Amazon's Innovative Strategy: A Business Development Report

This report provides a comprehensive analysis of Amazon's innovative strategy, organizational environment, and capabilities. It begins by introducing the company and its evolution from a bookseller to a global e-commerce giant, highlighting the application of design thinking as a key innovative trend. The report delves into Amazon's organizational structure, emphasizing its openness to experimentation and the 'two pizza rule' for team management. It examines the company's innovative trends, including its adoption of e-commerce and the introduction of services like Amazon Prime and Amazon Pay. The report identifies five key innovation capabilities of Amazon and discusses how its innovation strategy ensures strategic alignment with organizational goals. A SWOT analysis is conducted to evaluate the company's strengths, weaknesses, opportunities, and threats. The report also explores additional innovation capabilities the organization could develop and concludes with a summary of key findings and recommendations.

Running Head: INNOVATIVE STRATEGY OF TH FIRM
Innovative strategy of the firm
Name of the Student
Name of the University
Author’s Note

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Executive Summary
This report focuses on the chosen company that is Amazon. This has been an innovative
company I regard to its product offerings. Besides, Amazon innovative organizational strategy
comprises of two pieces of pizza, as proposed by the Jeff-Broz. During the first start of the era,
they used to provide consumer products such as books and magazines. Later on, making use of
the innovational strategy, concerning business firm brought about a revolution within the
business undertakings. On the other hand, within this specific report the pros and cons that stay
in favor of the concerning firm will be analysed and the effort that they make towards the
achievement of the innovational competitive advantage over the other rival business firms.
Within this specific report the innovative organizational environment, the innovation strategy,
and their innovative vision will be well discussed.

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Table of Contents
Introduction......................................................................................................................................3
Discussion........................................................................................................................................3
Organisational environment:.......................................................................................................3
Innovational trend:.......................................................................................................................4
Innovational Strategy:..................................................................................................................5
Innovational Capabilities:............................................................................................................5
How the creation of an innovational strategy ensures strategic alignment with organisation,
and why is it important?..............................................................................................................7
There are three basic steps for aligning business strategy with Innovation strategy, they are as
follows:............................................................................................................................................7
SWOT analysis of the organisation:............................................................................................8
What additional innovation capabilities should the organisation develop?...............................10
Conclusion.....................................................................................................................................11

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Introduction
The selected innovational trend is "Design thinking (Liedtka, 2018; Liedtka & Ogilvie,
2011)". The chosen firm for the formulation of the report is one of the globally recognized firms
that is Amazon. According to the official website of Amazon (Amazon.com.au, 2019), it has its
office and business undertakings in different parts of the world. Besides, the concerning brand at
the starting phase of the business was a bookselling business unit. Later, it started to be
converted into another business platform such as e-commerce as of now. Amazon started from
the region of the UK and slowly after gaining pace and major proportion of the consumer
market, it expanded into a variety of business. As of now, it provides a commodity offering that
ranges from general household products to electrical appliances.
Figure: Domestic VS International growth for online retail segments in Australia’s
Ecommerce
Source: (Webalive.com.au, 2018)

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The report aims to analyse the selected business firm in regard to the innovational
strategy, innovational trend, innovational capabilities, and that of the organizational
environment. Besides, in this report, the importance of innovation will be discussed and the
innovational strategy that ensures strategic alignment within the organizations. Thereafter, the
impact of selected organizational trend upon the selected organization will be well discussed.
Besides, a SWOT analysis will be undertaken to evaluate the strength, weakness, opportunities,
and threats that stays in the hand of the business professionals. Apart from this report will
discuss in brief how the organization organizes its innovational activities, what additional
innovation capabilities should the organization make use of.
Discussion
Organizational environment:
Amazon makes use of a unique organizational structure. As Amazon is always open
towards the invention, ideas and modern trends. According to Jeff Bezos, he claims that the
structure of Amazon is like a hospital such that new experiment can be undertaken. He further
added that the entire organizational structure had been prepared to keep in the priority of
invention activity.

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Figure: Top 5 mass merchandiser sites by unique audience in Australia
Source: (Webalive.com.au, 2018)
Moreover, he added that “Experiments are key to innovation because they rarely turn out
as you expect and you learn so much.” Within the organization, new ideas and concepts are
generated every-day, and these new ideas are being practically tested for the introduction of
innovation on a real-time basis (Szymańska et al., 2016). The information’s towards Jeff-Bezos
and a small executive committee. However, it is to be noticed that while working on a particular
project Jeff-Bezos makes the entire group short.
Innovational trend:
Jeff Bezos makes use of the six-sigma style process and decision making strategy that is
entirely based upon the data analysis of the company. It is the business process of the company
that makes it different in comparison to that of the other companies in respect of the innovation.
It has been found that over the past 22 years, Amazon has transferred from one particular sector

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to another sector. Amazon understands the innovation trend such that it stretches and moves on
from its organizational structure and product offering to another stage.
On the other hand, the use of the e-commerce platform has been undertaken by the
concerning business firm. In today’s present era of time e-commerce is one of the successful
business platforms which is on the growth phase. Much of the rivals exist within the e-commerce
platform, but still, very fewer firms can give competition to that of the concerning business firm
Amazon. Moreover, Amazon introduces trendy commodities that can capture the interest of the
consumer market (Uhl et al., 2016). Commodities like that of the Amazon Echo, Amazon Alexa,
the latest version of Amazon’s streaming music service, Amazon music unlimited, Amazon
MP3, and much more. Besides, the brand has introduced the use of the e-wallet that is addressed
as the Amazon Pay. This wallet system has provided the consumer market ease with regard to
the user experience by eliminating the various levels of the chain in the banking process.
Moreover, features like that of the Amazon primes, which classifies the entire consumer
market according to premium category allows early access to commodity offering, one-day
delivery and much more. These facilities were provided and brought into the market by this
specific brand which was an innovational move.

