Strategy Development in Cross Border Organizations - Desklib

This article discusses the critical review of Amazon's established process for strategy development and formulation, identification of methodologies by which strategy is evolved and developed for cross border or global organisations, and the opportunities and future of strategy development and its impact on the future organisations structures, administration and key stakeholders dynamics. It also critically analyses and evaluates the factors that influence Amazon's strategy, including its collective strategy, policies and strategy issues, and their influence in corporate strategy.

Strategy Development in Cross Border Organizations
Strategy Development in Cross
Border Organizations
Amazon Inc.
By
Mourad E. Mazouni
Level 8 Strategic Management
and Leadership

Strategy Development in Cross Border Organizations P a g e | 1
Table of Content
Executive Summary........................................................................................................................................................ 2
Chapter 1: Critical Review of Amazon’s established Process for strategy development and
formulation........................................................................................................................................................................ 3
1.1 Critically analyse the political, social, ethical and operational needs for common
strategy in cross border or global organisations and administrations.................................................3
1.2 Identification of methodologies by which strategy is evolved and developed for cross
border or global organisations to enable external collaboration at a national and international
scale.................................................................................................................................................................................. 4
1.3 Opportunities and future of strategy development and it's impact on the future
organisations structures, administration and key stakeholders dynamics.........................................5
Chapter 2: Critical Analysis and evaluation of factors that influence Amazon’s strategy...................6
2.1 Critical examination of the essence of Amazon’s collective strategy and its emergence
from the multinational conglomerate policies, administrations and stakeholders engagement
............................................................................................................................................................................................ 6
2.2 Critical examination of Amazon’s key policy and strategy issues and their influence in
corporate strategy...................................................................................................................................................... 6
2.3 Explicate how strategy is influenced by the reality of factors including political, global,
public interest, media impact, and social, cultural and religious in the modern context...............7
Chapter 3: Amazon’s strategy development and articulation process and a proposal a
comprehensive cross-border operations strategy recommendation.........................................................8
3.1 Critically assess how to resolve tensions between cultures and ethics of contributing
organisations, administrations and key stakeholders.................................................................................8
3.2 Critical review of strategic intelligence its instrumentality in the development and
formulation of strategy............................................................................................................................................. 9
3.3 Original contribution to the formulation and development of strategy........................................9
References........................................................................................................................................................................ 11

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Executive Summary
Amazon which was founded in 1994 is presently the largest e-commerce company
which is present in more than 12 countries and ships products across more than 165
countries (Grant, 2016). The vision of Jeff Bezos is to become the most customer centric
company on the face of planet earth. Jeff Bezos the founder and CEO of the company
thus create all the policies and procedures in and around the customers (Madsen &
Walker, 2015). Strategic goals and objective of Amazon are to create a place which
provides for all the possible goods a customer might search for on the Internet, improve
the customer experience for the audience of Amazon, push the envelope of service and
deliver quality product with a lightning speed to its esteemed customer. The mission
statement of Amazon is to be” earth’s most customer-centric company and to build a
place where people can come to find and discover anything they might want to buy
online”. Amazon is focussed on its customers which is the backbone of its success.
Amazon is extremely focussed towards the welfare of the society and the community
and its efforts in CSR activity is a reflection of the same. Amazon focus is to ensure
environmental sustainability for the community. The above research will serve as the
basis of completion of the task as mentioned in the assessment sheet (Greenspan,
2015).

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Chapter 1: Critical Review of Amazon’s Established Process for strategy
development and formulation
1.1 Critically analyse the political, social, ethical and operational needs for
common strategy in cross border or global organisations and administrations
The world has become more of a global village, thanks to Globalization and advent of
Internet. Amazon can also be seen as an entity which was created to reap in the fruits of
Internet marketing. Amazon, which was established in the year 1994 has its
headquarters in Seattle and is present in more than 12 countries, while the company
ships its products to more than 165 countries. The need for common strategy arises at
Amazon due to similar socio/cultural trends, demographics, growth and proliferation of
digital technology. Amazon believes in creating strong strategic partnership with the
sellers and the delivery network, this helps Amazon in striking a balance between the
local and the centre. (Kim, Mauborgne,2014).
PESTLE framework is a macro environmental analysis which helps to explain the
Political, Economic, Social, Technological, Legal and Environmental scenario to foray
into an International market. Amazon uses PESTLE to assess the conditions which could
impact its presence in various International markets. For instance, Amazon realized in
its initial days that it would not be able to make an impact in China, particularly owing
to its difficult political condition. India, for Instance was a market which was one of the
fastest growing market, and the political conditions in India were highly feasible and
conducive for the business organization (Piercy, 2016).
GLOCAL strategy or as it is called as “Go Global and Think Local” has favoured Amazon
significantly, the recent example of it can be seen by the success story it created in India.
The company was launched in the year February 2012, reported an earnings of $ 485
Million in the year 2017. India has become the largest and the fastest growing market
for Amazon. This is a reflection of the profound success of GLOCAL strategy of Amazon.

