Analysis of Amazon's Business Model and Strategies

The assignment analyzes Amazon's business model and strategies, highlighting its success as a pioneer in online retailing. It explores how Amazon has expanded its offerings beyond books to become a multi-product retailer, leveraging corporate and advertising procedures to grow globally. The document also touches on the challenges of supply chain management and changing customer demands, emphasizing the significance of innovation and adaptation in today's business environment.

STRATEGIC
MANAGEMENT

Table of Contents
INTRODUCTION...........................................................................................................................1
Amazon Strategy..............................................................................................................................1
Future challenges for Amazon.........................................................................................................4
Potential strategies to overcome the challenges...............................................................................6
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Amazon is an American electronic e-commerce corporation which serves the varieties of
product and services to its customers in the market. It is one of the most successful online retailer
in the digital world which earn maximum profitability and market share in every year. Amazon is
an American driving web based business electronic association which was set up in Seattle,
Washington. It is among the best web based provider of merchandise and items. Amazon was
begun as an online bookshop and later on, it created itself to supply gadgets and delicate
products. It will examine the foundation and other data identified with Amazon. Furthermore, it
will likewise recognize and decide the allotted business enthronement in regard to Amazon. The
present report provides the detail knowledge and understanding about the Amazon strategy and
its existing practices in the competitive business environment.
Amazon Strategy
Amazon is an American electronic commerce and cloud computing company that was
established on 5 July 1994 by Jeff Bezos. It is the largest internet retailer in the world on the
basis of revenue and market capitalization and comes on the second position after Alibabna
group in terms of total sales. The organization initially went into US trade exchanging the year
1995 by Jeff Bezos; it accomplished a high development in ten years by growing its business in
numerous nations and markets. Amazon based its focuses in Europe, US and Asia with the goal
of dealing with the conveyance of item from the provider to the clients. The organization
expanded its quarterly deals income consistently, the money related report expressed that
Amazon's US advertise outperform the aggregate global pay of the business. As the organization
was begun by offering second hand books at little scale, it has colossally differentiated the scope
of its items. Amazon now offers garments, adornments, PCs, brandishing merchandise,
magnificence items, furniture, toys and relatively every item the clients may get a kick out of the
chance to purchase. The organization works the destinations in various ways; it centers around
stocking and offering its own particular items from mainstream and trusted providers inside the
satisfaction focuses, enabling stores to use Amazon as their online entrance for advancing the
utilized and existing items, welcoming individuals to join and offer their items at the online sale.
The primary quality of Amazon's network access is the exceptionally creative, flexible and
focused on client interface. Amazon has confronted numerous issues and boundaries since quite
a while, however as indicated by the current reviews and reports it is producing a high income
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and development in the worldwide economy or market. Amazon has built up a few intends to go
into more markets for building up its business around the world. The real quality of the
organization is the viable providers over the world that causes Amazon to give viable
administrations to their clients effectively and productively. Further, Amazon needs to enhance
increasingly and build up their viable position. Keeping in mind the end goal to dissect and
decide the execution of Amazon as of late, the budgetary reports can be shown.
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The delineations express that the organization is creating a high net benefit with decreased costs
which implies the organization centers around minimal effort of generation which is useful for
acquiring net benefit. Amazon is effectively working its business in the worldwide market with
the assistance of compelling administrations and procedures in their business.
Amazon is considered as one of the leading online retail company and is indeed a pioneer
in the online retailing space. It was started as online book store but its success in its venture
spurred it to diversify into selling anything that can be sold online. Through effective corporate
and marketing strategies, the management is able to expand its business in nearly all over the
world. The low price strategies and prompt servicing, Amazon has able to cherish the hearts of
people and maintain top position in their preference lists of online shopping site. Amazon
generic corporate strategy can be described as concentric diversification. The management
focuses on improving and enhancing the use of technologies in order to improve the capabilities
and performance of the organization. With high tech information systems and updated software
helps the organization to reach to the customer needs and efficiency effectively and efficiently.
