Innovation and Sustainable Business Development

This report explores the concept of innovation and sustainable business development, with a focus on Amazon. It discusses the company's innovative strategies, capabilities, and the impact of innovation trends on its success. Recommendations for Amazon's future innovation efforts are also provided.

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INNOVATION AND SUSTAINABLE BUSINESS DEVELOPMENT
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4/26/2019

INNOVATION AND SUSTAINABLE BUSINESS DEVELOPMENT 1
Executive summary
Amazon case would be considered in the report to understand the innovation used by the
company. Amazon is one of the leading electronic commerce companies serving the globe with
every possible consumer goods. Amazon is a design thinking company, the reason being the
company vision, mission and objective is to understand the customer needs and provide the
products to fulfil their needs. Organizational environments are the factors or forces surrounding
company that will influence the operations, resources, and performance of the company.
Amazon is found to be a titan in the industry when it comes to innovation capability and
sustaining innovation through rapidly trying for evolution and improvement like from selling
books to prime films, streaming music, every electronic consumer products, and best services to
enhance the customer experience. For amazon, innovation is the core application in the
organisation. The company has been innovating since the beginning and in every aspect. For
example, the Amazon plan for technological innovation has resulted in the reinvention of the
business model. Physical stores, technological updating, and backward integration are the major
opportunities for Amazon impacted through innovation.

INNOVATION AND SUSTAINABLE BUSINESS DEVELOPMENT 2
Contents
Executive summary.........................................................................................................................1
Introduction......................................................................................................................................3
The organisational environment......................................................................................................3
Innovation trend...............................................................................................................................4
Innovation strategy..........................................................................................................................4
Innovation capabilities.....................................................................................................................4
Innovation value creation and capture.............................................................................................5
Innovation and strategic alignment..................................................................................................6
Impact of innovation trend on Amazon...........................................................................................7
Recommendations............................................................................................................................9
Conclusion.......................................................................................................................................9
References......................................................................................................................................11

INNOVATION AND SUSTAINABLE BUSINESS DEVELOPMENT 3
Introduction
Innovation in an organization can be responsible for the success or failure of an organisation.
Two key approaches have acknowledged more prominence. It includes the method of an
organization to innovate that is lean start up and design thinking. In the report amazon case
would be considered to understand the innovation ay used by the company (Ahlin, 2014).
Amazon is one of the leading electronic commerce companies serving the globe with every
possible consumer goods. It is one of the leading companies in the industry and the reason is
innovation. Amazon is a design thinking company, the reason being the company vision, mission
and objective is to understand the customer needs and provide the products to fulfil their needs.
Design thinking approach includes establishing the requirement for the service or products,
identifying the customer’s problem, instead of just providing them with the developer’s vision
created solution (Liedtka, 2018). Therefore, it can be said that this is the approach that led the
entrepreneurs to understand the customer requirements, prior to entering inexpensive
development stages (Alves & Sousa, 2018).

INNOVATION AND SUSTAINABLE BUSINESS DEVELOPMENT 4
The organisational environment
Organizational environments are the factors or forces surrounding company that will influence
the operations, resources, and performance of the company. This may include all the elements
inside the organization and outside the company’s boundaries and can impact an organization in
some or the other form (Bruns, 2013).
Amazon organizational internal environment includes the innovative and punishing culture of the
company. The company is promoting innovation and customer-centric environment, but also
promote a competitive environment that includes punishments as well (Amazon, 2018).
Innovation trend
As already identified, Amazon is a design thinking company with most leadership principles
include customer obsession and another one is invented and simplify. The company has not been
the focus over the beautiful web store instead; the company has been focused on simplicity of
process, functionality, and experience. The reason for the amazon’s design success is that it
applies four major principles that are transparent, tangible, trustworthy, and help to enhance the
customer experience through the web store (Biemans, 2018).
Innovation strategy
Innovation strategy is the framework to identify what is the level of innovation that an
organization is willing to invest. In general, three types of innovation strategy are product
innovation, process innovation, and business model innovation (Liedtka & Ogilivie, 2011).
Considering amazon business, the company has been initiated through innovative product

