Strategic Management and Competitive Advantage: A Case Study of Amazon

This report discusses the strategic management techniques used by Amazon to achieve competitive advantage. It covers the company's core competencies, recent strategies, and future goals. The report also provides recommendations for the company's future success.

Strategic management 0
Management
Strategic management
Student’s name
8/1/2019

Strategic management 1
Contents
Introduction-....................................................................................................................................2
Course of actions.............................................................................................................................4
Conclusion-......................................................................................................................................6
Recommendations-..........................................................................................................................7
References........................................................................................................................................8

Strategic management 2
Introduction-
Strategic management majorly highlights about the organization resources, which
majorly helps them in fulfilling the set objectives and goals. It involves right from the setting
objectives, analyzing the competitive environment, internal analysis and lastly it also helps in
ensuring that the management proposed various strategies so that business attains its set target
(Hill, Jones, & Schilling, 2014). In other words, strategic management is that branch of
management that aids the business to lay its objectives, implementing various strategies and
various corrective actions to the deviation aroused within the organization (David, & David,
2013).
Furthermore, if we talk about the core competencies it is one of the finest possibilities
with the organization, which helps them in building the permanent and sustainable competitive
advantage in an ever-changing environment. Therefore, if an organization needs to achieve the
long-term success, they need to build competitiveness within the company, constant maintaining
its internal capacity so the desired success can be fulfilled. Other than this, it is also seen that
core competency is not the product specific, but they so contribute to the competitiveness of
range of product and services. Companies competitive advantage and performing better is one of
the set target than to its competitors, delivers genuine value to the customers and thus ensuring
the dominant position in the market leads to the sustainable competitive advantage of the
company (Barros, & Dumas, 2016).
Amazon one of the well- renounced online retail organization, which sells the wide
variety of customers’ goods and digital media as well as electronic devices. In terms of
competitive advantage factor, amazon recent competitive advantage aspect is promoting various
and numerous products on Alexa. It is seen that many customers having an access to the smart
speakers. Therefore, the concept of shopping by the use of smart speakers will be the upcoming
strategy, which leads to the competitive advantage. Hence, by this idea, the company is helping
their customers to discover the new products and the offerings through advertisements and along
with this; they are allowing to target the companies’ makings “ALEXA” for further use such as
shopping (Cloud, 2011).

Strategic management 3
Second strategy, which the company has set, is the amazon apparel. Amazon is
expanding its business model to trial with its clothing contribution services as well as the isolated
labels are also provided. Other than this, tapping onto the convenience factor, many people or the
customers are shopping as it carries the huge collection, free two days shipping and easy returns
and exchanges are there. Upcoming attire related plans includes interactive spending experience,
pop-up shops and fitting rooms with the Alexa- controlled lighting.
Third and the most interesting strategy are amazon4 star and pop-up stores. Amazon has
recently started with its 4-star venture, which is inspired by its customers. As this store sell out
the new and the trending objects on Amazon.com. In this, the major associates are beneficial by
receiving the special prices, and the customers who aren’t the prime members can initially sign
up for 30 days trial and instantly receive the prices of the stores. Another aspect is amazon pop-
up store in which the shoppers have an chance to test drive and purchase the devices and can get
free advice from professionals. Hence, this strategy has allowed the business to merge the online
prices with in store accessibility in location where customers are shopping.
Other than this, certain in-house sustainability efforts also plays the major role, just as
amazon has energy efficient buildings and the company has also launched the internal initiatives
to improve environmental and energy performance. Other than this, employees of amazon also
works together to identify and implement environmental and energy initiatives across all the
parts of the company hence, through this they identify and design the alternative solutions which
are more energy efficient (Fusaro, et al, 2011).
Hence, while seeing at these strategies, Amazon as its business strategy mainly focuses
on four basic principles such as- customers’ obsessions rather than the competitors focus, passion
for invention, commitment to operational excellence and last long term thinking. All these
aspects not only lead to the long term of success of the organization but also help the company
names through its competitive advantage. Therefore, this leads to the company to regularly tap
the new niche and segments, also helps in strengthening the companies’ ecosystem, majorly
focusing over the needs of the customers and the leadership values. Through this, it is poised that
it is one of the most valuable companies in the world.