The strategy of the company is to provide different types of products at the lowest price in
addition to some extra benefits that helps in retaining and attracting the customers. Indeed the
strategy has paid off well as the organization has become number one online retail company in
all over the world. In order to sustain in the competitive environment, the management used
generic strategy model which is described below:
Table 1: Amazon Generic Strategy
Competitive Advantage
Competitive
Scope
Low Cost High Cost
Bro
ad Overall Cost Leadership Differentiation
Nar
row Cost Focus Differentiation Focus
From the above matrix, it can be understood that management is focus on both cost and product
differentiation. This helps the management to sustain in the competitive environment and assists
in promulgating the profits, revenue, sales and eventually customer base (Rothaermel, 2015).
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Future challenges for Amazon
On the basis of current research it has been found that Amazon company is facing the
issue regarding customer choice and their actual demand. Many customers require fastest and
easiest way to buy the product but sometime Amazon fails to accomplish it. Thus, it can be said
that Amazon have major issue regarding the supply chain management and distribution because
it operates its business in several countries. However, it has used several impressive strategies
and practice that assists to Amazon in carrying out its business operation more effective and
efficient manner. By use of the effective strategies and practices, Cited venture have successfully
developed its strong position in the market and attract large numbers of customers. Following are
some future challenges which may face by Amazon company- Technological challenges- This is one of the major challenge which may face by
Amazon company in the future. As technology is continuously developed and it directly
affects every business organization (Bah and Fang, 2015). The innovative component or
elements have accomplished an incredible significance in the present world. Every single
kind or business whether retail or online relies on data innovation or other type of
advances keeping in mind the end goal to give compelling and better administrations to
their clients Amazon needs to center around mechanical improvement and receive
different advances for playing out the business parcels and increment the efficiency or
profitability. Due to changing technology at regular basis, Amazon may invest the large
amount of capital for purchase the new and advance technology. Furthermore, it will also
need to provide training and development to its employees for learn the methods and
criteria to operate the technology. Thus, it can be said that changes in the technology is
one of the major challenge for the Amazon through which company performance may
influence. Political challenges- Amazon is a major name and brand in the internet business
industry, it needs to support this brand an incentive by maintaining a strategic distance
from any lawful debate and for this they have to successfully recognize and dissect the
lawful approaches forced on the organizations (Virglerová, Dobes and Vojtovic, 2016.).
The referred to firm has an alternate lawful office that oversees and resolves the lawful
difficulties and issues of the company. This can help the organization to work its business
tasks easily and viably in the new market. Political factor is very changing component in
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the business environment that affect the Amazon company in large manner.
Governmental rules, regulation, legislation, norms, law, system etc can change over a
period. Due to changing government policies, practices and legislation, company have to
set its business accordingly (Barney and Hesterly, 2016). In order to carry out the
business operation in the competitive business environment, it is very important to follow
all legislation and policies which developed by government. The issue regarding this
challenge is that Amazon have to change its business operation according to the
governmental legislation and norms. Furthermore, as Amazon operates its business in the
several countries and in all countries there are different legislation, governmental rules,
practices and policies. Thus, Amazon has to follow different legislation and norms
according to the different countries. This is the major challenge for the Amazon to
operate its business according to the different political condition in the different
countries. Customer taste and preferences- This is another one of the major challenge which may
face by the Amazon company in the future. As entire profitability and productivity is
largely depends upon the customer satisfaction thus it is very important for corporation to
identify the actual needs and requirement of customers and deliver them product and
services accordingly (Bagautdinova, N.G. And et.al., 2014). Customer taste, life style,
demand, preferences, choice, living standard may change in the future because customer
behavior is very dynamic. It is very essential for Amazon for cope up with these changes.
Company have to understand the customer taste, preferences, choice, living standards,
culture, background, education etc so as it will effectively fulfill the needs and
requirement of customers. Supply chain management and distribution- This is another one of the major challenge
which may face by Amazon company in the future. As Amazon operates its business in
the different countries so some time it may face the issue regarding the supply chain
management (Botha, Kourie and Snyman, 2014.) . It is very important for the Amazon to
set effective practices, system and method of supply chain management in the different
countries through which it can set its business operation in the different countries in more
effective and efficient manner.
