Formulating a Business Strategy for Amazon's Entry into the Australian Market

The assignment content provides information on how to start a business in Australia. It recommends cost leadership strategy, explains the entry mode as Greenfield corporation, and discusses segmentation, targeting, and positioning of the company. The provided references are academic papers and online articles from reputable sources.

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Global Marketing

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Table of Contents
Introduction......................................................................................................................................3
Objectives........................................................................................................................................4
Recommended Strategy...................................................................................................................6
Market Entry Mode..........................................................................................................................7
Segmentation, targeting and positioning strategies.......................................................................10
Table 1: Showing segmentation, targeting and positioning Source Dudovskiy, 2017..................11
Conclusion.....................................................................................................................................12
References:....................................................................................................................................13

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Introduction
This report is about the global marketing of Amazon. Amazon is one of the undisputed leaders in
the online retail store. Global marketing takes place when managers of marketing department use
a global plan to successfully market their goods and services on a worldwide basis. Only 10%
manufacturing organization in the U.S. take part in actually exporting their products. There is a
huge chance for any U.S. corporation looking to partake in global marketing. (Lombardo, 2017).
It is helpful to increase the sale and reach of your product. Global marketing provides the facility
to known the product globally. Amazon is US based company. It is an online retail store, where
customer gets opportunities to buy the product through Amazon website and can choose from the
various products. Amazon will deliver the product (Paliwoda, et. al., 2013).
However, Amazon is not the first company in E-commerce but they have capitalized their
resources very well and having the huge satisfying customer base. The report focus on the
objectives of the Amazon because mission of the Amazon is to maximize their satisfied customer
base and that will help to reach their vision. The report also discusses about the various strategies
used by the Amazon to enter into the Australia market. It the last, report focuses on the market
entry mode and STP respectively.

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Objectives
Mission Statement
Amazon’s mission statement is as follows: “We strive to offer our customers the lowest possible
prices, the best available selection, and the utmost convenience.” The mission statement of the
company states that company’s prime objective is to provide customer the best lowest price in
comparison to others and company offers the best available selection and at last, the utmost
convenience (Babnik, et. al., 2014).
Importance of Mission statement:
It determines the company direction = business owners utilize this declaration to remind their
team members why their business exists because this is what creates the business victorious.
It focuses the company’s future = mission statement gives guidance to the company and plans
accordingly to achieve mission, which will be helpful in achieving the vision of the company.
It offers a pattern for decision-making = a clear mission statement gives managers to take
decisions accordingly to implement the mission successfully (Babnik, et. al., 2014).
Importance of Corporate Objectives:
A company plan cannot live without objectives much in the same way as the company itself
cannot survive without knowing its purpose or intention. Actions and strategies are dictated by
company objectives this makes it very important for the business owner as well as employees to
fully recognize and align their work to objectives (Jensen, 2010).
Company must work according to the objectives because this gives the direction to work upon
and accordingly strategies will be making.
SMART objective of the Amazon are:

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In 2017, Amazon expects to generate profits of nearly $170 billion. Amazon is targeting to
capture a 20% share in Australia’s e commerce market, it is planned to generate around $6
billion from this market. 15% gain share of the 15-50 year female segment for apparel and
personal care products by 2020. Target to gain eight percent share of the 15- 35 yr male segment
for personal care products by 2020. Company’s objective to grab 20% market shares in Australia
among total market share of e commerce companies. These targets are having high focused to be
achieved to catch high market share in Australia. (Forbes, 2017).