Strategic management 4
In terms of strategy formulation processes, amazon’s strategy is mostly driven by its
sources of the competitive advantage as it mainly focuses on its technological aspect, actualizing
the benefits of economies of scale and leveraging the efficiencies from the set synergies between
the external and internal drivers and the resources. Therefore, it shows that the amazon uses
technology at its fullest, which is not surprising considering it is as an internet based company.
Other than this, amazon’s current strategy is also to build around the convenience aspect,
in which the customers need not to go to the physical bookstores or not even to wait to purchase
an item. Therefore, for such issues, amazon has introduced same day delivery. Along with this,
they are also trying with an idea of using drones for near and instant delivery. Finally, it is also
seen that amazon is adopting the global approach in an international market wherein they adapts
the global business model with the local delivery and the logistics supply chain in which
customers can buy anytime and from anywhere. Hence, in terms of future, amazon continuous to
focus on its core competencies and at the same time it is also expanding its global value chain
and maintaining its market leadership (Svee, Giannoulis, & Zdravkovic, 2012).
Course of actions
In terms of course of actions that can be adopted by the company and which are
universally the best ways for the company to further operate and finally grow to a profitable
business. In this it is seen that standards are contagious in which it is always seen that high
standards are teachable rather than being intrinsic. In this company should not work at the low
standards and moreover they should also work ethically (Iyer, & Henderson, 2012).
Secondly, the company like amazon should be clear with the set goals, and looks at the
realistic expectations. Hence, the first course of actions is to outline the quality, which the
company needs to produce to their customers. Further, the company needs to set the realistic
expectations for themselves, for entire team and work accordingly to achieve that level of
quality, which was earlier set as target.
Thirdly, it is seen that according to the set course of an action, the company should stay
involve with the people or the customers they are serving. Therefore, it is proven that it is one of
the good ideas to never lose the touch when it comes to the people the company they are serving.

Strategic management 5
Therefore, it is also seen that the company must believe in focusing on what the competitors are
doing and needs to compare the customers’ feedback to company data (Sycara, et al, 2013).
Other than this, the course of action, which the amazon should follows, is that they
should majorly believe in maintaining the customers centricity. As this aspects highlights that the
rather than focusing on what their competitors do, they should tries to stay one step ahead of
their customers so that they can easily fulfill their requirement without asking. Hence, this aspect
of amazon will highlight that they are obsessed with the customer’s experience, as they love to
prioritize their needs and desires above anything else. Therefore, all this will shows that the
amazon is so customer-centric company (Goodman, 2019).
Other than this, the company should also focus on its innovation, likewise, coming up
with the new ideas, new ways of doing it, not in the sake of creativity or any change in the
organization but to impress the stockholders as well as the customers who will buy them
ultimately. Therefore, being innovate for any organization is very important as this change or
innovation not even gives the company the new vision and the objective but also leads them to
the newer path, which will also further help them to grow and generate success in longer run.
Corporate agility, maintaining corporate agility mainly highlights about the speed at
which the company do execute the planned objectives and ability to remain flexible and
adaptable to changes regardless to any stage of the business growth. Along with this, business or
the company should also lead to the continuous optimization, which is mostly the hardest task for
the company. As optimization is about improving processes so the company should opt this as it
leads to the most efficient and helps in bringing more values to customers, which results in
higher profits.
Lastly, the company should also take risks for the market leadership, similarly, the
amazon should take various risks in order to analysis market more specifically and work over it
so that after knowing market what demand more and target that and earn more of profit in less
time. On internal basis, the company should makes employees think like owners, as the company
should focus on hiring the versatile and talented employees which will further leads to personal
growth as well as companies success. As success is largely affected when a company attracts,
retains, and motivate employee (Kimble, & Bourdon, 2013).

