Impact of Design Thinking on Amazon's Innovation Strategy

Running head: INNOVATION STRATEGY
INNOVATION STRATEGY
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1INNOVATION STRATEGY
Executive summary
The purpose of this report is to analyze the impact of the advances of design thinking
movement on the chosen company Amazon. It introduces Amazon and describes the innovation
trend initiated by Amazon. It defines and describes the organizational environment, the
innovation trend, innovation strategy, innovation capabilities, value creation and value capture
theories of Amazon. It describes the creation of innovation strategy and ensures strategic
alignment within Amazon and analyzes its importance. Further, the report analyzes the impact of
the innovation trend on Amazon and analyzes the opportunity and threat faced by the
organization. It used the business model canvas of Amazon to support the analysis. It
recommends ways to organize the innovation activities of the organization, determines the
additional innovation capabilities and initiatives to be pursued by the company. It recommends
ways to ensure value creation by the company and recommends the way to better ensure strategic
alignment with the innovation trend. Lastly, it concludes that the innovation trend adapted by the
company has led to its success. However, it must further enhance its innovation and service
provided and continues innovating its products to face the fierce competition.

2INNOVATION STRATEGY
Table of Contents
Introduction to innovation trend in Amazon...................................................................................3
Impact on Amazon by the advances of design thinking..................................................................3
Innovation strategy, capabilities and initiates of Amazon...............................................................4
Importance of innovation strategy and its alignment with business strategy..................................5
Innovation impact on Amazon.........................................................................................................6
Recommendations............................................................................................................................8
Recommendation to ensure strategic alignment..............................................................................8
Conclusion.......................................................................................................................................9

3INNOVATION STRATEGY
Introduction to innovation trend in Amazon
Amazon is the largest American e-commerce company which was founded in the year
1994 by Jeff Bezos, it is also known as the ‘cloud computing giant’ originally known for offering
books through its own website (Baden-Fuller & Haefliger, 2013). The company has enabled its
website which allows its customers to offer everything starting from clothes to furniture. Further
its offers digital contents including music, apps and movies. Amazon is a multibillion dollar
provider of cloud based services for its millions of customers all across the globe. Unlike other
companies like Apple, Microsoft, Google, Amazon is not fixated on its tightly designed apps and
other services (Carayannis, Sindakis & Walter, 2015). Some of the company latest innovation
trends have changed the entire world. The innovations brought in by Amazon have changed the
lives of its customers. One such innovation is Kindle e-books. Amazon has provided to its
customers a quick, convenient and the most affordable ways to get books (Johnston, & Bate,
2013). The company works to put the Kindle in many customers as possible with an affordable
pricing. With this innovation, the company took full control over the e-market. It has
successfully become the destination for purchasing books and contents. Amazon has championed
the mass marketing with the introduction of Kindle Amazon. The recent developments in the
technology of e-books have opened a new source of revenue for the authors and publishers. It
provides an easy and convenient way to launch the e-books by authors and publishers.
Impact on Amazon by the advances of design thinking
Amazon is considered to be the most significant force of digital transformation. The role
of design thinking has played a vital role for the success of the company. The two principles