1. Were Amazon’s diversifications through Amazon Go and Amazon Elements appropriate, given the company’s resources and capabilities? Were such diversifications risky strategic moves? (200 words)
With the resources and capabilities possessed by Amazon, the diversification through Amazon Go and Amazon Elements was appropriate. Since the beginning, Amazon has focused on creating services and products that have forever changed the way people consume goods in their daily lives as well as providing exceptional customer service. Amazon’s competitive advantages are supply chain efficiency, their R&D team, customer service focus, and extremely successful marketing plans. When Amazon diversified into Amazon Go and Amazon Element, these competitive advantages played a key role in successfully diversifying the company through online and offline sales. Given the size of Amazon’s customer base, which generated $71.8 million digital sales in 2017 followed by Walmart in second place at $13 million, Amazon has a considerable online market share that can market the offline retail sales as well. Additionally, Amazon can use the data from their online customers’ purchasing habits to target marketing towards them, demonstrating its strengths in marketing, supply chain, and customer-centricity.
2. Can Amazon reproduce its online retail success in offline retail segments? Will it be able to become one of the biggest offline retail players? (150)
Yes, Amazon is the undisputed e-commerce pioneer in the USA, and is very capable of replicating its online retail success in offline retail segments. Amazon have proven efficient and effective R&D, marketing-leading innovation and strategies. Through successful and continuously evolving public relations, Amazon have created a strong and reliable brand value that has attracted customer loyalty internationally. Moving into the offline industry, Amazon continue to prioritise the same values. Amazon’s strong customer equity of its prime members offers customer loyalty, which will help to uplift their position in the offline market. Furthermore, thanks to technological advancements in AmazonGo’s checkout-free process, customers can shop easier offline while also saving time. This will ultimately attract more customers and will assist AmazonGo in becoming one of, if not the biggest, offline retail competitors.
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