Business Strategy and Consumer Behavior Analysis: Amazon's Approach

This report provides a comprehensive analysis of Amazon's business strategy and consumer behavior. It differentiates between Amazon's corporate and business strategies, highlighting its focus on e-commerce, cloud computing, and digital streaming. The report examines Amazon's resources and capabilities using the VRIO framework, explores its diversification strategies for increasing returns, and determines whether Amazon adopts a cost leadership or differentiation strategy. Furthermore, it delves into Amazon's organizational structure, emphasizing its control over the supply chain and global commerce operations. The report also assesses how Amazon satisfies crucial website attributes influencing customer decision-making, the influence of the social environment on consumer choices, and Amazon's approach to social and ethical issues. It identifies issues faced during strategy implementation and outlines the benefits of Amazon's acquisition of Souq, concluding with a summary of the key findings and recommendations for future strategic directions.

BUSINESS STRATEGY &
CONSUMER
BEHAVIOUR

Table of Contents
INTRODUCTION................................................................................................................................3
1) Differentiate between corporate and business strategy of Amazon's......................................3
2) Amazons capabilities and resources.......................................................................................3
3) Diversification strategies employed by organization to increase returns...............................5
4) Amazon adopt cost leadership or differentiate strategy..........................................................5
5) Organizational structure of Amazon.com Inch control supply chain and global commerce
operations....................................................................................................................................5
6) Amazon satisfy 10 crucial websites attributes that influence customer decision making......6
7) Influence of social environment on customer choices............................................................7
8) Amazons addressal of social and ethical issues......................................................................8
9) Issues faced by company during strategy implementation.....................................................8
10) Five benefits of Amazon acquiring Souq..............................................................................8
CONCLUSION....................................................................................................................................9
REFERENCES...................................................................................................................................10

INTRODUCTION
Amazon is an American multinational technology organization, they focuses on cloud
computing, e-commerce and digital streaming. Company is known for their distribution of well
build industries through mass scale and technological innovation (Dalton, 2017). This report is
based on Amazon firm, founded in 1994 and founded by Jeff Bezon. It explains organization
business and corporate strategy, resources and capabilities, diversification strategy adopt by firm to
increase returns. This study justifies cost leadership or differentiate strategy adopt by Amazon,
contribution of Amazon.com Inc's organizational structure to control global commerce operations
and supply chain. Furthermore, it describe issues faced by firm during strategy implementation,
five benefits of acquiring Souq, ethical and social issues addresses by firm and influence of social
environment on people selection of online purchases in UAE.
1) Differentiate between corporate and business strategy of Amazon's
Amazon is known as world's biggest online retailer and operate their largest online
shopping website across the world effectively. Corporate strategy is consist of overall scope and
objectives of business in order to fulfil expectations of stakeholders. Organization corporate
strategy is describe as concentric diversification, which is quite different from their business
strategy. It is based on leveraging technological abilities for overall success of business and
following the cost leadership strategy that aim is to offer the maximal value to consumers at lower
price.
Business strategy is taken up with strategic decision focusing choice of goods, customer
satisfaction and competitive advantages. Amazon business strategy is different from corporation
strategy, they plan to become a trillion dollar organization. They wants to invest in technologies to
cater better services to customers.
2) Amazons capabilities and resources
VRIO analysis is one of the best analytical technique used for evaluation of organization
competitive advantage and resources. Through this analysis company know their resources and
better understand its abilities or capabilities (Arts and Economics, 2017). This model is based on
four dimension value, rareness, lmitability and company. Amazon competencies is based on
business resources and organizational capabilities that satisfy all criteria of VRIO. Through VRIO
table it is easy to outline and understand Amazon resource and capabilities.
Capabilities and
resources of
Valuable Rare Imitate Organization

Amazon
Growing mortar
and brick presence
Able to grow
portfolio of
private label
goods
Growing diversity
in context of
online services
Extensive delivery
network including
regional,
international and
domestic
partnerships
Amazon have
distribution hubs
and strategic
warehouses
Amazon have high
global brand
equity
Artificial
intelligence
capabilities
Global network of
affiliates that grow
or expand
international
market reach