INNOVATION AND SUSTAINABLE BUSINESS DEVELOPMENT 5
development that is online bookstore and Kindle. Moreover, the company has found to be the
first mover when it comes to Ecommerce industry, which indicates that the company has adopted
the digital innovative strategy. Technology is the key in ecommerce business of amazon
reflecting the innovation through the business model. Moreover, considering the types of
innovation, the company has adopted proactive innovation and due which the company has
gained first mover advantage (Amabile & Rigolizzo, 2015).
Innovation capabilities
It is ability of an organisation to transform an innovative idea into an element that is new and
have economic value. Innovation capability has major influence over the marketing innovation
and process innovation. This is the ability of the company to apply technological resources,
process, methods, and techniques to create and continue an innovative offering. Amazon is found
to be a titan in the industry when it comes to innovation capability and sustaining innovation
through rapidly trying for evolution and improvement like from selling books to films, streaming
music, every electronic consumer products, and best services to enhance the customer
experience. The company separates itself from major competitors through products like echo,
kindle etc. the company is not afraid to enter into new market or industry. for instance the
company initiated through book selling and now have entered into grocery items as well.
Amazon, at time goes against the grain for instance the company has opened brick and motor
store as well in New York City. Most importantly, amazon put the customer on priority and
efforts to fulfil their needs (Camison & Fores, 2016).

INNOVATION AND SUSTAINABLE BUSINESS DEVELOPMENT 6
Innovation value creation and capture
This includes implying innovation in an organization to create value to the customers, more
value to the customers reflect more customer satisfaction. Amazon is quite popular to create
value to the customer through improving technology and services speed. For instance, one of the
popular innovation at Amazon includes a delivery system and tracking system of the company.
This is also integrated with amazon prime. This is the process, through which the company has
been able to reach out to the customer with their package in one or two days. This is to enhance
the experience of the customer and having the product on time and customers were able to track
their packets on a real time basis. Moreover, the amazon prime is the membership product for the
customer that has to be purchased by the customer for a year with additional benefits of free
delivery with no minimum order and prime videos availability (Coulson-Thomas, 2017).
Key partners
 Customers
 Distributor
s
 Suppliers
 Communit
y
 Shareholde
rs
 Directors
 Senior
manageme
nt
 Employees
Key activities
 Technology
updating
 Sales
promotion
activities
 Delivery
methods
improveme
nts
Value
propositions
 Custom
er
satisfact
ion
 Increase
d
service
 Enhance
d
experien
ce
Customer
relationships
 Custom
er
database
 Email
marketi
ng
 Custom
er
engage
ment
 Custom
er
feedbac
k
Customer
segments
 All
income
group
 Technic
al
adaptive
custome
r
 Busines
s
persons
Key resources
 Human
resource
 Technologi
cal
infrastructu
re
Channels

INNOVATION AND SUSTAINABLE BUSINESS DEVELOPMENT 7
 Supply
chain
Cost structure
 Cost in delivery system
 Cost in technology development
Revenue streams
 Increase in sales
 Increased profit (Decrease in cost of factors
of production)
 Business partners like retailers (provided
platform to conduct business through
Amazon)
Innovation and strategic alignment
The most critical aspect of innovation is to have a clear strategy of the company and the
integration of innovation with the strategic direction of an organization. This can be done
through innovation and corporate strategy framework that includes five w’s that is why to
innovation, what is to be created, where to innovate that is which market to innovate and when is
the right time to innovate. Lastly, how to innovate which includes techniques and tools to be
used for innovation (Dewald & Osiyevskyy, 2015).
For amazon, innovation is the core application in the organization. The company has been
innovating since the beginning and in every aspect. For example, the Amazon plan for
technological innovation has resulted in the reinvention of the business model. The relevance of
business model innovation includes a disruptive new business model to gain a competitive
advantage. Amazon had identified a new channel to reach out to the customer while using
technology and elimination of old school distribution channel. The company included “I click
check out” features have helped amazon to accelerate transaction while eliminating the
requirement for manual billing system and shipping info for each purchase. Through the
development of online shopping stage, the company has reinvented radically and have
considered the fundamental factors of the ways the customer purchase. All the innovation by the

