Strategic Planning and Management for Amazon and Google

The report provides an insight into Amazon Inc acquisition of Whole Foods and Google's mobile payment app Tez. It discusses the competitive strategies, macro environment, and international strategies adopted by the companies.

Running head: MANAGEMENT
Strategic Planning and Management
Name of the Student:
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Table of Contents
Case 1: Amazon...............................................................................................................................3
Introduction:....................................................................................................................................3
Question 1........................................................................................................................................3
a. Critique to the Mission Statement............................................................................................3
b. Rating the Mission Statement of Amazon...............................................................................4
c. Revision of Mission Statement Given the Move in Grocery Industry.....................................4
Question 2:.......................................................................................................................................4
a. Description of Each Element in Macro Environment..............................................................4
b. Impact of Each Element in Grocery Industry..........................................................................5
c. Macroeconomic Environment that Encouraged Amazon to Acquire Whole Foods................6
Question 3........................................................................................................................................6
a. Generic Competitive Strategies adopted by Business..............................................................6
b. Generic Strategies of Amazon before Buying Whole Foods...................................................7
c. Explanation of how Acquisition of Whole Foods aligned with Competitive Strategy of
Amazon........................................................................................................................................7
Question 4:.......................................................................................................................................8
a. Reasons Why Senior Managers at Amazon Acquired Whole Food........................................8
b. Two Risk Amazon Faces on Entering Groceries Market........................................................8
Conclusion:......................................................................................................................................9
References:....................................................................................................................................10
Case 2: Google...............................................................................................................................11
Introduction:..................................................................................................................................11
Question 1......................................................................................................................................11
a. i. Five Competitive Strategies................................................................................................11

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ii. Generic Competitive Strategy that Describes Competitive Strategy of Google....................12
b. Drivers within Value Chain that Allowed the Managers to Execute Chosen Strategies.......12
Question 2......................................................................................................................................12
a. Changes in the Macro Economic Environment that Encouraged Google to Launch Tez......12
b. i. Other Mobile Apps of Google Prior to Tez........................................................................13
ii. How Past Experience With Mobile Payment System Influenced the Launch of Tez...........13
c.i. Challenges Faced By Google in Launching Tez in Crowded Mobile Market................13
ii. Competitors of Tez and their Uniqueness..............................................................................14
Question 3......................................................................................................................................14
a. Arrangements made by Google’s Manager in Entering the Mobile Payment Market of India
....................................................................................................................................................14
b. Risk associated with the arrangement....................................................................................15
Question 4......................................................................................................................................15
a. Three International Strategies................................................................................................15
b. International Strategies for Google in terms of Mobile Payment Apps.................................16
c. How previous involvement of Google’s in India Influenced Launch of Tez.........................16
d. Replicating Success in Launching Tez in Growing Economies............................................16
Conclusion:....................................................................................................................................16
References:....................................................................................................................................17

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Case 1: Amazon
Introduction:
The report aims at providing an insight into Amazon Inc acquisition of Whole Foods for
a whopping $13.7 billion (Fickenscher, 2017). The report commences with a critical analysis of
the mission statement along with an analysis of how it is revised to provide a move to the
grocery industry. The report also provides an overview of the Macro environment. It also
discusses about the company’s competitive strategies thereby explaining how the acquisition of
the whole food aligned with the competitive strategy of Amazon. The research report also
discusses about need for acquiring whole foods along with identification and discussion of two
challenges Amazon faces through its entry into the grocery industry.
Question 1
a. Critique to the Mission Statement
An organization’s mission statement represents the first component in the process of
strategic management that puts across a context or framework within which formulation of
strategies takes place. A mission statement has four key components; a statement for the
existence of the organization or company, a statement for the desired state of the future, a
statement of key values and a statement related to the major goals. The current mission statement
of Amazon is “We strive to offer our customers the lowest possible prices, the best available
selection, and the utmost convenience (mission-statement.com, 2019)”. The vision statement of
the company is “to be Earth’s most customer-centric company, where customers can find and
discover anything they might want to buy online”. When analyzed in the above context the key

