Amazon's Innovative Strategies: A Business Development Report

This report provides an in-depth analysis of Amazon's innovative strategies and their impact on its business development. It begins with an executive summary and introduction, followed by an overview of Amazon's history, including its evolution from an online bookseller to a global e-commerce giant. The report then delves into Amazon's current innovative practices, such as customer behavior modification, feedback-driven product development, Amazon Go, personalized recommendations, search engine optimization, discount strategies, customer loyalty programs like Amazon Prime, time-restricted offers, and the creation of a marketplace. The report also examines Amazon's capabilities and its performance in 2017, including its success during Black Friday and Cyber Monday. The conclusion summarizes the key findings and highlights the importance of innovation in sustaining a competitive advantage in the rapidly changing business environment. The report emphasizes how Amazon has effectively utilized innovation to explore market opportunities and establish its dominance in the e-commerce industry.

MANAGING INNOVATIONS IN
BUSINESS

EXECUTIVE SUMMARY
The innovations are key tools for sustaining the position in rapidly changing business
environment. The report has described the impact of innovations in journey of Amazon. The
organisation has used its innovative practices to explore its business activities all over the world.
Amazon is the leading e-commerce retailer, which has made it possible to find almost everything
on a single click. The report has described various innovative techniques, which are used by
organisation to sustain its customers. Organisation is leaving no stone unturned to connect every
possible customer by providing vast range of products. The report has explained innovative
approaches used by organisation in 2017 and its possibilities in the upcoming years.

TABLE OF CONTENTS
EXECUTIVE SUMMARY ............................................................................................................2
INTRODUCTION...........................................................................................................................1
OVERVIEW OF AMAZON ...........................................................................................................1
Current innovative practices and Capabilities of Amazon..............................................................2
Innovative strategies and practices used by Amazon.............................................................2
Capabilities of Amazon..........................................................................................................4
Amazon in 2017 ..............................................................................................................................5
CONCLUSION ...............................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
Management of innovation is defined as the process to implement innovative business
practices and techniques, which are in alignment with advanced market trends. These
management practices are essential for the success of organisation as these practices help to
transform business according to the most advanced and beneficial business techniques (Chase,
2014). The report will focus on innovative practices used by Amazon, which encourages
worldwide success. The report will explore innovations implemented by Amazon for executing
its vast expanded business. It will analyse the capabilities of Amazon and its performance of the
last year. In the past few years Amazon has involved significant innovations in its practices. In
the past when organisation was not expanded all over the world with such massive support of
customers the technical innovations within Amazon has made it possible for the organisation to
make it familiar and successful brand all over the world. This report will analyse the present
innovative strategy of organisation, which involve the expansion of organisational activities in
every sector in which consumers have potential to buy.
OVERVIEW OF AMAZON
Amazon officially started its business activities as an online retailer of books in 1995.
With the great success, organisation made it possible to expand its business to all states of United
States and to almost 45 countries within month. Mr. Jeff Bezos was the founder of Amazon who
aimed at establishing Amazon all over the world as an e-commerce industry, which can sell
everything and entire range of products. Though foundation of an organisation was made in 1994
with the name Cadabra but later in 1995, it was transformed into Amazon. The growing potential
of technologies and vast scope in online selling of books encourage the founder Bezos's to frame
the path for online retailing services.
For presenting brand as established in 1997, organisation went public for the first time.
The rapid and huge success in selling books online encourages the organisation to expand its
business activities beyond books. Amazon soon started in dealing with online selling of
electronics to routine house hold products. The electronics selling helps organisation to grow and
develop rapidly across world.
By the beginning of 2000s, Amazon started to use its extremely efficient networking
skills to support more number of online stores. With the strong emphasis on networking
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infrastructure, By the beginning of 21st century when number of e-commerce organisations were
closed, Amazon survived by selling all product categories. In its brand, logo has an arrow shown
from A to Z, which leads the ultimate aim of Amazon to sell everything. For establishing its
dominance in market, Amazon started development of tech devices.
