Design Thinking in Amazon

This report explores the implementation of design thinking in Amazon and its impact on innovation and disruption. It discusses the factors affecting design thinking in Amazon and provides examples of successful implementation. The report also highlights the importance of design thinking in sustaining Amazon's success and offers recommendations for future integration.

Design Thinking in Amazon
Design Thinking in Amazon
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Design Thinking in Amazon
Executive Summary
This report deals with understanding design thinking and innovation in Amazon and how the
organization has implemented it. The report will also focus on all the factors affecting design
thinking in Amazon and some example which better describe the implementation of design
thinking in Amazon as well.
Amazon is a US-based e-commerce company, which is the largest e-commerce and cloud
computing company in the world. It was established by Jeff Bezos in 1994 as an online
bookstore but later expanded to sell other items such as toys, videos, audios, home appliance
etc. Eventually, it entered the e-commerce platform and is known to have revolutionised it as
well. Amazon has implemented various disruptive innovation technique, of which design
thinking is one. In design thinking, the organization first tries to understand what exactly does
the customer want and the trend behind it. Once this is understood, the company then moves
ahead towards creating the product or shifting the demand to something which it is capable
of. Amazon has grown a lot because of its design thinking approach. It is one of the few
organizations to have actually implemented it in real time and obtain successful results as
well, and Kindle is one such example of successful design thinking.
In order to sustain this level of success, it is important for Amazon to keep re-inventing this
disruption and coming up with ideas best focussed at maintaining an upward stride.

Design Thinking in Amazon
Table of Contents
Table of Contents..............................................................................................................3
Introduction......................................................................................................................4
About Amazon..................................................................................................................4
Innovation in Amazon.......................................................................................................5
SWOT Analysis.................................................................................................................6
Design Thinking in Amazon..............................................................................................7
Innovation and Strategic Alignment in Amazon...............................................................8
Business Model Canvas.....................................................................................................9
Interrelationship of Business Model Canvas............................................................................10
Recommendations...........................................................................................................10
Bibliography....................................................................................................................11

Design Thinking in Amazon
Introduction
Every organization has to evolve through time by implementing innovative ways throughout
its course of business. This innovation can be implemented in any aspect of the business be it
designing, finance, supply chain, production etc. The entire purpose of implementing this
innovation is to ensure that the company is able to sustain itself amidst all the competition.
Design thinking has been one of the most implemented approaches toward the growth of the
organization.
This report will discuss design thinking as implemented in Amazon and how it has helped the
company grow so successful and how it has further planned the course of future operations as
well. The report will also focus on all the factors affecting design thinking in Amazon and
some example which better describe the implementation of design thinking in Amazon as
well.
About Amazon
Amazon is a US-based e-commerce company, which is the largest e-commerce and cloud
computing company in the world. It was established by Jeff Bezos in 1994 as an online
bookstore but later expanded to sell other items such as toys, videos, audios, home appliance
etc. Eventually, it entered the e-commerce platform and is known to have revolutionised it as
well (Amazon , 2019)
The company has since then diversified its offerings by working in different spheres such as
digital publishing, television streaming, groceries and cloud computing to name a few.
Amazon is known to have a strong vendor-merchant base where it allows a B2B and a B2C
interaction directly, on decent prices. The company has this platform built to encourage
small-time sellers to go online and challenge the conventional retail norms to reach out to a
diverse and global audience. The company has used various tools for its success and has
made the best out of the data as well. Amazon has a well-established warehousing and supply
chain which enables it to deal with customers in a better manner to provide to them a quick
shopping experience as well. Amazon has spent a lot on its operations and expanded to

Design Thinking in Amazon
several countries by directly taking down on their competitors in an extremely aggressive and
head on manner.
Design thinking is a non-linear, iterative process which seeks to understand users, challenge
assumptions, redefine problems and create innovative solutions to prototype and test. The
method consists of 5 phases—Empathize, Define, Ideate, Prototype and Test and is most
useful when you want to tackle problems that are ill-defined or unknown (Jones, 2018).
Innovation in Amazon
Amazon is considered to be one of the most innovative organizations to have come into
picture in the 21st century. The company started from merely selling books online and grew
up to become the largest e-commerce player all around the world.
Like every other organization, Amazon too has required a lot of changes in approach for its
growth. The company has involved and integrated innovative measures in all of the aspects of
its operations. For example, the “one-click buy” is patented by Amazon as it provides the
customer with ease of buying and saves money, thus adding to the online shopping
experience (Cardoso, 2010). This is just one of the most basic examples of how Amazon has
incorporated innovation to improve the customer shopping experience. There are many such
instances in various other operational areas of the company as well such as the supply chain;
the Amazon warehousing and supply chain will now involve AI into the process to make the
process more efficient, save time and money.
Furthermore, the innovation capabilities of Amazon are huge. The company has infinite
resources in terms of manpower, and hence, it is able to pull of innovative ideas and practices
quite well (Glessner, 2016). Amazon has never restricted itself in terms of thinking out of the
box and has ensured that their services and products are experienced based, and just as how
the customers would have wanted them to be.
Lastly, the value creation from innovation. Needless to say, with all the growth that Amazon
has achieved until now, the most important of all has been the value that it has successfully
created; for itself and for the customers. Amazon's innovative approach towards
understanding the consumer mindset, or implementing the design thinking process has helped