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Figure: Consumer’s preference
Source: (Webalive.com.au, 2018)
Innovational Strategy:
One of the most strategic innovation steps for the concerning firm Amazon is the HR
department. The innovational strategy is being proposed by the professional body addressed as
Jeff Bezos, he makes use of his two pizza rule in order to obtain competitive advantage and that
of the sustainable business undertakings. According to Jeff Bezos, every team and work groups
are required to be small; it should be so small that the entire team is able to be fed by two pizzas.
This seems to be a simple theory but is one of the key contributors towards the success of
Amazon.
Moreover, one of the professional company that of Google, has also started to make use
of the team cuts, such that they make efforts towards organizing the entire team alphabetically.

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Besides, managing a bulk of team is very hard. On the other contrary, breaking up the entire
team and classifying this small team groups into different work groups as per the required
business criteria helps in the smooth flow of business activities. Moreover, a large scale of team
groups require a bigger management system along with that of the essential apparatus
(Nedeltcheva et al., 2017).
Innovational Capabilities:
5 innovational capabilities of the concerning frim are as follows:
- Constantly tries to evolve and improve within the business process: The Company
never goes on standby mode they understand the dynamic changes that take place within the
market for which they make a number of efforts for constant development. From selling books to
streaming music, television, and film, Amazon provides an eclectic assortment of offerings that
ensure it is providing something for everyone.
- The firm separates itself from the competition: The firm does not make much of the
effort in overcoming with the rival companies in regard to the present set of products. Moreover,
the brand focuses on new product development that will be entirely new within the consumer
market (Bastos et al., 2014).
- The firm is not scared to enter into a new business: Amazon is fearless in regard to its
online venture. Besides, the firm is even very bold in approaching its expansion within the other
regions of the country. In the early era of time when Amazon enters the market, it was believed
of the consumer market that Amazon is going to change the whole food grocery chain.
- Sometimes goes against the grain: besides, Amazon is being recognized as a bigger
firm within the e-commerce industry they recently made news for departing from their tried and
true business formula and opening up a brick and mortar location. Within the city of the New-

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York, it has a larger 400 square foot office. The store comprises of a large selection of books,
and even benefits from research informed sections that are headed with phrases like “Books
Kindle Readers Finish in 3 Day.
- Their primary concern and priority are towards the consumers: They gave focus
much on consumer satisfaction. They deal with consumer-related issues as soon as possible. This
gives satisfaction among the consumer market and generates a seal of trust. Besides, it also helps
in the formulation of brand equity for the concerning firm. On the other hand, the innovation in
maintaining positive CSR is the use of the AI based bots that were previously not available (Ahn
et al., 2017).
Figure: Marketplaces merchants intend to sell on in 2018
Source: (Webalive.com.au, 2018)

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How the creation of an innovational strategy ensures strategic alignment with organization,
and why is it important?
The new innovational strategy that is being formed is a result of the present business
scenario. The present strategies of the business are being studied thoroughly by the experts and
that of the professionals. The study helps in depicting out the skills gaps and areas that required
immense attention and priority. Besides, the innovational strategy generates new sets of
standards that are composed of new strategic moves; this helps in further improvement of the
business process and yield profitable revenue for the concerning business firm. According to
statistics, 96% of executives have defined innovation as a strategic priority (Ribischon et al.,
2017). However, the lack of a clear innovation strategy is a fundamental problem especially for
established companies when optimization of existing business becomes a priority.
There are three basic steps for aligning business strategy with Innovation strategy; they are as
follows:
 Having a sound knowledge and understanding of the impact of growth strategy upon
innovation.
 Seek for search fields in order to focus on ideation.
 Transformation of the entire organization.
It is important because of the following criteria’s., they are as follows:
 To eliminated or reduce the level of workplace redundancies.
 To completely eliminate any organizational conflict that may be existing at present.
 To align the required energy within the required work objectives.
 The objective to increase team coordination, communication, and team-work capability.

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 In order to bring out the clarity and purpose of the employees.
 In order to empower each of the concerning team members in order to shape the future of the
organizations (Rzheuskiy et al., 2017).
 It paves the way for gaining competitive advantage in regard to other rival firms.
SWOT analysis of the organization:
STRENGTH - Presence of positive brand equity.
- A major proportion of market share
stays in favor of the brand.
- Presence of Goodwill and availability
of loyal consumers.
- Making use of superior logistics and
distribution systems, the company has
been able to arrive at a consumer
satisfaction point.
WEAKNESS - Its diversified product offering has
failed to acquire an equal level of
consumer market share.
- Its free shipping advantage may
hamper the business objective by
resulting decline in the share of
revenue margin (Pandit et al., 2014).
- There is huge competition in the
market such that two or three