the company has a
great return policies but this return of sold material is a loss for the organisation. The
company has a return policy and not have replacement option in so many products which

can provide them a profit. The management of returns and handling fulfilment of demand
of customers is the another challenge faced by the company. This is part of operational
principles to have such operation in the organisation so that effective services can be
provided to the customers. The customers are required to provide effective return services
so that they can feel satisfy with the organisation (Beto, Metallinos-Katsaras, and Leung,
2020).
 The Amazon company deals with the technology sector in which they provide several
services related to the technology especially in AWS (Amazon Web Services). It is a
great challenge for the company to manage the theft of digital data of their customers as
the Web services includes a large number of cloud data of various companies in the
Amazon. The company is required to have effective as well as trusted employees so that
they can manage the company in effective manner. The safety of employees and
consumers should be main priority of businesses in the organisations in order to keep
them motivated towards the organisation which has been provided in the Maslow's
hierarchy of needs.
 Another challenge of the company is to have effective customer satisfaction as well as
reviews from the customers. Being an organisation which deals in various sector it is
essential for Amazon to have good reviews from the customers in order to get effective
results from the customers. Now the company is planning to offer offline products to
their customers which requires more efforts on the satisfaction of customers of the
company. This is a great challenge for the company to attract the customers on the offline
stores and provide effective customer experience. This can be understood with the help of
Diversification quadrant of Ansoff matrix which helps an organisation in formulation of
growth strategies (Fraundorfer, 2021).
 Minimum complaint theory is a theory which provides for application of valid options in
order to have minimum valid complaints in an organisation. It has been observed in case
of Amazon that they have several compliant in the organisation and in order to provide
maximum customer satisfaction the organisation is require to have an effective complain
management system organisation. There are so many genuine complaints in against of
Amazon company for their operations in and between various units of the company. The

company in order to have maximum satisfaction of employees in the organisation the
amazon is required to use this theory in the organisation.
The company is required to manage all these challenges discussed above in order to achieve
more success in the market place. Amazon can use several operational theories which will help
them to achieve success in the market (Jolley, and Khalaf, 2020).
As per the above research identify the strategic and operational options available with the
company wants to compete with Amazon
On the basis of the above research there are several options available with the new company to
be opened by Paul Marcus in order to have a good competition with the Amazon Company. The
company has several strategies they can adapt to have high competition. The new company if
work with good strategic options them will be able to have a high competition with Amazon
which are given below:
High investment in the business operations: Amazon is a large organisation having an
approximate investment of 1 trillion USD. In order to compete with the company the business
operations will require to have a good amount to investment in the business even more than what
Amazon has invested in their business. The new company will require an investment of
approximately 2 trillion USD to set up a large business like Amazon dealing in various kinds of
businesses. The business operations requires high technical infrastructure which will help the
company to offer products in cost effective manner which also requires high investment.
Effective strategies for growth: In order to achieve effective growth in the market the company
will require to have several strategies such as diversification of products in the market. The great
success of Amazon is because of their offering in diversified products and in order to use
effective strategies to grow the company like amazon the organisation should offer diversified
products to their customers. Apart from that the company can also use the strategy to make
themselves physically available for their customers so that they can provide maximum customer
satisfaction as well as brand image in the market. The offline store in the market will also help
the company to build trust of the customers.
Effective complaint management system: The Amazon is lacking behind to manage the
complaints of their clients which can affect their reputation in the market and later their
profitability in order to compete with the company, new company can have an effective
complaint management system because it is the most effective strategy which helps an

organisation to achieve competitive advantage. The services will also get improved if an
organisation focus on the valid complaints of their customers and company will became able to
get feedback of their customers. Apart from this, the effective complaint management system
will help the company to get maximum customer satisfaction which provides the company
positive reviews from them. These positive reviews from the customers in digital world will help
the company to get new customers from global market (Khoroshevsky, Efimenko, and
Efimenko, 2020).
Use of High technologies in the company: The Infrastructure of amazon is based on high level
of technologies such as they use robotics technicals for the purpose of packaging in the
organisation. Amazon has high utilisation of Artificial intelligence in their organisation which
helps them to reduce their labour cost. In order to have a great competition with Amazon it is
essential for the company to have a proper technological infrastructure so that they can also work
in cost effective manner. The main reason behind the success of amazon is that they are good
adapter of new technologies and the new organisation willing to compete with Amazon should
also have a proper research and development department so that they can also utilize updated
technologies in their organisation.
Several strategic alliances: Strategic Alliance refers to the alliance made by an organisation to
get profits and market share. There are various organisation who wants to enter into a strategic
alliance to gets a competitive advantage in the market. Strategic alliance is considered as an
effective tool which can be used by new company to compete with a large business like Amazon
as it will help the company to gain the support of the alliance company also. In order to run a
business like amazon it is essential to have a proper management and good relations with the
shipping as well as warehouse departments. Apart from this the Amazon is a great competitor of
company like Google and Apple. To compete with Amazon, the company can also go with the
strategic alliance with google and Apple so that they can be able to compete with them in
effective manner (Khoroshevsky, Efimenko, and Efimenko, 2020).
CONCLUSION
The above discussion helps to conclude that it is very difficult to compete with large
organisation like Amazon but if any organisation is able to cope up with several challenges faced
by the company amazon then they will get the chance to gain competitive advantage in the
market. This competitive advantage will help the new company to create high competition for a

large company like Amazon. This will require several strategies to be formulated by the new
company on the basis of loopholes or challenges found in the operational management of
Amazon.

REFERNCES:
Books and Journals:
Rogers, K., Bryant, D.A. and Howard, A., 2020, April. Robot Gendering: Influences on Trust,
Occupational Competency, and Preference of Robot Over Human. In Extended
Abstracts of the 2020 CHI Conference on Human Factors in Computing Systems (pp. 1-
7).
Balog, K., 2020. The concept and competitiveness of agile organization in the fourth industrial
revolution's drift. Strategic Management, 25(3), pp.14-27.
Beto, J.A., Metallinos-Katsaras, E. and Leung, C., 2020. Crowdsourcing: A critical reflection on
this new frontier of participant recruiting in nutrition and dietetics research. Journal of
the Academy of Nutrition and Dietetics, 120(2), pp.193-196.
Fraundorfer, T., 2021. Cloud Interchangeability/Author Tanja Freundorfer, BSc (Doctoral
dissertation, Universität Linz).
Jolley, J. and Khalaf, C., 2020. Skillshed Analysis as a Tool to Inform Workforce Training
Programs: The Case of Amazon HQ2. Economic Development in Higher Education, 3,
pp.1-5.
Khoroshevsky, V.F., Efimenko, V.F. and Efimenko, I.V., 2020, October. Artificial Intelligence,
Biotechnology and Medicine: Reality, Myths and Trends. In Russian Conference on
Artificial Intelligence (pp. 416-436). Springer, Cham.