International Business Strategies in a Globalizing World| Assignment

INTERNATIONAL
BUSINESS
STRATEGY
CASE STUDY OF AMAZON
STUDENT DETAILS
2020

INTERNATIONAL BUSINESS STRATEGY 1
Executive Summary
The E-commerce industry is preferred as the industry in which a business can easily
expand its operations and with minimum capital requirements. Amazon is among the
leaders in the global e-commerce industry. The organisation effectively develops
strategies to improve its performance within the international market, also Amazon
has focused on developing its core activities including website development and web
services but has also established its retail outlets to compete within the offline
industry and to establish as a brand for retail outlets.
Amazon has also developed an integrated logistics network that focuses on the
delivery of the orders directly to the customers without involving any third-party
channels. Amazon has also established an integrated network of suppliers that sells
quality products on Amazon and Amazon has also partnered with global brands to
sell their products directly through Amazon so that the customer can get the quality
products direct from the manufacturers. As Amazon has an experienced and
effective workforce therefore it is required to focus upon increasing its managerial
efficiency so that the workforce can be effectively managed within the organisation
and performance can be improved.

INTERNATIONAL BUSINESS STRATEGY 2
Table of Contents
Introduction...................................................................................................................3
Strategic Position Analysis...........................................................................................4
Internal Environment:................................................................................................4
External Environment:...............................................................................................5
Amazon response to Global challenges.......................................................................6
Sustainability of the Competitive Advantage of Amazon..............................................8
VRIO Analysis...........................................................................................................8
Value Chain Analysis..............................................................................................10
Developing Strategic alternatives...............................................................................11
SAF Strategy Evaluation Model..............................................................................12
Issues within the implementation of chosen Strategic option.................................13
Conclusion..................................................................................................................14
References.................................................................................................................15
Appendix.....................................................................................................................19

INTERNATIONAL BUSINESS STRATEGY 3
Introduction
The E-commerce industry is under the continuous developmental stage and has
transformed the business environment in recent years. The rise in internet usage has
also promoted the growth of the e-commerce industry. E-commerce can be defined
as conducting business transactions online through websites or the applications
developed by organisations. E-commerce is considered as the most preferred
source for conducting business activities as it eliminates the need and requirement
of the physical presence of the business, can be started with limited capital
investment and also does not have a geographical barrier. The organisation is
required to have an effective supply chain through which it can deliver product and
services to its customers and a supplier network that can provide quality products to
the customers (Bourlier & Gomez, 2016).
Amazon is an organisation based in the US, deals in various sector including e-
commerce, cloud computing and artificial intelligence. Amazon was founded by Jeff
Bezos in 1994 and it started its operations as an online marketplace for books, and
later it expanded its business operations and included apparel, electronics, foods
and furniture. Amazon acquired various business ventures and has partnered with
major brands to sell their products directly through the Amazon website. Amazon has
focused on the customers rather than on the competitors within the industry and
ensures that the customers are being provided with quality and satisfactory products
and services while dealing with Amazon (Amazon, 2020).
The report is focused on analysing the Amazon’s strategic position within the
industry, and its internal and external capabilities through which it can maintain its
competitive edge within the industry. The report also focuses on analysing how
Amazon has responded to the challenges within the industry and has sustained its
competitive advantage within the industry.

INTERNATIONAL BUSINESS STRATEGY 4
Strategic Position Analysis
Internal Environment:
Amazon being an organisation operating within the e-commerce industry has its
product line as its key resource, as the diversified product categories available at the
website provides the organisation with a competitive edge within the industry.
Amazon focuses on introducing new products within its product line so that the
needs and requirements of the customers can be satisfied. As of April 2019, Amazon
has a total of 119,928,851 products available at its global website (Amazon.com)
(ScrapeHero, 2019). Apart from the products, Amazon’s resources include its
warehouses as well as the customer database, on which Amazon continuously focus
to improve the logistics services so that the product can be delivered effectively to
the customer. At present Amazon has a total of 1099 warehouses around the globe
operating so that the products can be delivered to the customers effectively. Also,
Amazon partners with third-party service providers to improve the efficiency of the
distribution network (MWPVL International, 2020).
Amazon’s organisational culture was highly criticized in 2015, as the employees
within the organisation were focused on providing innovative ideas and due to
ineffectiveness of the leaders, the ethics and the disciple was not the part of the
Amazon’s culture, to move forward within the organisation, the workers were
required to provide ideas better than their teammates, which promoted the use of
unethical means within the organisation. As a result, the organisation was not able to
meet the employee’s satisfaction level while working within the organisation (Kantor
& Streitfeld, 2015). To improve the organisational culture and to provide employees
with a sense of satisfaction, Amazon announced in October 2018, that it will provide
all U.S employees with a minimum of $15 as a wage. Also, the organisation focused
on implementing effective leadership within the organisation so that the internal
efficiency can be ensured (Schwantes, 2019).
Amazon is focused on being the world’s largest customer-centric organisation and
therefore acts accordingly. Amazon has become one of the most agile organisations
and also the most valuable organisation. As at Amazon the organisational strategies
are formed focused on customer satisfaction and along with maintaining the

INTERNATIONAL BUSINESS STRATEGY 5
competitive edge within the edge, such strategies develop the competences of the
organisation (Denning, 2019). Also, the organisational structure of Amazon is flexible
enough to deal with the changes within the industry. The organisation has achieved
success in its core business but also has expanded in different sectors thus
achieving its core competencies with the period (Fredkin, 2018).
External Environment:
The global sales of Amazon have reached $11.59 billion as compared to $0.60
billion in 2015 (Risley & Young , 2020) (See Appendix 1- Figure 1). Amazon not only
competes with the online websites but also provides competition to the brick and
mortar business by establishing its stores. Also, apart from opening stores at
different locations, Amazon’s business strategies that are focused on customer
satisfaction provides a competitive edge to the company. The one-day delivery
services and diversified product portfolio of the Amazon is an important aspect of the
Amazon competitive advantage.
Amazon has established itself as a competitive entity in the global industry. As the
organisation controls about 40% of the e-commerce market of US and around 75%
of the smart-speaker market through the sale of its Echo devices, also the Amazon
Web Services (AWS) covers around 40% of the cloud computing industry (Cohan,
2018). To provide the customers with better service experience, Amazon focuses on
investing specific amounts in the technological advancements within the
organisation, in the FY 2018 Amazon has invested around $28,837 million in the
technology and content which is much more than that invested in 2016 ($16,085
million) (Amazon, 2018).
The acquisition of Wholefoods in 2017 has made Amazon the fifth largest of
groceries within the UK. The establishment of cashier-less Amazon GO stores has
also provided the Amazon with a competitive edge within the industry where
Walmart, Arkansas and Bentonville were operating their business from a brick-and-
mortar store. In 2018, Amazon accounts for 3.7% market share within the groceries
and registered a sale of $695B (Day & Gu, 2019). With the technological
advancements made by Amazon, the Fast Company magazine has listed the
organisation as the most innovative organisation of 2017, whereas Forbes as listed
Amazon 3rd among the most innovative companies of 2017 (Singh, 2020).