MANAGING INNOVATION IN BUSINESS

Running head: MANAGING INNOVATION IN BUSINESS
MANAGING INNOVATION IN BUSINESS
Name of the Student
Name of the Organization
Author Note

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Executive Summary
A brief overview of Amazon as well as the field e-commerce in which the company
belongs helps in getting information about the company in brief. The report helps in managing
innovation in the largest online retail sector company Amazon. It is the largest online company
as per revenue is concerned. There is a huge impact of both the PESTEL as well as the
MICHAEL PORTER’S FIVE FORCES model on the innovation of Amazon which has been
described within the study. Through PESTEL analysis, the company is able to identify all the
opportunities and threats based on the factors which are external in the remote environment of
the company. The different intensities of several external factors affecting the company based on
the Porter’s Five Analysis model is clearly described. SWOT analysis comprising of all the
strengths, weaknesses, opportunities and threats have been used for assessing the existing
capabilities of innovation of the company. The SWOT analysis basically summarizes the main or
the key issues related to the environment of the business of the company and the strategic
capability of the company which are considered to be most likely in impacting the development
of strategy. Several resources which are used by Amazon include physical resources, financial
resources, human resources and intellectual capital. The report comprises of all the mentioned
resources in details. All kinds of strategic capabilities are well described and checks whether a
particular strategic capability is valuable one, rare one or rather an inimitable one. The value
network or the analysis of value chain clearly describes the set of several links as well as the
relationship within the respective organization which are required for creating a product. The
report has presented the value network of Amazon in a prominent way depicting all the strategic
capabilities within the network. Lastly the paper is summarized by identifying or rather

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recommending areas within the processes, products, position as well as production required for
the innovation in the future from 2019 and beyond in details.

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Table of Contents
Introduction......................................................................................................................................4
Overview of the industry.................................................................................................................4
Overview of the organization..........................................................................................................4
Factors which have driven innovation in Amazon..........................................................................5
Impact of MICHAEL PORTER’S FIVE FORCES on Amazon.....................................................6
Impact of PESTEL analysis on Amazon.........................................................................................6
Existing Innovation Performance and Capabilities.........................................................................8
Resources.......................................................................................................................................11
Evidence of innovation in Amazon(Position, paradigm, product or process)...............................12
Value of strategic capabilities:.......................................................................................................13
Value Chain Analysis....................................................................................................................14
Conclusion.....................................................................................................................................15
References......................................................................................................................................16

4MANAGING INNOVATION IN BUSINESS
Introduction
The main purpose of the report is to manage innovation in the largest online retail sector
company Amazon. The first part of the report comprises of the overview of the organization as
well as the industry. It is followed by a SWOT analysis which is shown by portraying existing
innovation performance and capabilities of the Amazon. It also comprises of all kinds of
resources used by the company whether physical, financial, and human as well as the intellectual
capital. All kinds of strategic capabilities and the value network is clearly depicted.
Overview of the industry
The field or the industry of e-commerce comprises of the activities of selling and buying
a number of products online. E-commerce industry comprises of several technologies like
commerce of mobile, transfer of electronic funds, management of supply chain, online
marketing, online processing of transaction, interchange of electronic data and systems of
inventory management. (Ritala, Golnam and Wegmann 2014). The country UK is considered to
be the third largest market of e-commerce in the world. E-commerce is counted for about
nineteen percent of the total business share turnover in the country recently by the year 2015. E-
commerce industry is responsible for employing shopping online directly from the retail sales to
the customers through mobile apps or websites, buying and selling between several businesses
and participation in several marketplaces which are present on the internet which are mainly
responsible for processing sales from customers to customers. Currently the statistics of e-
commerce has stated that about 40% of the users of internet throughout the world are buying
goods or products via mobile, tablet, desktop or some other devices upon the internet. This has

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resulted in an amount of about 1 billion buyers online and has been projected to grow
continuously.
Overview of the organization
Amazon is considered to be as a multinational and one of the largest marketplace in the
field of e-commerce and platform of cloud computing as per the measure of the capitalization of
market and revenue (Kantor and Streitfeld 2015). Amazon was founded by Jeff Bezos and has its
headquarters situated at Seattle, Washington in US. The name Amazon was founded soon after
the Amazon River, as it is the largest river in the world. The alphabet “A” could help the
company in showing at the top of the list of alphabets and finally the site came online as
Amazon.com in the year 1995. Some of the products of Amazon includes Amazon Appstore,
Amazon Kindle, Amazon Prime and Amazon Video. The company Amazon is considered to be
as the largest online company as per revenue is concerned. The company was named Amazon
considering the name of the largest river in the World.
Amazon Innovation Timeline
Followed by the years from 2002 to 2019 significant innovation has been noticed in Amazon
services.
 Low cost subscription for Expensive product and services – In order to provide the access
to the expansive product and services in low cost, Amazon has invented a paid
subscription service Named as Amazon Prime in the year 2005. It has offered the
Amazon customers the access of paid and expensive services in less cost which includes