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Recommended Strategy
Michael porter’s model of generic strategy helps the Amazon.com for competitive advantage,
which helps the company to develop the business in the middle of tough competition in the e
commerce. Amazon is doing really well in their existing countries and generating good revenue
through online retail store. While the leader in the online retail market, Amazon proves to be
extremely competitive in the market against giants like Walmart. Amazon has successfully
managed to grow their business and expand their business globally this is all done because of
their intensive growth strategies. The growth in the international market shows the business plans
of the Amazon and it show that a company, which is based in USA and started their work in
USA but now Amazon operates globally and expand their reach globally (Porter, 2011). The
reason behind the success of Amazon globally is that they have effectively implemented their
intensive growth strategies and a generic competitive strategy that helps them to compete with
their competitors and help in sustain in the market.
Now company is entering into the new country Australia. So company again analysis the generic
competitive strategies that help them to operate their business in Australia. There are various
types generic competitive strategies, company choose one strategy primary and follow the rest
strategies partially to be successful and competitive in the market (Porter, 2011).
Generic Strategy (Michael Porter’s Model)
Cost Leadership
The concept of cost leadership is developed by Michael Porter and utilize in business strategy. It
explains a method to set up the competitive advantage. Cost leadership means the lowest cost f
operation in the industry. Cost leadership is regularly determined by company size, scale, scope,
efficiency and cumulative experience. As company is entering into Australian market so it is

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important for the company to control their cost because it is new market for the company and
company is starting their business there. Therefore, company need to control their cost from
starting and work with efficiency helps the company to control the cost and increase in the profit.
Efficiency working will help the company to reduce cost because less work means no extra cost
and affect on the margins of profits, which will help the company to compete with competitors
by lowering the price of the product (Datta, 2010).
Company aim is to minimize the operational cost as much they can because high operational cost
can reduce the profit margin and it affects the expenses side. To minimize operational cost,
company objective is to use superior computing and networking equipments that helps in
increasing the operational efficiency. Company knows the nature of e-commerce and they know
they will earn profit from process mechanization that usually used in purchase processing, setting
up and other operational procedures. These advantages allow Amazon to minimize their cost and
increase their operational efficiency in the online retail (Porter, 2011).
Differentiation strategy = this strategy is used by the business to make a unique product or
services which consumer will find better than others will. The strategy is used to differentiate the
product or service of your company from the competitors (Boehe, et. al., 2010).
Focus Strategy = Developing, marketing, and selling the products to niche market, by focusing
on the particular customer segment, particular product line for that segment or a targeted
geographical area. The objective of the focus strategy is to become the market leader in a
particular customer segment by providing them high quality product or services (Porter, et. al.,
2010)

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Market Entry Mode
Amazon is planning to enter into the Australian market. It is very important for the company to
decide the correct entry mode in the market because correct entry mode will affect your business
positively and helps in reducing the cost too. However, if company choose wrong way to enter
into the market it will affect the business negatively that will influence the revenue and increase
the expenses for the company. To enter into a new market will incur a lot of money for the
money so it is very important for the company to take the right decisions over it (Laufs, et. al.,
2014).
There are various market entry modes, which are as follows:
Joint Ventures = a joint venture means where two or more than two parties come together and
uses their resources to achieve a specific work. The work can be classified into two categories it
can be new project or other business activity. In joint venture, both the parties are agreed to share
all profit and losses. (Deitz, et. al., 2010)
In this case Amazon can joint venture with establish firm of Australia who has strong customer
base and having a good indentify in Australia.
Advantages:
1. Good customer base
2. Low cost of entry
3. Developed supply chain
Disadvantages:
1. Sharing of profit
2. Decision making process

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Licensing = It means Amazon authorize the any firm of Australia to use their name and start the
business of online retail using the name of Amazon over a period and the profits will be shared
by both the firms which they decide in the contract.
Advantages:
1. No extra cost of establishing business or operations.
2. Easy entry
Disadvantages:
1. It may the goodwill of the company
2. Less authority of control
Greenfield operation = Greenfield corporation means where a company decides to manufacture
their own plant in the foreign or other country where they want to start their business by using
their own capital. (Womack, et. al., 2010)
Advantages:
1. Full authority in decision-making
2. No restriction in implementing their own policies
Disadvantages:
1. Lot of money requires
2. Fulfilling all the legal requirements of the country.
For market entry mode Greenfield operation will be best for the Amazon to entry in the Australia
market. This entry mode will be beneficial for the Amazon because in this mode there is no
interference of others. They have the full right in taking decisions and company can implement
the strategies of their choice. The only disadvantage of this entry mode is lot of money required