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1.2 Identification of methodologies by which strategy is evolved and developed
for cross border or global organisations to enable external collaboration at a
national and international scale
As mentioned earlier, Amazon strategy is a reflection of its efforts towards giving
impetus to the domestic produce and ensures cultural, ethical and social consideration
while formulating the strategy. The company uses plethora of strategic marketing tools
to create the strategy for cross border and to enable collaboration on a national and
international basis. A couple of tools and methodologies used by Amazon are as follows:
 SWOT Analysis- SWOT analysis is a micro-environmental tool which is used to
identify the strength and weakness which is internal to the organization and to
take advantage of the opportunities and to stay away from the threat. Amazon
does this for every collaboration in an international economy and after due
consideration of the opportunity it moves to the international market.
 PORTER 5 Forces-Another strategic framework which is of great utility in
identifying the potential of the market. This framework is used by Amazon to
identify the market attractiveness and profitability before foraying into
international markets (Stahlbrost & Lassinantti, 2015).
 Decision Making tools- Amazon uses plethora of decision making tools such as
T-Chart, Pareto Principle, Marketing research and more such methods are used
to arrive at the decision of choosing the market, analysing all the pros and cons
for the market. For example, In the T-Chart, all the factors are considered which
are in support of the new market, and the factors which are against it, post that a
decision is made (Rothaermel, 2015).
 Investment Strategy-Amazon has different strategies in different markets, for
example at times it uses Greenfield investment in the international markets and
at other times it uses collaboration as the strategy to enter in the international
markets. The investment strategy is picked after careful evaluation of the
situation and the benefit surrounding the proposed strategy.
Amazon believes in building strategic partnerships to ensure an efficient delivery
network and also to give impetus to the domestic producers. The company also ties up
with various consumer goods manufacturers like Samsung, Apple, LG and other

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organization to offer exclusive deals to the customers. Amazon also partners with
various mobile service providers and give consumers a chance to experience Amazon
Prime video services. Thus, Amazon strategic partnership is a reflection of its efforts to
provide better services and deals to its customer base.
1.3Opportunities and future of strategy development and it's impact on the future
organisations structures, administration and key stakeholders dynamics.
E-commerce has taken the world by storm, and plenty of companies in the present day
are going either with only the click model or click and mortal model, both ways, the
sector is booming at an enormous rate. Amazon earned revenue of USD 170 Billion in
2017, the figures are not just huge, but they are a harbinger of positive business outlook
(Brana et. al., 2015). Some of the opportunities as identified for the future development
of strategy are as follows:
 Customer experience- The need is to enhance the experience of the customers
while they are shopping online. In order to do so, Amazon has to come up with
engagement strategy for its customers.
 Drone delivery-Faster delivery is one of the key success factors for e-commerce
and for Amazon, in order to do so, the company has started Beta testing of its
drones to ship product to the customers. The same has to be implemented at the
earliest and to be implemented in Asia Pacific markets as well.
 Market expansion-Although Amazon ships products in over 16 countries and is
present in approx. 12 countries, however it is advised that Amazon moves
increase its presence in other countries and open up new warehouses to cater to
the increasing demand of the customers(Mane et. al., 2017).
 Amazon-Go-Amazon is coming up with this new
 Machine learning and AI- Amazon has to create strategy for international
markets based on the technological advancement, for example the country must
and should have Machine Learning and Artificial intelligence.
Thus, it can be easily said that Amazon’s international expansion strategy or
collaboration strategy is based on International expansion strategy, decision making
tools, and technological advancement. The strategy thus is the manifestation of its
strategic goals and objectives.

