Library for Study Material: Strategic Management and Information Systems

Running Head: MANAGEMENT 0
STRATEGIC MANAGEMENT
AND INFORMATION
SYSTEMS

MANAGEMENT 1
Table of Contents
PART A......................................................................................................................................2
Introduction............................................................................................................................2
Outline of E-commerce Industry............................................................................................2
Value chain and value system of Amazon.............................................................................2
Strategic Position of Amazon and Importance of information systems.................................3
Porter five forces analysis of Amazon...................................................................................4
PART B......................................................................................................................................5
PESTLE analysis of Amazon.................................................................................................5
SWOT analysis of Amazon....................................................................................................7
Conclusion..................................................................................................................................8
References..................................................................................................................................9
Appendices...............................................................................................................................11

MANAGEMENT 2
PART A
Introduction
Amazon is one of the prominent e-commerce corporation founded by Jeff Bezos in 1994.
Considering its e-commerce platform, Amazon has expanded its roots into several product
lines including some of their private labels products. For instance, their AWS cloud server is
one of the most used cloud computing platform and technology widely used by many big
organisation such as Netflix, NASA, Nokia and Adobe (Hern, 2017). Amazon has been
expanded to around 13 countries around the globe including emerging nations like INDIA
and with Amazon international shipping, most items can be shipped to over 100 nations
outside the U.S. The company had earned a total net sales of nearly 72.38 billion U.S. dollars
in the quarter 3 of 2018 (statista.com, 2018).
Outline of E-commerce Industry
History of e-commerce was begun on August 11, 1994, signifies buying and selling of goods
and services with the help of Web and network (Hernandez, Jimenez and Martin, 2010).
Hence, when a man sold a CD relating to band sting to his friend using website, an American
retail stand, consumption of e-commerce aspects grown significantly inclusive of various
retailers doing transactions in a global marketplace. It helps all sorts of sellers and retailer
including independent retailer, large scale and mid-scales firms, local shops, etc.
In this modern century, there is a drastic change take place in e-commerce and its channels
which helps customers to buy the products in a more realistic way with using of live chat,
voice assistance and chatbots.
Value chain and value system of Amazon
The applications of value chain are introduced by Michael Porter that include several phases
for process of transformation with inputs and outputs to a part of unique points (Etgar, 2008).
It helps in identifying various conventional activities help Amazon to attain competitive
advantage in the industry. The value chain of Amazon is divided into various activities
including primary and supporting such as inbound logistics, firm infrastructure, operations,
human resource management, etc. Their value chain effectively met the changing needs of
customer market including change in buying behaviour. In addition, their advancement in

MANAGEMENT 3
technology such as AI, dash button, prime air and many more fuelled the business success in
the entire industry (Sutija, 2018). Their value chain has gain efficiency in all the aspects such
as marketing and sales, operations, procurements, logistics and helps them in attaining
competitive advantage.
Moving to its value system, it extends beyond the boundaries of an enterprise. A value
system of Amazon includes their business supplier, firm itself, its distribution channels and
their business buyers (Kocher, 2017). There are both upstream and downstream elements as
per the profit pools in the market economy. All aspects of their value system are impacted by
competitive forces and industry structure.
Strategic Position of Amazon and Importance of information systems
Amazon has sustained its competitive advantage based on overall cost leadership strategy. In
addition, development of their information technology also drives the company towards
success including synergies between internal resources and external drivers. The company
cost leadership strategy is based on unified customer experience and help them to get to the
next level in customer satisfaction. Their main objective is to provide maximum value to the
customers at lower prices and enable customers to search for Amazon, shop with its portal
and fulfil the needs of online shopping.
Amazon incomes are derived incomes from is constant innovation and adaption of various
dynamic market elements and aspects (Trefis, 2018). The company was initiated in 1994 as
online bookseller however, expanded to various areas such as cloud computing, home device
manufacturers, movie studio and many more. The company majorly focused on customers’
needs and expectations and also focused on growth instead of profits. The company derived
its income from various domains such as AWS, retail third-party sellers, Amazon prime and
several retail subscriptions, retail products (majorly), and others (including ad services, co-
branding agreements, etc.). On the other hand, their major cost incurred on their shipping,
promotions and advertisements, employees training and recruitment, AWS management and
infrastructure. For instance, Amazon shipping costs amounted to 27.7 billion U.S. dollars in
the year 2018 (statista.com, 2018). Moreover, they also spend around 8.2 billion U.S. dollars
in the previous year.