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to set up all the required things but that will affect positively in near future. Amazon can plant
their own warehouse and store the purchased items and afterwards will deliver according to the
order of the customers (Brouthers, 2013).
This entry mode will be more beneficial for the company because Australia is big market and
company is looking to grab that market. Somewhere this mode involves lot of money at the
initial stage in developing whole set up like offices, warehouses, supply chain management etc.
but this mode also gives the benefit of commanding the whole project, no interference of others.
Like in other mode decisions making becomes complicated. Establishing own business unit will
lead to high profits in long run (Brouthers, 2013).
Segmentation, targeting and positioning strategies
Segmentation
Segmentation is the first process in the STP. Amazon can start with segmentation process by
selecting the base for segmentation. The criterion for segmentation for Amazon is that they are
focusing on every age group from newly born baby to old age. We also focus on lowest prices
for the products offered. As the work of Amazon is, depend on technology, so age might be an
outstanding segmentation aspect. This is because the young people are more technology friendly
while compare to old age people then company should select the segment descriptor (Strauss,
2016).
Targeting
While selecting the market segments Amazon must considers several factors. One of the major
considerations that Amazon looks into is that the market segments fits into the company
objectives. Objective is not a term but it defines an organization overall and their responsibility
towards society and decisions of the company must be in line with objective of the company.

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Another aspect that company needs to consider the size of the segment. The size of the segment
will classify the profitability of the segment. It is important for Amazon to take considerations on
the several competitors available under the segment (Strauss, 2016). Company does business
with websites it owns applications and some stores, from where orders can be placed. It helps the
company to target the customer more effectively and due to 24x7 availability of the products
results to increased customer base and company portfolio.
Positioning
Last but not the least in the process is Positioning. It is important for the company to understand
the market and the way the competitor’s brands are positioned. Understanding the market means
company should discover the both intangible and tangible advantages, which customers are
looking for. The Amazon wishes to recognize characteristic of its goods that the consumers
consider as essential. After understanding, the market Amazon should design their product and
communication approaches (Strauss, 2016).
Table 1: Showing segmentation, targeting and positioning Source Dudovskiy, 2017.
Type of
segmentation
Segmentation
criteria Amazon target customer segment
Geographic
Urban Yes
Demographic
Rural Yes
Age All age group
Behavioural Gender Both ( Male and Female)
Occupation Professionals, Employees, Students
Personality Easy going, ambitious and determined

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Degree of
loyalty Hard core loyal, Switchers, Soft core loyal
Benefits
sought
Widest range of products, competitive prices, convenience
of online purchase
Psychographic
Social class All social class (lower, middle, working and upper class)
Lifestyle Resigned, Mainstreamer, Aspirer, Explorer
Reformer

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Conclusion
The report will be helpful in understanding the importance of international marketing. As
company is entering into new country and in a different market, this report will help in
understanding the importance of mission statement that will help the company in talking decision
accordingly to achieve their objectives. In the next stage, cost leadership strategy will be
recommended to the company while starting business in Australia. Then the entry mode in the
market is explained where company should follow the Greenfield corporation mode because it
gives the fully command facility on the project. At last, segmentation targeting and positioning
of the company is explained through the table format.

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References:
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Boehe, D. M., and Cruz, L. B. (2010). Corporate social responsibility, product differentiation
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Brouthers, K. D. (2013). A retrospective on: Institutional, cultural and transaction cost influences
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trust. Industrial Marketing Management, 39(5), 862-873.
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Jensen, M. C. (2010). Value maximization, stakeholder theory, and the corporate objective
function. Journal of applied corporate finance, 22(1), 32-42.

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Kleiner, M. M., and Krueger, A. B. (2010). The prevalence and effects of occupational
licensing. British Journal of Industrial Relations, 48(4), 676-687.
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sized enterprises: A systematic review and future research agenda. International Business
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