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values the company focuses on includes ‘lowest price’, ‘best selection’, ‘utmost convenience’,
‘customer centric approach’, ‘widest categories of product selection ’ and ‘global reach’. Hence,
the mission statement of Amazon has put forward the context of strategy formulation.
b. Rating the Mission Statement of Amazon
In a scale of 10, I would rate the mission statement of Amazon as 7 as it helps in
satisfying the most of the characteristics of an ideal mission statement. This is because the
company takes into account the target customers and the market, varied products and the core
business aims focused towards convenience and pricing.
c. Revision of Mission Statement Given the Move in Grocery Industry
The mission statement however did not include nature of business, operations and
technology. The entry into bricks and mortar supermarkets with Whole Foods Amazon should
add more details to the corporate mission for giving investors and the employee a better idea of
the company. In, fact the mission statement should be revised to be more comprehensive in
representing the brick and motor retail.
Question 2:
a. Description of Each Element in Macro Environment
This includes (Lancaster & Massingham, 2017):
Global Forces: This referred to the falling barriers of international investment and trade
thereby allowing countries in enjoying a sustained level of economic growth.
Technological Forces: One of the key impacts of the technological change lies in its
barriers to the entry thereby radically shaping the structure of the industry.

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Demographic Forces: These represent the outcome of the changes within characteristics
of the population. The characteristics include the gender, age, race, ethnic origin, social class and
sexual orientation.
Social Forces: They refer to ways by which the change in social moves and values
influence the industry.
Political and Legal Forces: These represent the outcomes in the changes of the laws and
the regulations. They range from the political and the legal development within the society
thereby significantly affecting the companies and the managers.
b. Impact of Each Element in Grocery Industry
This includes:
Global Forces: The falling barriers of the international investment and trade have eased
the process for retailers in entering domestic markets, increasing competition and lowering
profitability. For example opportunities of investments in retailing have increased for the
Western companies in the unexplored developing markets.
Technological Forces: Emerging technologies lowers the entry barriers for the retailers.
For instance, internet led to the increase in the rivalry within industry thereby lowering both
prices and the profit for the retailers.
Demographic Forces: The ageing of the baby booming generation has increased
opportunities for the retailer to cater to the older generation (Carpenter et al., 2013). For
example, the products related to home health have been able to see an upswing of demand in the
retail sector.

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Social Forces: The major trend in the recent decades has been an inclination towards the
consciousness of the greater health. For example, retailers selling healthy products would be able
to gain a greater share of the market compared to the rivals.
Political and Legal Forces: Retail firms within the industry have been influenced by the
government regulations (Laudon & Traver, 2016). For example, throughout industrialized world
there has been strong trend towards industry deregulation including retail that has been
previously controlled.
c. Macroeconomic Environment that Encouraged Amazon to Acquire Whole Foods
The move of Amazon in buying Whole Foods have been is propelled by the falling
barriers in the international trade that have made it easier for the retailers to enter the domestic
market thereby resulting in the increase of competition.
Question 3
a. Generic Competitive Strategies adopted by Business
There are four generic competitive strategies adopted by business. These include:
1. Cost Leadership: This strategy allows the business to focus on a broader market and
put across lowest possible price (Hilman & Kaliappen, 2014). Here, a business can keep the cost
lower or have larger market share through maintaining average prices. In both instances, the
focus remains in keeping the company prices lower.

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2. Differentiation: This strategy allows the business to target a broader market with
higher demand with products or services that have unique features(8). This strategy allows the
business to put across exclusive products that makes it attractive compared to competitors.
3. Cost Focus: This strategy allows the business to target niche market with little
competition and thereby offering the lowest price possible (Hill & Jones, 2012).
4. Differentiation Focus: This strategy allows the business to target a market with little
competition with products or services that have unique features (Brenes, Montoya & Ciravegna,
2014).
b. Generic Strategies of Amazon before Buying Whole Foods
Amazon opted for the cost leadership as the generic strategy for gaining competitive
advantage. Amazon has opted for advanced networking and computing technologies for
maximum level of operational efficiency and minimization of cost. Besides, the other benefits of
cost minimization depended on process automation used for scheduling, purchasing and
operational process. The benefits will enable Amazon in minimizing the cost of the online retail
and the other services.
c. Explanation of how Acquisition of Whole Foods aligned with Competitive Strategy of
Amazon
After the acquisition, Amazon made an announcement that would begin to sell the Whole
Food brand through its website. The company aligned the acquisition by ensuring online
availability of products that would make the organic whole food cheaper (fastcompany.com,
2019). Past reports have shown a double digit growth for the organic products. Thus, Whole

