Amazon's Strategic Management Case Study

This assignment requires a detailed analysis of Amazon's strategic management. Students must examine key aspects such as Amazon's core competencies, its competitive advantages in the marketplace, and the strategic decisions that have led to its success. The analysis should also consider potential future challenges and opportunities facing Amazon, and how it might adapt its strategies to remain competitive.

Running head: STRATEGIC MANAGEMENT
Strategic Management
Name of the Student
Name of the University
Author note

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Introduction
Considering the investing opportunities in the emerging tablet and gadget market, it
can be said that there are several opportunities of earning moiré profits and revenues.
However, it has always come as a surprise to the global market that Amazon has occupied
most of the non-Apple tablet market with their game-changing invention, Kindle Fire. The
product was a new entrant in the global tablet market. Before Kindle Fire, Apple had
occupied most of the market; however, later Amazon and Apple both occupied around eighty
percent of the market share (Hill, Jones and Schilling 2014). In this competitive market,
Amazon brought their unique and innovative device, Kindle Fire, which encompasses and
enhanced experience for the customers with its innovative functionalities and features.
Therefore the target customer segment of Kindle Fire was attracted towards the product as it
reflected the characteristics of a premium quality device, even if it was placed at a
competitive range comparing to the other tablets in the market (Peppard and Ward 2016).
Mostly the Kindle Fire is a product that combines two different products at one time and
created a gorgeous synergy so that the individual customers experience something great.
Within an average price range the device is offering various functionalities to the customers.
Therefore, this essay performs a detailed analysis of the case of Kindle Fire struggle in the
tablet market and their existing market and competitor analysis. The essay will also discuss
their possible strategies in the market and recommendations will be made accordingly.
General environment analysis
While assessing the general environment for the Kindle Fire, it should be noted that
while the product entered the market, there were existing products such as, android tablets
and Apple I pads. The kindle came with comparatively lower prices which cost around $199;
it was not put in the higher group like the other android tablets, yet it was providing all the

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necessary functions. While the other tablets cost around $499 to $799, Kindle offered a all
the facilities in lower prices. Along with that, if the features of the Kindle are compared with
other existing gadgets, the Kindle Fire seemed to be more long-lasting, capable of storing
more contents and more compact (Barney 2014). The device was also connected to the direct
store of Amazon. However, Kindle Fire was not able to meet all the specifications that were
offered by the other tablets and I Pads.
Comparing the Kindle with the other E-readers, it can be seen that the market prices
of the E-reader dropped to a great extent. The prices were less than $100 as an outcome of the
price war after the entrance of Kindle. In such a scenario, the E reader started to offer more
functionalities to the customers such as streaming the video contents, playing games, colorful
display etc. However, at the same time the less prices e readers could not offer maximum
power usages. Even though the screens were coordinated with the eyes while glaring, the
device could only provide primary reading which refers to the simple focus on one specific
task at one time (Hill and Jones 2013). However, the E reader seemed to have a long
productive life than the Kindle. Therefore, it can be seen that within the general tablet and
gadget market, there were huge ups and downs after Kindle Fire enters the market.
Overall it can be said that the Kindle Fire had appeared falling between the tablets and
E-readers on several fronts. Even though the price of the Kindle fire was high comparing to
the E-readers, but it was quite lower compared to the android tablets. If the entire situation is
evaluated with more granular details, it can be said that the positive features of the device
such as more storage area, incorporated text book features, durable and children friendly
features enhance the allover experience of the readers. Other features of the Kindle fire such
as the providing color images, and the enhanced access to the market place of Amazon had
contributed to the popularity of Kindle Fire, mostly due to its durable, compact and tactile
features. As stated by Ede and Ackermann (2013), there have been several researches on the

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fact that even if the device was offering more functionalities and features, it was placed in the
premium range price in comparison to the e-readers. Wheelen and Hunger (2017) has stated
that, it was mostly due to the fact that Kindle was offering more use cases compared to e-
readers such as gaming, video content, accessing applications and several others. However, it
was not really comparable to the quality and breadth of the use cases that were offered by the
existing android tablets. Therefore, the price of Kindle Fire was kept somewhere in between
so that it can be positioned well in the market.
Industry and competitor analysis
The industry and competitor analysis is a major analysis for managing the brand more
strategically. Porter’s five forces model is one of the significant tool that helps to understand
the business environment and its competitive nature, especially this model is more significant
in identifying the possible profitability of the strategies. There are five factors in the model:
Competitive Rivalry
While evaluating the rivalry in the global market, due to constant competitions in the
market, Amazon had to provide a large amount of discount for the original e-books to a
considerable rate. Moreover, due to the price wars, the company had to ensure that they get a
competitive edge in the market. In addition to that, due to increasing competitors in the
market, many organizations had made an attempt for offering all of their contents across
different proprietary platforms; therefore it was quite obvious that the exclusivity started to
increase during the time (Slack 2015). On the other hand, Amazon also did not have the
opportunity like other competitors of having both the digital and physical presence in the
market. Therefore it also impacted the popularity of the Kindle fire. It should also be noted
that the intense competition in the market had also decreased the product life cycle of Kindle
Fire.

