Amazon: Business Strategy and Competitive Advantage

Running Head: MANAGEMENT 0
2/12/2019

MANAGEMENT 1
1 Summary
Amazon.com is one of the most prominent names on the Web currently. The company is
known for its customer-centric and customer-focused approach. Their main goal is to meet
customer expectations by providing a large range of products with best selection and lower
prices. The company is also known for its innovative approach and technological
development.
This report emphasises on several aspects of the company with respect to business strategy of
the company. It includes their basis of competition, strategic groups, cultural web and firm
stakeholders. In this report, the value chain of company comprising primary and secondary
activities are also elaborated in addition to the resource-based view.
In last, significant recommendations is also being suggested that can be adopted by the
corporation so as to gain a competitive position in the industry.

MANAGEMENT 2
Contents
1 Summary................................................................................................................................1
2 Introduction...........................................................................................................................3
Overview of E-commerce Industry.....................................................................................3
3 (i) Market mission of Amazon..............................................................................................4
(ii) The Basis of Competition...................................................................................................4
(iii) Strategic Group Analysis..................................................................................................6
Amazon Industry Forces and Attractiveness....................................................................6
(iv) The activities and resources of the company..................................................................8
Resource-based view............................................................................................................8
Value Chain Analysis...........................................................................................................9
(v) The Culture Web of Amazon...........................................................................................13
(vi) The stakeholders of the Amazon....................................................................................14
4 Recommendations and Conclusion....................................................................................16

MANAGEMENT 3
2 Introduction
Amazon is an e-commerce corporation initiated in 1994 by Jeff Bezos (Ritala, Golnam and
Wegmann, 2014). In align with an e-commerce platform, the company is focusing on various
product line including cloud computing, artificial intelligence and some other private label
products. It is known to be a major and largest e-commerce marketplaces where the
customers can purchase varieties of products including books, electronics items, software,
video games, toys, furniture, jewellery and many more. Amazon is currently operating in 13
country-specific sites including top nations such as the United Kingdom, Spain, United
States, Canada, Germany, France and Austria.
In all these countries, Amazon is using dynamic pricing, bundle pricing and price skimming
strategy for selling of their products. During the quarter 3 of 2018, Amazon created total net
sales of nearly 72.38 billion U.S. dollars, more after 60.5 billion dollars in the earlier quarter
(statista.com, 2018).
Overview of E-commerce Industry
E-commerce, also recognised as electronic commerce denotes to selling and buying of goods
and services using the web and also includes transaction of date and money to execute the
same.
One cannot easily analyse the difference between e-business and e-commerce as it is small
but identifiable. E-business is related to all aspects of operating an online business whereas e-
commerce especially refers to the transaction of goods and services.
On August 11, 1994, history of e-commerce was begun when a CD is sold by a man
considering band Sting to his friend with the help of website, an American retail stand
(Grothaus, 2015). Since then, e-commerce has evolved gradually so as to deliver easiness to
consumers by offering a platform composed of retailers and marketplaces. Many small
businesses, independent retailers and mid-scale corporations are benefitted from e-commerce.
These small businesses and retailers can use this platform in order to sell the goods and
services at internal level that was certainly not conceivable through offline and traditional
retail channel.
E-commerce is directly linked with mobile commerce, services related to marketplace and
retail, e-procurement and consumer service (Gamal Aboelmaged, 2010). In addition, various