In 2007, e-reader was launched by the organisation, which gains great success in short
span of time. Within 4 years, this organisation started selling more books online as compared to
selling of printed books. In order to achieve long term goals in establishing online grocery store
in 2007, organisation started Amazon Fresh. The organisation faces huge challenges in
delivering low priced and fresh products to its customers on time (5 things to know before you
sign up for Amazon Fresh grocery delivery, 2017). Gradually, Amazon expanded it to various
cities. For keeping the interest of all sections of customers, Amazon studio was launched in
2010. It provided the original content policy of Netflix (Amazon Prime Video original TV
content is on a par with Netflix - it's about time the world noticed, 2016). The innovative
strategies of Amazon were highlighted when it became the first organisation, which received
Oscar nomination for streaming the best picture.
To address the technological innovations, Amazon entered in audio and video streaming
by introducing Amazon fire TV in 2014 (Amazon Fire TV Review-Now with 4K, 2017). For
meeting the requirements of technical friendly customer's, this organisation embarked on the
digital house that held devices in 2015, named as Amazon Echo. The organisation is considered
as the first one in releasing such innovative devices. These devices had higher efficiency as
compared to home speakers and had features like voice recognition and artificial intelligence,
which can play music on demand.
Such innovative introduction made Amazon very popular among users and technical
giants like Apple and Google. With rising market share and benefits, Amazon acquired various
companies such as online shoe retailer Zappos, Twitch.tv, which operates in video streaming and
Kiva systems. To have a greater impact on the supermarket and groceries, Amazon also acquired
grocery stores. The latest one is the Whole Foods Market Inc, which has dominance in organic
products. From these findings it can be concluded that Amazon has used innovation strategy
effectively to explore the hidden and all possible opportunities which could bring great benefits
for the organisation.
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CURRENT INNOVATIVE PRACTICES AND CAPABILITIES OF
AMAZON
Amazon is one of the most innovative and successful business organisations today. The
major role for its success is given to the innovative practices, which organisation uses to attract
and retain its customers.
Innovative strategies and practices used by Amazon
For sustaining huge success, the organisation maintains its innovative practices
throughout its operational and business activities. At present, organisation is using following
innovations in its executional activities:
Strategy to change customer behaviour:
The most powerful innovative strategy followed by Amazon is that it aims at changing
behaviour of customers instead of focusing on their demands and just providing what target
audience want. Amazon has created a purchasing obsession among customers by offering great
deals in purchasing.
Feedbacks and reviews:
Instead of instantly introducing innovation the major policy of the organisation is that
Amazon believes in repeating products and then based on feedbacks of customers it gradually
transforms the existing strategy into innovations (Chase, 2014). For instance, organisation offers
customized products by feature Amazon custom. Before making this feature accessible to all user
organisation offers it to only selected users so that their feedback can help in formulating the
final implementation. And after elimination of all possible errors it can be made accessible to
entire target audience.
Amazon Go:
Many users find it irritating to check in and check out. For providing relaxation to the
customers from repeative iteration of log in and log out organisation currently launched Amazon
Go, which does not require check out option. Customers can simply enter, buy and can leave
without check out options. This innovative step allows customers to purchase grocery from their
home and they will receive their grocery within 1-2 days without need to go directly to grocery
store.
Suggestions to customers:
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Organisation aims at having strong analysis of customer's preferences, feedbacks and
requirements. To enhance the purchasing nature, it is regular tendency of organisation to provide
the options of what other customers have preferred. The preference of other users encourage
customers to go through all products and ultimately motivate them to buy products.
Search engine optimization:
For continuing improvement in performance and to maintain top ranking in search engine
optimization, Amazon uses various innovative approaches to obtain reviews from people (Iyer
and Yang, 2015). For instance, when customers provide any review regarding its services, the
organisation offers discounts to them on their purchasing. This strategy is beneficial for
customers as well as for Amazon. Because this review helps in ranking them at top of search
engines and to improve the drawbacks which customers feels.