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Supplier Power
Amazon has a massive reach to its targeted customer base through different
distribution channels; however, Amazon has also started selling its e-books through various
other platforms such as the android and IOS devices ((Bettis et al 2016). However, it made
the entire situation a little difficult for the consumers who were already using the Kindle Fire
device as they were not being able to access any other content other than the content provided
by Amazon. The prices were reduced to a great extent as well.
Buyer Power
It should be noted that the prices had dropped which eventually boosted the
purchasing power of the buyers. Moreover, they started to switch costs as the other platforms
were offering the similar services in low costs (Gamble and Thompson 2014). Other than
that, the increased numbers of the organizations entering the global tablets and gadgets
market, Amazon had to provide more variety to the customer base as well.
Threat of Substitution
A major threat to the business of Kindle Fire was the traditional book and publishing
industry. Quiet a large customer base does not want to opt for the E-books or Kindle to avail
the conventional brick and mortal approach and buy the physical magazines and books. Other
than that, the satellite and cable TV, DVD, computer, laptops are significant substitutes for
streaming the necessary contents (David and David 2016). The gaming consoles are also
popular alternates for playing games in the tablets. There are also the issue of piracy which
indicates to the illegal downloads of movies, books, music, TV shows and other events that
are available online. Therefore these have made the popularity of Kindle a little down in the
global market.

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Threat of new entry
There are continuous new entries in the tablets and gadgets market, therefore Amazon
always has to offer innovative features and discounts to the customers. The organization
always has to reevaluate their policies so that they do not lose the competitive edge in the
global market.
Internal environment analysis
After introducing the Kindle Fire in the market, it is quite necessary for the brand to
evaluate their internal environment and find out the primary strengths, weaknesses,
opportunities and threats in the market.
Strength
Amazon has a large warehouse space of around twenty five million square feet which
is helpful for the company to produce devices in bunk numbers. Also, Amazon has occupied
around ten percent of the e-commerce market in America which has enhanced their way of
being the market leaders other than Apple. Amazon is also known for their capability of
bringing more innovation to their products. The organization also aligns their long term
interests with that of the stakeholders and the customers. Amazon also provides the facility of
Amazon prime in the Kindle Fire which has helped the company to build a new consumer
base which has motivated the customers to shop first at Amazon (Goetsch and Davis 2014).
Kindle Fire has also increased the level of efficiency of logistics usage of the customers.
Kindle fire also provided convenient options for the users to search different contents and
download them without any wire as well. The company has also convinced the famous
international publishers to digitize their contents. Bergh et al. (2016) also indicated that
Kindle Fire also has a record of being sold out within three hours of its release which also

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brings back the memories of first generation I Pad release. Kindle also has implemented its
supply chain service with a low distribution cost in comparison to the books and any other
content available. In addition to that, Amazon had also used their previous conventional
model with the lower margins with a large delivery scale.
Weakness
After bringing Kindle Fire in the market, Amazon has faced a huge declination in its
stock prices. Amazon has faced around $40 to $45 decline (Ritala, Golnam and Wegmann
2014). Other than that, the device also does not endorse the online sharing of e-books and
magazines.
Opportunities
Kindle Fire has several opportunities in the market as it is one of the most innovative
products with innovative logistics. The product is also associated with the Amazon Web
Service which helps the company to generate more revenues which are growing in a
substantial way. The device also comes with provided service of Amazon Prime which
enhances the chances of customers being more loyal, therefore it also contributes in
increasing the customer base as well (Kantor and Streitfeld 2015). Amazon had known the e-
book market from before; therefore it is much easier for them to make progress in the global
market. The company has also sold the device at a cost that increased the numbers of units
that have been sold which eventually increased the purchased content as well.
Threats
The intense tension between the primary investment of Amazon and the public market
investors can be a serious threat to the business of Kindle Fire. The constant issues with the
digital rights management has also acted as a hindrance to the business. Also, there are