Amazon's core competencies include organization's growing mortar and brick presence, this
ability is valuable and help to gain competitive advantages, on the other hand it is not rare and
imitable.
3) Diversification strategies employed by organization to increase returns
Diversification is the corporate strategy in which organization brings multiple businesses
within their boundaries. Diversification strategies is used to increase profit, expand operations of
company by adding products, markets, stages of production and services to existing business.
Amazon employed product diversification strategy that help to maximum return, according to this
strategy they expand into new products categories (Waldo,WE 2017). It is the best practices of
expanding original market for goods, this strategy is used to maximize sales connected with the
existent product line. It is very essential for overall business growth and reflect how well the firm
utilizes their assets and achieve high sales volume from new goods. With new venders they expand
into new categories of goods in which they diversified products, with the help of keyword.io,
google keyword planner and sonar-tool.com organization find out what people actually wants and
looking for. Amazon's expand into new segment of the industry in which they already operate
effectively. They applies product development for business growth and offering new goods to gain
high revenue.
4) Amazon adopt cost leadership or differentiate strategy
Yes, amazon adopt cost leadership as generic strategy in order to gain competitive
advantages. For example, organization use networking and advanced computing technologies that
help to maximize operational efficiency which translated to increased costs. Via adopting cost
leadership strategy company provide better and valuable services to consumers, they become largest
online retailer and it help them to consistently been a successful leader in market segments in which
they operate business. Cost leadership strategy is used by Amazon to achieve competitive benefits
by creating the low cost position among their business competitors. In simple words, it is the ability
of business to maintain lower prices than rivals by increasing efficiency and productivity,
controlling costs and eliminating waste. For example, organization is focusing on cost reduction at
expense of goods differentiation which means that company products is available on other portals.
In order to gain competitive benefits, firm adopt this strategy which also help to increase customers
bases and retain people with them for longer time.

5) Organizational structure of Amazon.com Inch control supply chain and global commerce
operations
Amazon.com organizational structure is classified as functional, they have functional
organizational structure centring on business activity and functions based for determining
interaction among elements of company. This structure is enables extensive control on global e-
commerce operations, it established system and design of interactions among members of business,
for example, firm corporate structure determines how leaders and manager influence and direct
operational activities in different business areas. As the leading online retailer, Amazon.com
maintain organizational structure that consistently help their expanding market reach. Senior
management team include CEO's, one worldwide controller and three senior vice president, who is
accountable for several important aspect of business like controlling supply gain and international
business operations. Functional organizational structure cater Amazon.com the best opportunity to
launches their new product in e-commerce market effectively. All the functions of business
dedicated team or group along with senior manager.
6) Amazon satisfy 10 crucial websites attributes that influence customer decision making
Customers only spend the few seconds on websites before deciding whether to move on, so
it is essential to follow and know the best practices for website design and also important to know
what consumer consider as desirable attitudes in terms of functionality, interactivity and content.
10 important attributes of websites-
Personalisation-
This website attribute enables greater marked of information, enhances customer experience
and increase relevance (Website attributes, 2018). When the websites treats each individual and
recognises visitors when they delivers and revisit information based on people preferences
personalisation is done technically through user login.
Interactivity-
Higher level of interactivity, will higher websites attractiveness, it empowers people with
ability to identifies what, when, how and whey they consume content. It also empower ability to
create its own content.
Informativeness-
it refers to degree of usefulness that details provided is perceived by people, is it what they
are looking for. Increasing relevance and usefulness of site content, customer set their mind and it
influence on its behaviour for using websites.

Navigation-
Websites does not make complex content which lower attitude of users towards sites,
navigation refers to how easily people find what they looking for.
Security and privacy-
Websites cater privacy and security statements of data collection by user, they need to secure
payment gateways and full disclosure statements for return policy, liabilities and warranty.
Entertainment-
Websites effectiveness is based on how well it engages attention of customers by being
exciting, fun, entertaining or enjoyable. It influence customer to continuously return to particular
site and spend long time on site for exploring information.
Accessibility-
It is ease by which consumer reach websites, poor download speed is one of the factor that
influence customer behaviour. For example, Amazon.com provide greater downloading speed to
their customers that help to gather information according to preferences.
Number
Websites must shows number of available services in run time that also satisfy people and
help to take better decision. For example, Amazon provide number for all products in which people
select goods according to their needs,
Price
Websites provide option for selecting currency, is it one of the another attributes that
influence consumer decision making procedure. People easily find out the accurate price of goods
with the help of available option.
Date
Date of manufacturing goods and information places by others must be available in
websites.
Amazon is satisfied from all above attributes and they also follow effectively within
business that help to garb the attention of clients.
7) Influence of social environment on customer choices
Social environment influence on people choice for online purchases of products in UAE, in