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 Tough competition- This is another major challenge that may affect the performance of
Amazon in the future. As online shopping sector is continuously improving in the present
time and there are several competitors of Amazon available in the market. In order to face
this competition company have to make different strategy and adopt impressive practices
so as it can sustain in the market for long time.
Potential strategies to overcome the challenges
As per the above discussion it has been identified that there are various kinds of
challenges which may face by Amazon company in the future. One of the major challenge is
regarding the technology through which its performance may affect in negative manner and
financial performance can also influence. In order to overcome the challenges regarding
technology company have to conduct the effective research and update its technological
infrastructure time to time (Madsen and Walker, 2015). By develop systematic budget for
purchase new technology and update infrastructure regularly company can face this
technological challenge in more effective and efficient manner. On the other hand another major
challenge which may face by Amazon in the future is competition with other rivalry. Thus, for
overcome this challenge in the future company have to conduct effective market research. By
market research and business environment analysis, company can effectively survive its business
activities and function in the competitive business environment. By market research and business
environment analysis, company can understand the rivary strategy and practices. By help of this
strategy company can develop its own different strategy and tactic through which it can face the
tough competition in the market. In order to overcome the challenge regarding to the political
changes, company should adopt all necessary legislation and norms that helps to business in
effective manner. Company should follow all legislation and regulation that developed by
government so as it can carry out its business in more secure manner. By help of this legislation
it also provides protection to customer, employees and other stakeholders.
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CONCLUSION
From this entire report it has been concluded that Amazon is considered as one of the
main online retail organization and is in fact a pioneer in the internet retailing space. It was
begun as online book shop however its achievement in its wander prodded it to broaden into
offering anything that can be sold on the web. Through compelling corporate and advertising
procedures, the administration can grow its business in about everywhere throughout the world.
As innovation is ceaselessly created and it straightforwardly influences each business
association. The imaginative segment or components have achieved a mind boggling centrality
in the present world. Supply chain management and changing customer demand is another one of
the most significant challenge that may affect performance of Amazon company.
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REFERENCES
Books and Journals
Dutt, N. and Vidal, E., 2015. Buy Low Sell High: Corporate Strategy and Product Portfolio
Change. In Academy of Management Proceedings (Vol. 2015, No. 1, p. 13487). Briarcliff
Manor, NY 10510: Academy of Management.
Rothaermel, F.T., 2015. Strategic management. McGraw-Hill Education.
Madsen, T.L. and Walker, G., 2015. Modern competitive strategy. McGraw Hill.
Bagautdinova, N.G., Galieva, G.T., Pakhmutov, Y.O. and Pratchenko, O.V., 2014. Methods of
regulation of processes of innovation business development. Mediterranean Journal of
Social Sciences, 5(12), p.75.
. State control over small business development: approaches to the organization and problems
(experience of the Republic of Tatarstan, the Russian Federation). Academy of Strategic
Management Journal, 15, p.8.
Zalengera, C., and et.al.,, 201Krotkova, E.V., Mullakhmetov, K.S. and Akhmetshin, E.M.,
20164. Overview of the Malawi energy situation and A PESTLE analysis for sustainable
development of renewable energy. Renewable and Sustainable Energy Reviews, 38,
pp.335-347.
Botha, A., Kourie, D. and Snyman, R., 2014. Coping with continuous change in the business
environment: Knowledge management and knowledge management technology. Elsevier.
Bah, E.H. and Fang, L., 2015. Impact of the business environment on output and productivity in
Africa. Journal of Development Economics, 114, pp.159-171.
Virglerová, Z., Dobes, K. and Vojtovic, S., 2016. The perception of the state's influence on its
business environment in the SMEs from Czech Republic. Administratie si Management
Public, (26), p.78.
Barney, J.B. and Hesterly, W.S., 2016. Strategic management and competitive advantage. Upper
Saddle River, NJ: Pearson Prentice Hall.
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