Innovation and Sustainable Business Development

Running Head: Innovation and Sustainable Business Development 1
Innovation and Sustainable Business Development – Amazon.com
Student Name
Student Code
Subject Name
Subject Code
Date

Innovation and Sustainable Business Development 2
EXECUTIVE SUMMARY
In the world of online retailing, Amazon.com has emerged as an innovative organisation headed
towards long-term sustainability. Apart from its business model, there are several factors that set
Amazon online retail services apart from the rest. This report will analyse different innovation
strategies and business model practices that have given Amazon.com a competitive edge in the
online marketplace. The paper will explore different segments and innovative ideas that drive the
sustainability of the company. Additionally, a few recommendations are provided to avoid
disruption innovation by Amazon.com in the coming years.

Innovation and Sustainable Business Development 3
CONTENTS
Introduction......................................................................................................................................4
Business Overview..........................................................................................................................4
Innovation at Amazon.com..............................................................................................................5
Organisational Strategy................................................................................................................5
Business Model................................................................................................................................5
Business Model Canvas................................................................................................................5
Business Model Evolution............................................................................................................7
Coopetition-Based Model................................................................................................................7
Amazon.com Digital Strategy Triangle...........................................................................................8
Disruptive Innovation......................................................................................................................8
Building Online Trust and E-Loyalty..............................................................................................9
Online Competition.........................................................................................................................9
Psychological factors....................................................................................................................9
Perceived Value..........................................................................................................................10
Inertia..........................................................................................................................................10
Convenience Motivation............................................................................................................10
Computer Knowledge Experience..............................................................................................10
Pricing........................................................................................................................................10
Recommendations and Conclusion................................................................................................11
References......................................................................................................................................12
Appendices....................................................................................................................................15
1..................................................................................................................................................15

Innovation and Sustainable Business Development 4
B.................................................................................................................................................16
C.................................................................................................................................................17
4..................................................................................................................................................18
5..................................................................................................................................................19
6..................................................................................................................................................20

Innovation and Sustainable Business Development 5
INTRODUCTION
The power of the Internet has caused numerous businesses to evolve and transform the way they
look at innovation and sustainability over the years. Retail businesses are attempting to become
more vigorous in their online strategies more than ever, owing to the increasing competition in
attracting online customers and higher sales in the long run. In this aspect, Amazon has created
several benchmarks in being innovative and focusing on sustainable business development since
its inception in 1994 As one of the largest e-tailers in the world today, Amazon.com with its
online shopping and retailing businesses has observed an exponential growth over the years.
Currently, the company’s online revenue stream stands at $131 billion in 2018 (Appendix 1).
This drastic growth of Amazon.com is largely contributed by the company’s innovative and
sustainable business models, along with unique strategies and approaches that have made the
company the most trusted marketplace in the online world. As leaders in an innovative business,
Amazon.com with its identified business segments and value-proposition model has headed
towards creating a sustainable position in the online market (DaSilva & Trkman, 2012).
BUSINESS OVERVIEW
Amazon.com is identified as the most successful online company and the largest online
marketplace for consumers. Over the years, Amazon has seen to shift its focus to establishing
and growing its online marketplace to encourage customers into online purchases (Chen & Chou,
2012). This has led to the company increasing its attention on customer needs and experiences,
value propositioning and capturing, and disrupting online technology to expand and improve its
business model.
INNOVATION AT AMAZON.COM
There are several aspects that can define Amazon.com as one of the most innovative companies
in the world (Almirall, Lee, & Majchrzak, 2014). Apart from an innovative business model, a
flexible and adaptive organisational strategy combined with collaborative strategies and

Innovation and Sustainable Business Development 6
customer-oriented approaches have given Amazon.com a competitive edge in the online market
in terms of pricing, value, selection, convenience, and easy fulfillment solutions (Appendix 2).
ORGANISATIONAL STRATEGY
The organisational structure of Amazon.com is led by value-based resources, i.e. talented and
skilled employees, management, and specialists. Not only has a highly-skilled labour resource
enabled innovation and sustainability approaches within the business ecosystem but has also
improved technological and information system implications for the company (Blank, 2013).
Most of the operations and functions of the Amazon online marketplace is conducted through
research and development practices, product development, human resource development, and
technological improvements (Sorescu, Frambach, Singh, Rangaswamy & Bridges, 2011). With
proven and effective value chain operations and operational efficiency throughout the corporate
structure, the online retail company has managed to expand its range of products and services
across different geographies and demographics of consumers online, which currently acquires
the largest online market share (Appendix 3).
BUSINESS MODEL
BUSINESS MODEL CANVAS
The Business Model Canvas of Amazon.com has helped capture a large segment of online
customers and drive huge sales and profits for the overall organisation. The Key Activities of the
company include a consistent focus on customer expectations by offering affordable products
and services through innovation, which in turn, is driven by the Key Resource of the company,
i.e. financial, human, physical, and intellectual resources. The primary reason behind the online
retailer’s growth has been to acquire and explore new markets and investments through sales
profits defining the online company’s Key Partnerships (Rivet, 2017). While maintaining
competitiveness in the online industry, the Cost Structure and Value Propositions of the company
have immensely contributed to expanding its customer base around the world while striking a
balance in its operating expenses and prices offered on products and services to customers. The
ability to offer value, despite the most affordable costs on online products and services, gives