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Food lost millions of customers since there were cheaper products that have been offered by
other retail chains like Walmart, Costco and Kroger.
Question 4:
a. Reasons Why Senior Managers at Amazon Acquired Whole Food
The managers at Amazon acquired the Whole Food for two key reasons (Thompson,
2017):
1. Firstly, Amazon understood the importance of customer convenience and an enhanced
level of preference for soaring e-commerce food delivery business due to the reluctant nature of
the consumers in buying stuffs. More and more Americans have been found to order increased
meals and products online. Therefore, trying its hands on the grocery business and selling the
products online will help Amazon in increasing its profitability.
2. Secondly, Whole Foods had prominent distribution hub both in the urban and the
suburban locations that proved to be beneficial for the delivery business of Amazon. Some of the
analysts are of the view that Amazon along with Whole Foods bought close to 431 distribution
nodes in prime locations.
b. Two Risk Amazon Faces on Entering Groceries Market
These include:
1. Challenge 1: Cost of Delivery and Storage

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Perishable items require investment on the storage and the delivery infrastructure. It also
requires the need for delivery vans and containers for ensuring freshness in delivery for the
perishable items. This requires huge amount of capital thereby increasing cost.
2. Challenge 2: Lower Profit Margins
Customers remain reluctant in paying the convenience changes and demands for getting
quality assurance and faster delivery. This need could act as financial nightmare for the online
grocers.
Conclusion:
On a concluding note, it can be said that Amazon requires a more comprehensive mission
statement for entering the grocery industry as far as its mission statement is concerned. It has
been found that Macro environmental changes like global forces have encouraged the company
in acquiring Whole Foods. The report shows how Amazon adopts a cost leadership strategy and
how the acquisition also remains aligned with the strategy. The report also shows how Amazon
benefits in terms of profitability and distribution hub on acquiring Whole Foods. Enhanced cost
and other financial setbacks are some of the setbacks of this acquisition.

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References:
Fickenscher, L, (2017).Amazon to buy Whole Foods in $13.7B deal. Retrieved from
https://nypost.com/2017/06/16/amazon-buys-whole-foods-in-13-7b-deal/
fastcompany.com, (2019). Retrieved from https://www.fastcompany.com/company/amazon
mission-statement.com, (2019). Retrieved from http://mission-statement.com/amazon/
Lancaster, G., & Massingham, L. (2017). The development of a strategic approach to marketing:
Its culture; internal macro-and external micro-environmental issues. In Essentials of
Marketing Management (pp. 1-32). Routledge.
Carpenter, J. M., Moore, M., Alexander, N., & Doherty, A. M. (2013). Consumer demographics,
ethnocentrism, cultural values, and acculturation to the global consumer culture: A retail
perspective. Journal of Marketing Management, 29(3-4), 271-291.
Laudon, K. C., & Traver, C. G. (2016). E-commerce: business, technology, society.
Hilman, H., & Kaliappen, N. (2014). Do cost leadership strategy and process innovation
influence the performance of Malaysia hotel industry?. Asian Social Science, 10(10), 134.
Hill, C., & Jones, G. (2012). Essentials of Strategic Management (3rd ed., pp. 75-77). Cengage
Learning.
Brenes, E. R., Montoya, D., & Ciravegna, L. (2014). Differentiation strategies in emerging
markets: The case of Latin American agribusinesses. Journal of Business
Research, 67(5), 847-855.