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Chapter 2: Critical Analysis and evaluation of factors that influence Amazon’s
strategy
2.1 Critical examination of the essence of Amazon’s collective strategy and its
emergence from the multinational conglomerate policies, administrations and
stakeholders engagement
In order to succeed in the market place or the industry, each and every organization
needs a common strategy. A common or collection strategy can be understood as a
collaborative effort among the people at various stages or levels in the company.
Amazon here utilizes the synergies of all its operational, marketing and functional
departments to add innovation and creativity in its business process and systems.
Collective strategy is formed by Amazon by the virtue of employee empowerment and
brain storming activities. Amazon believes that its employees are the biggest strength
and thus they involve them in various decision making strategies before foraying into
international destination. It becomes pertinent to create collective strategy which has to
be in sync with the policies of the organization, administration and key stakeholders, as
only then a resolute strategy can be formed(Lehmann,2016).
The important part here is to identify the SMART objectives of goals before formulating
the strategy. The SMART goals can be understood as specific, Measurable, Attainable,
Realistic and Timeline based. Thus, Amazon creates goals which can be monitored and
evaluated on the basis of their feasibility, thus reaching to the creation of resolute
strategy to achieve these goals. It becomes important that a strategy is based on the
culture of the organization, its policies and procedures so that every stakeholder is able
to understand the rationale of the strategy formulation. One of the recent examples of
this is the Beta testing of drone delivery to expedite the delivery of its products to the
consumers.

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2.2 Critical examination of Amazon’s key policy and strategy issues and their
influence in corporate strategy
The section will critically analyse some of the key policies and strategy which influences
its corporate strategy. For instance, one of the hugely anticipated strategies of Amazon
is GLOCAL, which helps Amazon to realize the utility and the potential of the domestic
manufacturers. Another strategy of Amazon, which is inclined towards providing fastest
delivery of services, led it to create Amazon Prime. The company realized the growing
potential of the online entertainment sector; this led the company to create Amazon
Prime Video to outsmart the competition from Netflix.
Amazon focuses on its 4P’s of marketing while formulating its product, price, place and
promotion strategy. For instance, the pricing policy of Amazon is a reflection of the
purchasing power parity analysis of the consumers; similarly the company’s product
strategy is based on the consumer shopping behaviour. The promotional strategy of
company is a combination of both traditional and contemporary tools of marketing.
Thus, each and every policy or the strategy of Amazon is created by using different
management tools such as PESTLE, Porter 5 forces, SWOT, 4P of marketing and Ansoff
matrix.
The key policies and strategical issues which play an important hand in influencing
strategy are goals and objectives of the organization, Policies and procedures of the
organization, culture of the organization and feasibility study on the strategical
objectives. It is important to understand each element in depth to understand the
elements which influence the strategy(Luthans & Doh, 2018).
Goals and objectives define a clear path for the organization, based on which the
strategy for the expansion is created. For example when Jeff Bezos created a goal for the
Amazon to cater to the growing needs in the Asian market, based on it he created
strategy to enter the market and achieve the position of a market leader.
In the similar manner, Amazon Prime Delivery, Millions of Product in its offering,
customer success team, sentimental analysis of social media is the reflection of
organization policies and procedures to be customer centric in nature. Thus, the

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company after defining its policies and procedures implements operational strategy in
sync with it(Kaur & Wadera, 2018).
Culture in an organization plays a very important role, more so, when the organization
is truly global in nature. An example of it is, decentralisation is the culture at Amazon,
and thus the company creates strategies to ensure that decentralization is maintained in
all of its offices.
2.3 Explicate how strategy is influenced by the reality of factors including
political, global, public interest, media impact, and social, cultural and religious in
the modern context
As explained earlier, strategy is a cumulative factor of various forces which are internal
and external to the organization. According to Richard Rumelt, a good strategy is
defined as a coherent mix of policy and actions designed to surmount a high stake
challenge. Forces such as Strength and weakness which are internal to the organization
help in identifying the strength and then leveraging the strength to attain a competitive
edge in the market. Besides this there are certain forces which are external in nature
and the company cannot do anything about it, however it can create a risk management
strategy to prevent the damage done from such forces (Snee, DeVeaux & Hoerl, 2014).
Porter 5 forces framework is another tool or the methodology which influences the
strategy of any organization. The porter 5 forces model determines the market
attractiveness and the industry rivalry based on the 5 forces. A thorough analysis of
Porter 5 forces helps the organization to come up with a strategy to use the factors to its
advantage.
In the similar manner, media and religion also has a strong impact on the business
organization. For example, Amazon cannot sell any such product on its website, which
might affect religious sentiments of its consumers, thus company has to create a
strategy to prevent the same. For example, in the UK, Amazon has to concur with
electronic commerce (EC Directive) regulation act 2002.