Discounts:
The innovative strategies of Amazon are the most influencing driving force for
customers. Attractive discount offers and low priced products of all categories on just a single
click are sufficient for pursuing buyers to make purchases.
Customer loyalty rewards through Amazon Prime:
To retain the customers, the most amazing innovation strategy used by organisation is its
loyalty rewards. The regular customers of Amazon are provided facility of Amazon Prime. The
prime membership reward provides such attractive offers that it becomes impossible for
customers to refuse such attractive deals and offerings (Merrill, 2017). It also encourages the
target audience to regularly engage in purchasing with Amazon so that they can get extremely
attractive benefits by the means of Amazon Prime.
Time restricted offers:
Amazon never make attempts to show that organisation is seeking and requiring
customer's support rather it makes approaches that forces customers to run behind organisation.
Time limited offers are example of such innovations. When organisation offers sales for few
days or hours then customers rush and fun experience to gain maximum profit in terms of
discounts. Time limitation forces the customers to take quick actions in purchasing.
Creation of marketplace:
The functional range of an organisation is not limited to any particular kinds of product.
Rather, Amazon allows everyone to sell any product on its platform. The product may range
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from groceries to expensive electronic devices. The flexibility in every aspect of its functions has
contributed the success of an organisation (Barjak, Niedermann and Perrett, 2014). For instance,
Amazon is never bounded with payment methods. Users who are not comfortable with digital
transactions can use cash on delivery. The customers can return products if they do not find it as
per their expectations. This flexibility makes organisation trustworthy among customers.
Strategy to change: The biggest innovation implemented by Amazon is that it instead of
bringing customers it has made it possible to send products and services at the doors of
customers. Thus, consumers are finding it easy, time and cost saving and exciting that just a
single click can give them so many benefits (The Future is here: Innovations in grocery, 2017).
Capabilities of Amazon
The organisation is highly capable to control and influence the purchasing and marketing
trends. With such huge support, an organisation can easily cause its competitors to completely
back off from the market. Amazon can involve local dealers in all countries to provide more
offerings, which are till now restricted to specific regions. For instance, products like jewellery,
medicines and food products which are purchased from local dealers instead of e-commerce
sites. Amazon can work on these fields to establish its control over these regions.
Amazon in 2017
Over the years, Amazon has evolved a lot and have improved their performance with every
additional year and always set high standers for their competitors. In the previous year, company
has grown at high rate and competing with Amazon online is not easy at all. Online means
taking the battle to Amazon's own backyard and sticking to physical stores is very difficult. The
company introduced Black Friday in 2017, as customers are increasingly moving towards online
shopping market. During the season of holiday, people prefer online shopping more rather than
going to shops. According to the study of National Retail Federation, customers spend more
online in the holiday season than their total spend in physical stores.
In recent years’, large retailers are shifting more towards E-commerce business to show
some online present. Therefore, Amazon has outpaced large sales growth in U.S. and this
organisation has further highlighted thanksgiving week this year (Amazon shares jump after
earnings, 2018), Especially, on Black Friday and cyber Monday. In 2017, total sales of the
organisation in Black Friday was about $ 1.4 billion. The organisation has managed 4% share of
Black Friday and similarly, for cyber Monday, the sales of Amazon stood over 30% of total
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sales. In 2017, Amazon acquired Whole Foods Market for $13.4 billion and increased its present
retail value at larger scale. The organisation registers 100% growth in India revenues in 2017.
The Amazon marketplace revenue has grown by 105% in the year ending, i.e. 31st March in
2017. Organisation's largest seller cloud-tail, which increased by 24% in 2017. Therefore, e-
commerce is growing at very fast rate.
During last three months of 2017, the e-commerce giant earn profit of $1.9 billion. The
organisation also launches new products called Alexa, which gained more popularity and made
this company more famous. Also, there was a website introduced by this organisation called
Junglee in February 2012 and in November 2017, this website was closed by this organisation.
Therefore, former areas are currently redirecting to Amazon India. On October 11, 2017,
Amazon fresh sells their range of boosting for branded product's delivery of products in selected
area only. This organisation on 22nd January 2018 launched Amazon Go, a store that uses
cameras and sensors to detect items.