INNOVATION AND SUSTAINABLE BUSINESS DEVELOPMENT 8
company has been aligning with the core business strategy that is customer satisfaction and
creating value to the customers as it makes the prices for the products lower as possible through
technological updation.
Integrating the business strategy with innovative strategy is very relevant because it may result in
unsatisfactory outcomes. The result of the innovation would be not satisfied with the company in
case it is not aligned with the company’s strategy. The cost to the company could increase, as the
innovation for wrong reasons would be identified. This would eventually be of no use to the
company but consume time and cost to the company (Du & Bstieler, 2016).
Impact of innovation trend on Amazon
One of the strategic tools that can be used to analyse the impact of innovation trend over
Amazon would be the SWOT analysis of amazon
Strengths
 Customer oriented – the company to create value for the customer does the innovation.
This has resulted in enhanced customer satisfaction.
 Cost leadership – The technological innovation of amazon has resulted in cost leadership
that I the company is able to lower down the cost of the product by increases the product
sales and enhanced distribution system (Ding, 2018).

INNOVATION AND SUSTAINABLE BUSINESS DEVELOPMENT 9
 Differentiation - The Company has been able to increase the product variety through
innovation trends like Kindle, and new product offering like grocery products, and other
consumer fashion and electronic products.
 Superior distribution system – The distribution center has been improved due to
technological innovation by Amazon like drone innovation, which has increased, the
tracking system in distribution and ability to deliver goods within a day or two.
Weakness
 Limited brick and motor – The Company due to only digital innovation have resulted in a
limitation in the traditional form of a store that is physical store.
 Product failures - some of the product innovation has not been successful of amazon,
which is the weakness due to innovation like Fire phone in the US was a total flop and
Kindle fire device was also an example that failed.
 Imitable business model – Amazon is the first mover but the innovative business model
of the company is easily imitable (Du & Bstieler, 2016).
Opportunities
 Physical stores – The company can enhance the footprint in brick and motor as well, that
could be impacted through business model innovation.
 Technological updating – The company can improve technology with time to keep
evolving new idea and ability to reduce the cost to the company in the long run and
enhance customer satisfaction.

INNOVATION AND SUSTAINABLE BUSINESS DEVELOPMENT 10
 Backward integration – The company can bring innovation in business model and
integrate backward with the suppliers and can gain some products or acquire suppliers
business to gain competitive advantage (Gilson et al., 2015).
Threats
 Increased competition – Competitors like ali express, eBay, and Flipkart has enhanced
the use of innovation for Amazon to a greater extent.
 Cybercrime risk – The technological innovation can reduce the security for the customer.
For instance, cybercrime has increased.
 Technology degradation – Technology is changing rapidly, which increase the cost to the
company due to quick can obsolesce of technology (Osterwalder & Pigneur, 2010).
Recommendations
 Amazon must pursue product innovation – The company must pursue with product
innovation and differentiation strategy to attract more and more customer and fulfill the
needs of the customer to enhance the customer satisfaction and keep the innovation in
align with company’s strategy
 Customer feedback – The company can organize their innovation activities and
understand if the innovation is creating value to the customer by considering customer
feedback seriously and working upon them.
 Customer engagement – The company strategy is to fulfill customer needs and to keep
innovation in line with organizational strategy. It is recommended for the company to
develop services and product through customer engagement and customized products.
Moreover, innovation is getting new ideas from everywhere and for amazon customers