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Chapter 3: Amazon’s strategy development and articulation process and a
proposal a comprehensive cross-border operations strategy recommendation
3.1 Critically assess how to resolve tensions between cultures and ethics of
contributing organisations, administrations and key stakeholders
Tension and conflict in an organization are inseparable; moreover conflict helps in
identifying the lacunae in the company’s policies and procedures which lead to conflict
in the organization. These tension and conflicts among the stakeholders and the teams
should be seen in a positive light and efforts should be taken to carefully handle the
conflict (Raford, 2015).
Many theories in the past help in solving the tension in the organization, to a large
extent the four strategies can be used in conflict handling, which can be seen as:
 Collaboration-Conflict or tension is caused due to some reason or an issue
which is pricking some other person. Within the purview of collaboration
strategy, both the parties are brought together on the same platform and a win-
win strategy is created for them (Prentice, Han & Li, 2016).
 Compromising-In this strategy, one of the parties gets into a compromising
mode and agrees to give the other party more benefit.
 Smoothing-In this strategy, the managers and management use communication
and other tactics to smoothen down the tension.
 Forcing-As a part of this strategy to reduce tension in the organization the
management or the managers take the side of one party after evaluating all the
points of the scenario, based on which a decision is forced on the other
party(Ritala, Golnam & Wegmann,2014).
 Withdraw-This is a strategy which is also known as avoidance strategy, the
management does not give any attention to the tension hoping that it would
subside on its own.
3.2 Critical review of strategic intelligence its instrumentality in the development
and formulation of strategy
Strategic intelligence can be understood as collection, processing and analysis of
information pertaining to the market, industry, country and the competitors with the

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view of creating a strategy to achieve sustainability in the business operations and
cycles. Strategic intelligence is a very important concept and organizations use this data
not only to collect information, but they overlook all the information and based on it
come to a decision (Smither, Houston & Mclntire, 2016).
Strategic intelligence is collected by intensive marketing research, interviews and
questionnaire with third party sellers and surveys, all this information helps Amazon in
listing products which are not sold by other parties or based on the consumers interest
related to the product. Amazon uses advanced data analytics to identify the customer
buying pattern, on the basis of which the company creates a curated shopping list of tis
customers. Amazon effectively uses the data from the customer insights to remarket or
retarget the product towards which the customers showed initial interest. Further to
this, the strategy is also used to collect valuable data from social media platform by
doing sentimental analysis. This helps Amazon to understand the pain points of the
customers, which are then addressed by the company by tweaking its business policies
and procedures (Ristoski, Bizer & Paulheim, 2015)
Thus, the strategic intelligence is used to create strategy to stay upbeat in the market
and not get affected by any competition, also it helps the company to come up with the
product which customers desires the most. An example of business intelligence can be
linked with creation of Amazon prime. Amazon identified that the online shoppers value
the organization that ensures the delivery of the product in the fastest possible time, it
was one of the factors where the company sleeked improvement. Amazon thus came
with the idea of launching Amazon prime, which would not only provide fastest
delivery, but also gave benefits providing value to the customers. For instance, Amazon
Prime customers are the first ones to get onto the exclusive deals at Amazon, and the
customers are also given additional discounts on its product offering.
3.3 Original contribution to the formulation and development of strategy
As mentioned earlier, strategy is a combined result of market research, strategic
intelligence, business environment understanding and the industry knowledge. Based
on all these collected information strategy is created at Amazon. However, there can be
certain addition to the process, which would give a creative angle to formulation and
development of company’s strategy.

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 Amazon is the largest cloud services provider, even bigger than the likes of
Microsoft and Google. The company can easily use its cloud services platform to
churn the data of its customers, repeatedly and accordingly marketing them the
products based on their purchasing behaviour (Brown & Green, 2015).
 Amazon can use the intelligence of its smart employees, as they have been
working closely in the market and have a thing or two to add, which would
benefit the organization immensely.
 Amazon can use its collaboration tool, Amazon Chime to curate the thought of all
its employees, as a part of Bottom up communication approach and the same can
be presented to the management. This would also be step of the company
towards employee empowerment (ALam, Pandey & Rautaray, 2015).
 Amazon which is spread across over 12 countries and ships products to more
than 165 nations can use its customers to give them input on what strategy they
should adopt in order to woo them. It is better to ask the customers, as they are
the end customers of the company’s offering.

Strategy Development in Cross Border Organizations P a g e | 12
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