Strategic management 6
In terms of strategic goals which amazon needs to advance the chance to enter or needs to
enlarge its processes into the more emerging marketplaces, other than this, they need to focus on
growing physical online goods and improvise its competitiveness against the other big dealers
and also to involve their clienteles more with their product. Moreover, amazon needs to improve
their future strategic goals just as they need to grab an chance to recover their technological
actions and administrative strategies and reduces the counterfeit sales. Lastly, they should also
focus on more acquisition of e-commerce companies, which helps in improving the companies’
capacity and reduces the competition level; hence, this will help the organization at large for
maintaining its success over years.
Another strategic goal for future, which an Amazon company should set, is right from
starting the company should continue diversifying itself. With numerous of products and the
services the company should explore more and through this attract more and more of customers
and this will finally leads to the generation of more success of the organization in short time
(Williamson, et al, 2013).
Another strategic aspect or goal, which the amazon should set for future, is maintaining
its cost leadership, by maintaining the economies of scale; amazon will proficiently reins its cost
and lowers its inventory replacement time. Hence, by the maintaining the strong value chain
system it will surely help the company to maintain its low-cost structure (Nielsen, Flamholtz, &
Randle, 2012).
Along with this, the company should also work more over the go global act local strategy
in which they needs to develop more of the companies with its local source companies which
helps it in rival against the local rivals. Thus, it will be helpful in understanding the confined
needs and amenities as per the countries culture.
Conclusion-
From the above report, we can conclude that, strategic management plays a vital role in
the forming an future structure of the organization. Similarly, Amazon a well-known company
applies the various strategic techniques in order to see growth in the future. Other than this,
Amazon has applied various kinds of strategies which has the major impact over the earnings

Strategic management 7
and success of the organization. Along with this, certain course of actions are also performed for
the future such as the amazon need to work over customer aspects, over time they need to work
over the technological aspects, innovate them timely and retaining and ensuring the right talent
which majorly affects the workings of the organization and the future success.
Recommendations-
By seeing all the strategic aspects, certain recommendations which Amazon needs to
adopt for future success are-
 Amazon needs to combine the market supremacy by improving its promotion
strategies, working over its promotional activities, and maintaining their competitive
advantage over the others companies.
 Amazon also needs to work over its strategies and with them, they need to deal with
the global controversies and also manage it application features such as technology
aspect proficiently to reduce the undesirable advertising in the market.
 Thirdly, with time, Amazon needs to enhance its strategic entry aspect and also
applying and accepting the growth opportunities so that in future it leads to greater to
the company’s name and fame worldwide (Shimizu, 2012).
 Lastly, the company also needs to increase their modest edges and increase the gap in
among the amazon and its opponents. Moreover, should also work to enhance the
system safety for the safeguarding of client’s right as all deals goes through internet
transactions (West, Ford, & Ibrahim, 2015).

Strategic management 8
References
Barros, A. P., & Dumas, M. (2016). The rise of web service ecosystems. IT professional, 8(5),
31-37.
Cloud, A. E. C. (2011). Amazon web services. Retrieved November, 9(2011), 2011.
David, F. R., & David, F. R. (2013). Strategic management: Concepts and cases: A competitive
advantage approach. Pearson.
Fusaro, V. A., Patil, P., Gafni, E., Wall, D. P., & Tonellato, P. J. (2011). Biomedical cloud
computing with amazon web services. PLoS computational biology, 7(8), e1002147.
Goodman, J. (2019). Strategic customer service: Managing the customer experience to increase
positive word of mouth, build loyalty, and maximize profits. Amacom.
Hill, C. W., Jones, G. R., & Schilling, M. A. (2014). Strategic management: theory: an
integrated approach. Cengage Learning.
Iyer, B., & Henderson, J. C. (2012). Business value from clouds: Learning from users. MIS
Quarterly Executive, 11(1).
Kimble, C., & Bourdon, I. (2013). The link among information technology, business models, and
strategic breakthroughs: Examples from Amazon, Dell, and eBay. Global Business and
Organizational Excellence, 33(1), 58-68.
Nielsen, C., Flamholtz, E. G., & Randle, Y. (2012). Corporate culture, business models,
competitive advantage, strategic assets and the bottom line. Journal of Human Resource
Costing & Accounting.
Shimizu, K. (2012). The cores of strategic management. Routledge.
Svee, E. O., Giannoulis, C., & Zdravkovic, J. (2012, June). Towards consumer preference-aware
requirements. In International Conference on Advanced Information Systems
Engineering (pp. 531-542). Springer, Berlin, Heidelberg.

Strategic management 9
Sycara, K., Paolucci, M., Ankolekar, A., & Srinivasan, N. (2003). Automated discovery,
interaction and composition of semantic web services. Web Semantics: Science, Services
and Agents on the World Wide Web, 1(1), 27-46.
West, D. C., Ford, J., & Ibrahim, E. (2015). Strategic marketing: creating competitive
advantage. Oxford University Press, USA.
Williamson, P. J., Ramamurti, R., Fleury, A., & Fleury, M. T. L. (Eds.). (2013). The competitive
advantage of emerging market multinationals. Cambridge University Press.