Therefore, it automatically charges a shopper's account in this company. This technology
was made to reduce the need to checkout line. This organisation has shown growth at its best and
is growing at a very fast rate. This company has also invested in number of growing firms and at
international level also has shown growth. In 2018, for the first time, Jeff Bezos released
Amazon's shareholder letter to their number of Amazon prime subscribers. Therefore, it has 100
million and approximately 64% of households in the United States (Amazon Will Grow Quickly
Through Innovation and Bold Planning, 2017). This organisation is one of the leading retail
industries and growing at very fast rate. Also, there are planning more growth in upcoming years
and are continuously improving their organisation structure . Will become world's number one
organisation in upcoming years.
PESTLE analysis of Amazon on the basics of above information is as following
Political factors: Amazon relies on government support to implement, distribute their goods and
service. Therefore, depend upon political stability and for every organisation its important to be
stable.
Economic factors: Retail is one of those industries which can increases the economic of the
country very fast. Therefore, if the economy of the country is good it can develop more and
Amazon is focusing more on the development of grocery sector.
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Social factor: Amazon is make their distribution channel more strong so that customer do not
have to wait much for their goods. Therefore, company can deliver product faster to the
consumer.
Technological factors: Amazon is the organisation which deal with the latest technological to
distribute their goods and services. Also, experiment with new and creative way for customer's
can receive package.
Legal factor: Amazon has to face regulation and legal challenges against the technology sector.
Therefore, this will majorly impact the cloud services offered by this organisation. The company
need to develop compliance which are good for their organisation.
Environmental factor: Amazon is working on their issue related to the environment around their
organisation. Also, by this way company can attractive more customer's. Nowadays, consumers
are more aware about the environment.
Competitive advantages of Amazon
Amazon has competitive advantages over other rival company as it offers the best quality of
goods and services in affordable price. Therefore, is one of the leading retail industry in the
world and has build trust among their customers.
CONCLUSION
From the report, it can be concluded when business involves innovation as a necessary
component of their operational activities then these innovative practices surely lead to the
success and growth. The report has discussed about various innovative actions implemented by
Amazon for exploring its target customers all over the world. The report has also described
innovative journey of Amazon from its establishment to foundation of the most successful e-
commerce giant. Thus, it can be concluded that organisations must manage innovations in their
business activities. All innovations do not guarantee huge success but it can lead to the
foundation of successful future.
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REFERENCES
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Innovation, Olten and Bonn.
Batkovskiy, A.M., Kalachikhin, and et.al.,2016. Component Methodology for Creating and
Implementing Organizational Innovations in Business Companies. Indian Journal of
Science and Technology. 9(27).
Chase Jr, C.W., 2014. Innovations in business forecasting: Predictive analytics. The Journal of
Business Forecasting.33(2). p.26.
Clinton, L. and Whisnant, R., 2019. Business Model Innovations for Sustainability. In Managing
Sustainable Business (pp. 467-507). Springer, Dordrecht.
Gowri, R., Kumar, A. and Arvind, M.J., 2015, April. C2F: A Clustering Based Collaborative
Filtering approach for recommending product to ecommerce user. In Computation of
Power, Energy Information and Commuincation (ICCPEIC), 2015 International
Conference on (pp. 0144-0152). IEEE.
Iyer, G.R. and Yang, L., 2015. Internet Product Prices in Emerging Economies. In The
Sustainable Global Marketplace(pp. 223-223). Springer, Cham.
Lacka, E. and Yip, N., 2018. Revealing the effect of acculturation process on ecommerce
acceptance: the case of intra-European acculturation. Industrial Management and Data
Systems.
Merrill, P., 2017. Innovating the Online Store. Quality Progress.50(3). p.18.
Modi, S.N., 2016. ROLE OF TRUSTMARK IN ECOMMERCE.International Journal for
Innovations in Engineering, Management and Technology.1(1). pp.35-40.
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