Strategic Planning for Amazon: Critical Assessment and Evaluation

STRATEGIC
PLANNING

Table of Contents
INTRODUCTION.........................................................................................................................3
TASK..............................................................................................................................................3
Critical assessment of process used by organization to determine their strategy........................3
Critical evaluation of impact of internal and external environmental variation on
organizational strategy.................................................................................................................5
Review of organizational strategic plan providing an action plan for the organization on the
basis of change in either internal or external environment..........................................................8
CONCLUSION..............................................................................................................................9
APPENDIX 1................................................................................................................................11
Business plan for Amazon.........................................................................................................11

INTRODUCTION
Strategic management is the process of management of resources which are used by a
business to meet their targets and objectives (Albrechts, Balducci and Hillier, 2016). The process
of strategic management comprises of setting targets, evaluating competitive environment,
understanding internal and external business environment, forming strategies and ensuring that
all strategies are successfully implemented in the organization to meet the desired targets.
According to John A. Pearce II and Richard B. Robinson Jr., “Strategic management
is a set of actions and decisions resulting in formation and implementation of strategies which
are designed to accomplish the objective of business” (Strategic Management, 2018).
In the view point of Garry D. Smith, Danny R. Arnold, Bobby G. Bizzell, “Strategic
management is approach of evaluating the present and future business environment, formulating
organizational objectives, forming, implementing and controlling decisions which are focused on
accomplish the desired organizational objectives in the current and future business environment.
Amazon is an American multinational technology company which focuses on e-
commerce, cloud computing, AI and digital streaming services. The company was started by Jeff
Bezos in July, 1994 and is one of the leading retail companies. Amazon has strengthened its
roots in market and is also operating with other subsidiary companies, such as Audible, Zappos
and many others.
The report is based on understanding the process which is used by an organization to
determine their business strategy and identify how change in internal and external environment
can create an impact on strategy of an organization. The report will also review the strategic plan
which will define an action plan for the business on the basis of change in internal or external
environment.
TASK
Critical assessment of process used by organization to determine their strategy
The business strategy of Amazon focuses on investing in technology, improving its
logistics application, enhancing their web services by fulfillment capacity, M&A strategy, R&D
activities in logistics and securing their inventions with patents.

Ansoff matrix of Amazon
Ansoff matrix was proposed by H. Igor Ansoff in 1957 and this framework is used in the
strategy stage of marketing planning process. This tool helps organization in determining
opportunities for business growth. Ansoff matrix comprises of 4 growth strategies which are
market penetration, market development, product development and diversification.
The implementation of Ansoff growth matrix strategy followed by Amazon has been
outlined below:
`Market penetration- Market penetration promotes Amazon to sell the existing products to the
existing market. The company has been executing the same strategy since starting and this has
been executed aggressively through employing number of marketing techniques such as
advertising on social media platforms and sales promotions (Amason and Ward, 2020). The
approach is effective quite well in 2020, the company's net revenues in the United States alone
are estimated to reach $263.5 billion.
Market development- Market development is the process of discovering new markets in
which to sell present products. Amazon has built a huge number of new markets throughout the
years. Its products are sold in over 100 countries and territories outside of the United States. The
United States (home market), the United Kingdom, Germany, and Japan are its key markets. In
contrast, Amazon failed in one of its most promising areas, China. It originally came to the
country in 2004 and rapidly became well-known. However, due to competition from Alibaba and
JD, it announced in 2019 that it would close its doors.
Product development- Product development is the next option to be analyzed in
Amazon's Ansoff Matrix. Amazon began as an online bookshop in 1997. Since then, it has been
aggressively expanding its product line. In fact, the company's website currently sells practically
everything. Amazon regularly introduces new products and services (Amrollahi and Rowlands,
2017). It released three new Alexa-enabled items in early 2021, for example: a smart sticky notes
printer, a nutrition scale, and a cuckoo clock. Some of its products and services, on the other
hand, have failed miserably in the past, losing the firm billions of dollars. Amazon Spark,
Amazon Storywriter, and Dash buttons are some instances in this regard.