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Case 2: Google
Introduction:
The report provides an insight into Google and discusses its various strategies revolving
mobile payment app Tez (Baxi, 2017). The report commences with the competitive strategy of
Google and discusses the drivers that forces Google to choose such a strategy. The report also
discusses about Google’s strategic move, timing and the scope of its operations. The report
discusses about the arrangements Google made while entering the mobile markets. The report
also discusses about the international strategies and focuses on the strategies that would work for
Google in terms of the mobile payment apps.
Question 1
a. i. Five Competitive Strategies
These include (Thompson, Strickland & Gamble, 2015):
1. Low cost strategy: Businesses adopting this strategy create lower prices which the
competitors are unable to meet. Business following this strategy can gain lion share of market
thereby resulting in the larger profits.
2. Differentiation strategy: Businesses following the differentiation strategy offers
unique products and charge higher prices resulting in higher margins of profits and loyal
customers.
3. Low Cost Focus Strategy: Business adopting this strategy offer lower prices to a
niche segment based on certain characteristics that helps in easier anticipation and meeting of
the customer demand.

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4. Differentiation Focus strategy: Business adopting the strategy offers unique
products to a niche segment of the market.
5. Best Cost strategy: This strategy allows the business in choosing focused market and
creates an appeal with a lower cost. This competitive strategy is found to exceed the expectations
of the customers both in terms of the cost and the features.
ii. Generic Competitive Strategy that Describes Competitive Strategy of Google.
The competitive strategy that describes Google is the differentiation strategy which
involves the development of unique capabilities that sets itself from the competitors
(Teeratansirikool et al., 2013). In other words, Google sets itself apart from the competitors
through uniqueness of the products.
b. Drivers within Value Chain that Allowed the Managers to Execute Chosen Strategies
Google chose the differentiation strategy to attain competitive advantage based on the
driver of uniqueness. The uniqueness is achieved through the highly innovative culture of
Google.
Question 2
a. Changes in the Macro Economic Environment that Encouraged Google to Launch Tez
The launch of Tez has been due to the change in the political forces where the Indian
government has put across ban on 500 and 1000 rupees notes. The result of these political
developments within the society significantly influences the companies and the managers. In

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other words political process plays a key role in shaping the law of the society that constrain the
operation of the managers and the organization thereby leading to the creation of threats and
opportunities.
b. i. Other Mobile Apps of Google Prior to Tez
The other mobile apps of Google included Google Wallet, Android Pay and Google
Checkout. Google Wallet represented payment app for mobiles that acted as virtual wallet
thereby allowing users in making transfers and payments right away from mobile (Chang, 2014).
This payment mode also provides the users with a faster means of making payments at the e
commerce stores. Google checkout is another online payment service aimed at simplifying the
online payments. Android pay is another online service designed for the Android smart watches
and smart phones.
ii. How Past Experience With Mobile Payment System Influenced the Launch of Tez
Google launched various competing service in the past with similar space of messaging,
payments, operating system and voice calling. This led to fragmentation and confusion.
Gathering from the past experience and continuing with the policy of consolidation and
fragmentation Google announced merging of the Android Pay, Google Wallet and various other
service in single platform. This influenced the launch of mobile payment App Tez.
c.i. Challenges Faced By Google in Launching Tez in Crowded Mobile Market.
The challenge faced by Google in launching Tez has been in capturing the 7MB space on
the user’s phone which already seems loaded with myriad of apps. Although the app has been
similar to the WeChat of China but unlike We Chat the Tez app did not have either ecommerce
or social media connection for throwing around. In addition to this, Google Tez app also faced

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disgust and disappointment since it was only available in eight languages in a country with
twenty two official languages (Wang, Hahn & Sutrave, 2016).
ii. Competitors of Tez and their Uniqueness
The competitors of Tez include PayPal, Stripe and Amazon Pay
Competitors Uniqueness
PayPal 1. Allows shopping with convenience
2. Allows shopping with confidence
3. Ensure secure shopping
Stripe It is a simple API for accepting online
payments.
Amazon Pay Ensure secure purchases from the third party
that accepts the Amazon Pay without the need
for re entering the payment related information
once again.
Question 3
a. Arrangements made by Google’s Manager in Entering the Mobile Payment Market of
India
To enter the mobile payment market in India Google supercharges its mobile payment
app. Google officially embraces the popular app strategy of Gojek and We Chat. Further, Google
also launched a newer spot platform powered by the digital service (Iyengar, 2017). It enables
the merchants and the business in creating branded experiences that remains accessible to the