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several new entrances in the market such as B&N which has forced the company to give huge
discounts on Kindle. Amazon has planned to capture the targeted customer base before they
could even think of any other similar products (Goetsch and Davis 2014). On the other hand,
the competitors have already copied the model of Kindle Fire and capitalized it. Another
issue with Kindle is that there is no physical store of Amazon; therefore the company cannot
compete with the free access like the other competitors. Therefore their business faces a
setback here as well.
Strategy Application
The tablet and gadget market is moderately weak. There are difficulties in shielding
the specific designs of the hardware of the tablet as piracy is a major issue for such
organizations. Therefore, the company may use the platform strategy while entering the
market.
Platform Strategy
The word, platform, refers to the atmosphere or the environment which can connect
various groups for deriving mutual benefits. The platform strategy is the approach for
entering the market that tends to revolve around the job of allowing the participants of the
platform and benefit from others’ presence. The conventional competitive strategy indicates
that the consumers can mostly determine their own willingness of paying for the service or
the product in an independent way (Barney 2014). This theory may break down while
comprehending the platform as the participants of the platform, therefore it can be seen that
the participation is mostly interdependent with the other choices of any other users. Therefore
platform strategy requires a discrete tool for helping the managers and the entrepreneurs to
manage the forthcoming challenges of creating and capturing the value. Therefore, it can also
be said that the platform strategy can be very much critical in building the platform. There

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may be several ways for doing that, however a solid and well-organized platform strategy
would help the company to attract customers and makes the technological advancements a
core part of the entire eco system.
The most significant part of the platform strategy is to seed the users. It is quite
difficult at that point as there are possibilities that the strategies can anytime backfire.
Therefore the companies should always have a specific control over its strategies so that they
do not lose focus. Furthermore, the platform strategy is a combination of three specific tools
namely, the toolbox, the magnet and the matchmaker (Ede and Ackermann 2013). The
toolbox is used for creating the connections which makes the entire activity easier for other
people who are plugging into that specific platform. For example, Wikipedia tend to provide
its writers with the mechanism of collaborating with other writers on any article. The magnet
is the one which tend to pull the interested participants to the platform with a social gravity.
When the platform is associated with transactions, both the consumers and producers tend to
achieve the critical mass (Wheelen and Hunger 2017). The match maker is the one that
fosters the value flow with making necessary connections between the consumers and
producers. The correct data is the most significant part of a victorious matchmaking which
also tends to distinguish the platform from any other business model. The matchmaker tends
to capture the data regarding the leverages and participants for facilitating the connections
between consumers and producers. For instance, it can be said that Google tends to match the
demand and supply of the online contents and other marketplaces such as flipkart, ebay ten to
match the relevant products with the buyers.
The platform strategy is very much useful for the business that wants to build a better
customer base. Therefore it can be very much helpful for tracking the requirements of the
customers and reaching them as soon as possible.

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Recommendation
Amazon can utilize this platform strategy as an encouragement of the external
innovators to the organization for adapting the platform of the company as their own and that
may also lead to designing the complementary innovations. For instance, Google, Microsoft
and in the recent times Facebook has started uing their API or Application Programming
Interfaces for allowing others in developing the applications which is capable of interacting
with the products. Apple has also used this strategy in their Iphone, Ipod and Ipad with
leveraging the Itunes. Every hardware products are made of valuable external media contents
that the Itune offers. Therefore Apple can also share their revenues with the owners of the
content. Therefore, Amazon can amass a great amount of external contents for offering to the
Kindle Fire. However, initially they may not be capable of sharing the revenues with the
providers of the contents like Apple does, however it will not lose money in the
manufacturing the devices. If Amazon turns the Kindle Fire and Amazon prime into the
platforms, they may be capable of delivering a huge range of digital media contents.
Therefore they can easily get a competitive advantage in the tablet and gadget market.
Platform leadership is another concept which consists of the scope and relationship
with the complementors. According to Slack (2015) Amazon has previously defined the
scope as the method of enhancing the performance of the device and the experience of the
users with Kindle Fire. In place of using the Android browser, Kindle can develop its own
browser which will further allow the flash content delivery, high speed streaming and smooth
integration with other devices.
Kindle Fire can also develop a different application, especially for this device, for
operating. This application will allow the users to access a huge range of books that have
already been accessed by the Iphone and Ipad users. Therefore, with the own platform,

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Amazon will have a beneficial relationship with the complementing entities. It will also help
them to get a competitive edge in the market.
The Kindle fire can also use a modified version of the operating system of android,
therefore it will have a small gateway to the android market as well. With this strategy,
Amazon will be capable of having a controlled and distinct user interface which can keep the
processing speed and memory integrated. Other than that, it will also allow the organization
to operate the android applications in a smooth way and it can also offer the applications in a
new way through the android market. A modified OS can work smartly as it will allow the
kindle fire device to close and open at the same time. Therefore the users can enjoy such
added facilities with the Kindle fire device.
Even though creating an own browser for mobile can be very much effective,
therefore may be issues with it as well. However, Amazon can also increase the potentiality
of Kindle fire with network externalities. The company can enjoy the indirect networking
effects from the developers of the application; therefore the platform can get access to more
users. Utilizing the indirect networks from thee advertisers, content providers and developers
can bring the content delivering platform to a new direction.
Conclusion
In conclusion it can be said that, if Amazon Kindle Fire opts for such strategies, they
can compete with other brands in the global market. Therefore, in this way the Kindle Fire
can become a significant player in the market.

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