INNOVATION AND SUSTAINABLE BUSINESS DEVELOPMENT 11
are the most important stakeholders, which make this suggestion more justified for
Amazon.
 Service innovation – Other than technological innovation, the company can increases
innovation capability through service innovation. The company can add pick up facilities
for the customers, and specific time delivery options and other innovative ideas to
enhance the services by Amazon.
Conclusion
From the report, it can be concluded that Amazon is one of the leading electronic commerce
companies serving the globe with every possible consumer goods. Amazon organizational
internal environment includes the innovative and punishing culture of the company. Amazon is a
design thinking company with most leadership principles include customer obsession and
another one is invented and simplify. Design thinking approach includes establishing the
requirement for the service or product, identifying the customer’s problem, instead of just
providing them with the developer’s vision created solution. Amazon is quite popular to create
value to the customer through improving technology and services speed. For instance, one of the
popular innovations at Amazon includes a delivery system and tracking system of the company.
The most critical aspect of innovation is to have a clear strategy of the company and the
integration of innovation with the strategic direction of an organization. For amazon, innovation
is the core application in the organization. The company has been innovating since the beginning
and in every aspect.

INNOVATION AND SUSTAINABLE BUSINESS DEVELOPMENT 12
References
aboutamazon., 2018. Success stories. [Online] Available at:
https://www.aboutamazon.com/supporting-small-businesses/success-stories.
aboutamazon, 2018. Innovation. [Online] Available at:
https://www.aboutamazon.com/innovation.
Ahlin, B., 2014. Entrepreneurs’ creativity and firm innovation: the moderating role of
entrepreneurial self-efficacy. Small Business Economics, 43(1), p.101.
Alves, A. & Sousa, P., 2018. Implementation of project management and lean production
practices in a SME Portuguese innovation company. Procedia computer science, 138, p.867.
Amabile, T. & Rigolizzo, M., 2015. Entrepreneurial creativity: The role of learning processes
and work environment supports. The Oxford handbook of creativity, innovation, and
entrepreneurship, p.61.
Amazon, 2018. aboutamazon. [Online] Available at: https://www.aboutamazon.in/?
utm_source=gateway&utm_medium=footer.
amazon, 2018. Enhance your Amazon experience with Prime. [Online] Available at:
https://www.amazon.com/amazonprime?_encoding=UTF8&%2AVersion%2A=1&%2Aentries
%2A=0.
Biemans, W., 2018. Managing innovation within networks. London: Routledge.
Bruns, P., 2013. Corporate Entrepreneurship: Innovation and Strategy in large organisations.
3rd ed. london: Palgrave MacMillan.

INNOVATION AND SUSTAINABLE BUSINESS DEVELOPMENT 13
Camison, C. & Fores, B., 2016. Does incremental and radical innovation performance depend on
different types of knowledge accumulation capabilities and organizational size? Journal of
Business Research, p.831.
Coulson-Thomas, C., 2017. Stimulating creativity, enabling innovation and supporting
entrepreneurship. Management Services, 2017(Summer), p.26.
Dewald, J. & Osiyevskyy, O., 2015. Explorative versus exploitative business model change: the
cognitive antecedents of firm‐level responses to disruptive innovation. Strategic
Entrepreneurship Journal, p.58.
Ding, K., 2018. Platforms, innovation and capability development in the Chinese domestic
market. The European Journal of Development Research, pp.1-16.
Du, S. & Bstieler, L., 2016. Sustainability, social media driven open innovation, and new product
development performance. Journal of Product Innovation Management, 33, p.55.
Gilson, P.W., Lim, H.S. & Gilson, L.L., 2015. 11 Creativity in Teams: A Key Building Block for
Innovation and Entrepreneurship. The Oxford handbook of creativity, innovation, and
entrepreneurship, p.177.
Liedtka, J., 2018. Why Design Thinking works: It addresses the biases and behaviors that
hamper innovation. Harvard Business Review, 96(5), pp.72-79.
Liedtka, J. & Ogilivie, T., 2011. Designing for growth: a design thinking toolkit for managers.
New York: Colombia Business School Publishing.
Osterwalder, A. & Pigneur, Y., 2010. Business Model Generation. New Jersey: Hoboken.

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