recent era people like to purchase goods through online websites because it save their time.
Increasing trend of online purchasing is considered as one the social factor that impact on consumer
choice for online shopping in nation. Due to shortage of attractive offers and shortage of time,
people prefer to online purchases which is beneficial for them.
8) Amazons addressal of social and ethical issues
Warehouse abuses, exploitation of temporary employees and tax avoidance is considered as
ethical issues addressal by Amazon. Taxes is essential, it redistribute money in such terms that all
people can receive services that they need, avoiding taxes is one of the ethical issue that impact on
overall business and performance
9) Issues faced by company during strategy implementation
Due to lack of communication, resource allocation, lack of flexibility and poor planning
create issues faced by Amazon during strategy implementation. Without effective communication
workers in organization does not understand the importance of strategy and its effectiveness, if they
do not communicate with each other it is impossible to work in team.
10) Five benefits of Amazon acquiring Souq.
Amazon acquire Souq, it is the biggest e-commerce organization in Arab world, recently e-
commerce market is disconnected, Souq is the largest player by acquiring them Amazon got 50%
market share in market place (Qin, 2018). Firm acquire business that eligible as their closet
counterpart in region, low prices, leveraging the digital strategy and executing on convenience that
enables facilitates positive consumer services and infinite inventory.
 Through acquisition, organization get many benefits such as they offer its consumers widest
product selection, improve delivery times, cater great prices and first rate services to
customers.
 By acquiring, Souq Amazon increase their market share and firm has been able to
established strong position within marketplace effectively.
 One of the advantage of company acquire Souq, it that an organisation has been able to
increase customer base and provide range of services to them easily.
 It is beneficial for organization, acquisition provide access to them increase customer base
and provide range of services to them easily.
 It is beneficial for organization, this acquisition provide access to them to successful and
refined fulfilment operation.

 Company gain competitive benefits through acquiring Souq, they provide better services to
people rather than its competitors in market.
CONCLUSION
From above it has been concluded that, Amazon capabilities and resources is analysed
through VRIO model effectively. Company employed product diversification strategy to maximise
profit and increase productivity. They also adopt cost leadership strategy that help to gain
competitive advantages. Lack of planning and communication is one of the issue that impact on
company and faced by them during implementation of strategy. Furthermore, company adopt
functional organization structure which is beneficial for their business and maintain overall supply
chain.

REFERENCES
Book and Journals
Dalton, M., 2017. Men who manage: Fusions of feeling and theory in administration. Routledge.
Arts, F. and Economics, G., 2017. Business Administration. Social Policy & Administration. 40.
p.46.
Waldo, D., 2017. The administrative state: A study of the political theory of American public
administration. Routledge.
Draper, T., 2017. American business and public policy: The politics of foreign trade. Routledge.
Qin, C.Z., 2018, July. On the Role of Business Administration in Promoting Economic
Development. In 2018 International Seminar on Education Research and Social Science
(ISERSS 2018). Atlantis Press.
Gilliland, M., Tashman, L. and Sglavo, U., 2016. Business Forecasting: Practical Problems and
Solutions. John Wiley & Sons.
Online
Amazon VRIO Analysis – Competitive Advantages, Core Competencies. 2019. [Online]. Available
through:<https://www.rancord.org/amazon-vrio-analysis-competitive-advantages-core-
competencies>
Amazon's business strategy. 2019. [Online]. Available through:<https://www.greyb.com/amazon-
business-strategy/>
Amazon’s Corporate Strategy. 2018. [Online]. Available
through:<https://www.managementstudyguide.com/analysis-of-amazon-corporate-
strategy.htm>
Website attributes. 2018. [Online]. Available
through:<http://www.australianbusiness.com.au/marketing/resources/website-attributes>