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customers through app. This strategy has enabled Tez to become one of the most popular online
mobile payment modes with close to 67 million users.
b. Risk associated with the arrangement
The risk associated with the above arrangement is the perceived risk that relates to the
uncertainty and risk associated with the use of the online mobile payment apps. This primarily
includes the uncommon and common risk that includes password integrity, privacy, hacking, and
protection of personal information and encryption of data. Other associated risk includes the loss
of vital information due to the usage of the platform.
Question 4
a. Three International Strategies
These include (Hill & Jones, 2012):
1. Globalization Standardization Strategy: It focuses on enhancing profitability
through reaping cost reductions from the location economies and the economies of scale.
2. Localization Strategy: It focuses on enhancing the profitability through customization
of the goods and services of the company in providing a good match as per the preference and
taste of the national market.
3. Transnational Strategy: Through this strategy the firm achieves lower cost and
differentiation across the geographic markets thereby fostering skills amongst subsidiaries within
global operations.

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b. International Strategies for Google in terms of Mobile Payment Apps
The international strategy adopted by Google in terms of the mobile payment app is the
localization strategy (Fan et al., 2016). This seems to be one of the most ideal strategies when
substantial differences exist across nations in regard to the consumer preference and taste
without any cost pressure.
c. How previous involvement of Google’s in India Influenced Launch of Tez
Google came to India around 1998 and 2000 and launched the Q&A app for connecting to
the neighborhood of the country. The company also dreamt in bringing India online which
encouraged the firm to launch Tez in the year 2017 under the guidance of Arun Jaitley, the
former Finance Minister. Thus, India used its political connections to launch Tez
d. Replicating Success in Launching Tez in Growing Economies
The global forces have led to falling barriers in international investment and trade made it
easier in entering the growing economies. Presently, it became easier for companies like Google
to enter the growing economies of China and Japan.
Conclusion:
On a concluding note, it can be said that Google adopts differentiation strategy for
gaining competitive advantage. The political forces in macro environment have prompted
Google to launch Tez. The company supercharges its app for entering the mobile market. The
report also discusses about perceived risk. The company also adopts localization international
strategy and previous political connections to launch the mobile app.

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References:
Baxi,(2017). Google launches Tez, a new digital payment app for India; here’s everything you
need to know. Retrieved from https://www.androidauthority.com/google-launches-tez-
new-digital-payment-app-india-heres-everything-need-know-801059/
Chang, T. K. (2014). A secure operational model for mobile payments. The Scientific World
Journal, 2014.
Fan, D., Xia, J., Zhang, M. M., Zhu, C. J., & Li, Z. (2016). The paths of managing international
human resources of emerging market multinationals: Reconciling strategic goal and
control means. Human Resource Management Review, 26(4), 298-310.
Iyengar, R( 2017). Google joins India's cashless payments rush.Retrived from
https://money.cnn.com/2017/09/18/technology/google-tez-india-mobile-payments-app/
index.html
Teeratansirikool, L., Siengthai, S., Badir, Y., & Charoenngam, C. (2013). Competitive strategies
and firm performance: the mediating role of performance measurement. International
Journal of Productivity and Performance Management, 62(2), 168-184.
Thompson, A., Strickland, A. J., & Gamble, J. (2015). Crafting and executing strategy: Concepts
and readings. McGraw-Hill Education.
Thompson, D ( 2017). Why Amazon Bought Whole Foods. Retrieved from
https://www.theatlantic.com/business/archive/2017/06/why-amazon-bought-whole-
foods/530652/

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Wang, Y., Hahn, C., & Sutrave, K. (2016, February). Mobile payment security, threats, and
challenges. In 2016 second international conference on mobile and secure services
(MobiSecServ) (pp. 1-5). IEEE.