Design Thinking in Amazon
it gain enough momentum to independently organize such level of genius diversification and
growth strategies for itself (Amazon, 2019).
Design thinking here is the base of every plan of Amazon. This is so because Amazon has
understood that in order to create demand, they first have to understand it's the source. Once
they do this successfully, then it becomes easy to apply the relevant strategies and principles
of design thinking and come up with new innovative products which will appeal the most to
the consumers.
SWOT Analysis
Strength:
 Largest online retailer
 The best in class technical infrastructure
 The best workforce (Glessner, 2016).
 Established strategic think tank
 infinite resources in terms of manpower, and hence, it is able to pull of innovative
ideas and practices quite well
Weakness:
 low rate of diversification and innovation implementation
 danger of losing margin because of free shipping
 expenses based on supply chain and warehousing can increase with time
 prone to frauds by customers (BCG, 2019)
Opportunities:
 with all the growth that Amazon has achieved until now, the most important of all has
been the value that it has successfully created; for itself and for the customers
 Amazon's innovative approach towards understanding the consumer mind-set, or
implementing the design thinking process has helped it gain enough momentum to
independently organize such level of genius diversification and growth strategies for
itself (Amazon, 2019)
 Once they do this successfully, then it becomes easy to apply the relevant strategies
and principles of design thinking and come up with new innovative products which
will appeal the most to the consumers

Design Thinking in Amazon
Threats:
 Prone to hacking which is expected to grow over time with technological advances
 Rising cost of material will restrict Amazon’s discount policy
 Increase in competition from local retailers (online and offline both)
Design Thinking in Amazon
Disruption is an extremely important requirement for companies to thrive today. In this era of
globalization, disruption and innovation are essential. If a company is not disrupting itself of
innovating for itself then it is probably dying. Design thinking is one such disruption where
the company focuses more on the users’ demand and expectation than on simply developing
the product (Razzouk & Shute, 2012). In design thinking, the organization first tries to
understand what exactly does the customer want and the trend behind it. Once this is
understood, the company then moves ahead towards creating the product or shifting the
demand to something which it is capable of. This helps the company to not just understand
the consumer, but to also redirect the market growth according to its own wishes as well. the
design thinking approach can be a useful tool if the company operating it is aware of how it is
to be implemented and where to stop using it. Initially, this approach can be quite
overwhelming and interesting but it is to be understood that there are right time and approach
to implementing design thinking in the organization (Ahmed, Wallace, & Blessing, 2013).
Amazon has grown a lot because of its design thinking approach. It is one of the few
organizations to have actually implemented it in real time and obtain successful results as
well. To explain the achievements of design thinking, in a nutshell, it can be said that design
thinking allows the organizations to achieve innovation and disruption in a quick and easy
manner (CARLGREN, ELMQUIST, & RAUTH, 2015). After organizations reach the
maturity stage it is important for them to implement the vertical integration approach or
disrupt their own business in a manner which can help the company diversify its business
offerings. Since the customers constantly keep looking for new products and services, this
process becomes essential.

Design Thinking in Amazon
Amazon has implemented design thinking in a very solid manner. The best example of this is
the Kindle. Amazon founder and CEO Jeff Bezos have defined design thinking as working
backwards to consumers and learning or developing new skills to ensure that Amazon is able
to sustain in the market and expand itself. Kindle was nothing but an e-reader for people who
did not want to purchase an iPad of triple the cost or carry around bulky books in their bag
(CURTIS, 2013). Hence, Kindle helped solve this purpose. It was an e-reader at an affordable
cost, with no extra function and was extremely lightweight. Also, it felt as if paper and thus,
gave an authentic reading experience to the people. This one product has implemented all the
principles of design thinking and has completely outrun itself in this pursuit. Kindle was so
successful that it now has about 42,00,000 books, and a lot of them are of Amazon
publication as well.
Innovation and Strategic Alignment in Amazon
All organizations adopt a strategic approach to implement innovation in their organization.
Here it is important to understand that the strategy adopted by the organization has to be in
sync with its objectives and goals, and should reflect in the practice as well. For Amazon,
design thinking has been an innovative strategic approach towards success (Satell, 2016).
Amazon is one of the few organizations who undertook design thinking and actually went
back and let consumer dictate the demand.
For example, the customers wanted their products to be delivered faster to them. Hence,
Amazon came out with Amazon Prime which allowed the customers to have one-day
delivery for just $20 annually. This not only appealed to the customer, but it also helped
Amazon get an edge over the consumers (Rodgers & Inella, 2017). Now for this, Amazon
had already prepared itself by Amazon Fulfilled ie, establishing warehousing and supply
chain of its own to provide the customers with a one-day rush order! This helped Amazon
gain a competitive advantage over its competitors such as Walmart, Flipkart, eBay etc.
Again, this success could be attributed to the process of design thinking which allowed
Amazon to understand customer requirement and find approaches that suited all. Also,
innovation in Amazon is not just limited to the production or the customer front (BRUSH,
2018). Amazon has innovated their work environment as well. this has allowed the company
employees to achieve a maximum level of efficiency and idea generation by deliberating and

Design Thinking in Amazon
discussing in an environment which is more productive and allows them to stretch their limits
as well.
For Amazon, the General Theory of Innovation is best suited as it serves both product and
customer services (Mendeleev, 2013). As a company, Amazon has the required bandwidth to
carry out this strategic innovation and focus on developing more such innovations which can
then drive demand. This strategic theory will help Amazon as it does not require much
thinking because of its simple and basic nature.
Business Model Canvas
Interrelationship of Business Model Canvas

Design Thinking in Amazon
This business model canvas can be used to communicate to the shareholders clearly the
detailed structure of Amazon from scratch. This canvas allows for a deep yet precise
understanding of Amazon as an organization and how it will grow further with time.
Recommendations
After understanding how Amazon has implemented design thinking, it can be best understood
that the company has a long way to go, and with their approach centred on catering to the
demand and creating it, it is right to imply that it is in the right direction.
Following are some other ways design thinking can be sustained in Amazon and can be
integrated with strategic practices as well:
 Focus more on identifying how to please the customer with services that is employing
techniques which will help in understand the consumer pinch point and ways to
provide them an enhanced service experience which is focused on their wants and like
 Involving a solution-based approach to marketing: this would be directly in sync with
the Amazon operations. This can be done by implementing measures which focus on
identifying the solutions to pre-existing problems and trying them over and over again
till a concrete solution is reached.
 Ensuring more consumer participation in strategy formation: this can be done by
surveys and taking more active feedbacks to ensure that the details are well captured
(McKinsey, 2016)
 Allow flexibility in terms of innovation and strategic implementation of plans in the
organization: the only way to achieve this is by coming with innovations to ensure
that the product team is given full independence to come up with the products that
think from the customer point of view and are more solution centred

Design Thinking in Amazon
Bibliography
Jones, M. (2018). Design Thinking . Retrieved from
https://www.interaction-design.org/literature/topics/design-thinking
Amazon . (2019). About Us. Retrieved from https://www.aboutamazon.com/our-company
Cardoso, M. (2010). Amazon is Design Thinking. Retrieved from
https://www.slideshare.net/marcellocardoso/amazon-is-design-thinking
Glessner, D. (2016). Disrupt or be disrupted: Using design thinking to re-imagine customer
experiences. Retrieved from https://www.genpact.com/insight/blog/disrupt-or-be-
disrupted-using-design-thinking-to-re-imagine-customer-experiences
Amazon. (2019). Innovation. Retrieved from https://www.aboutamazon.com/innovation
Razzouk, R., & Shute, V. (2012). What Is Design Thinking and Why Is It Important? Review
of Educational Research.
Ahmed, S., Wallace, K. M., & Blessing, L. T. (2013). Understanding the differences between
how novice and experienced designers approach design tasks. Research in
Engineering Design, 14.
CARLGREN, L., ELMQUIST, M., & RAUTH, I. (2015). EXPLORING THE USE OF
DESIGN THINKING IN LARGE ORGANIZATIONS: Towards a research agenda.
Swedish Design Research Journal.
Satell, B. G. (2016). How Amazon Innovates. Retrieved from https://www.inc.com/greg-
satell/the-secret-behind-amazons-uncanny-ability-to-out-innovate-just-about-every-
other-company-on-planet.html
Rodgers, P., & Inella, G. (2017). Paradoxes in Design Thinking. The Design Journal , 20.
CURTIS, S. (2013). The Innovations That Took Amazon From Online Bookseller To
Dominant Global Marketplace. Retrieved from https://www.businessinsider.in/The-
Innovations-That-Took-Amazon-From-Online-Bookseller-To-Dominant-Global-
Marketplace/articleshow/24196873.cms
BRUSH, J. (2018). The Design Theory Behind Amazon’s $5.6 Billion Success. Retrieved
from https://www.fastcompany.com/90160960/the-design-theory-behind-amazons-5-
6-billion-success
Mendeleev, D. I. (2013). The General Theory of Innovation (GTI) and Its Capabilities: An
Overview . Retrieved from
https://www.strategicinnovation.com/wp-content/uploads/GTI_Overview.pdf

Design Thinking in Amazon
McKinsey. (2016). The power of design thinking . Retrieved from
https://www.mckinsey.com/business-functions/digital-mckinsey/our-insights/the-
power-of-design-thinking
BCG. (2019). Innovation & Product Development. Retrieved from https://www.bcg.com/en-
in/capabilities/innovation-product-development/default.aspx