Innovation Strategies of Amazon: A Detailed Report

This report provides a detailed analysis of Amazon's innovation initiatives, focusing on its e-commerce strategies and social media marketing efforts. It begins with an executive summary and an introduction to Amazon's position as a leading multinational technology company. The report then delves into the concept of innovation strategy, examining Amazon's approach to design thinking and its impact on the e-commerce industry. The discussion includes an analysis of recent innovation trends, particularly the use of social media marketing to reach a wider customer base. A business model canvas is used to classify the impact of these trends, considering infrastructural, offering, customer segment, and financial aspects. The report provides recommendations for Amazon to enhance its social media marketing strategies, including improving platforms like Amazon Spark. It also addresses the interconnectivity of innovation trends with the organization and strategic alignment to ensure the success of these initiatives, highlighting the role of leadership and cultural alignment in fostering new ideas. The report concludes with a summary of the key findings and recommendations for Amazon's continued innovation and growth in the competitive e-commerce market.

Running head: INNOVATION INITIATIVES: AMAZON
INNOVATION INITIATIVES: AMAZON
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Executive Summary
The respective paper is an innovation strategy report of the most popular online shopping and e-
commerce brand “Amazon”. To find out the innovation strategies of Amazon and laying down
the report, thorough research is conducted. The aim of this paper is to deliver various innovation
initiatives taken up by Amazon regarding the services they offer, the infrastructural development
they seek for as well as their internal as well as external organizational management. Amazon
has been trending in the e-commerce and online marketing industry as one of the leading
businesses across the globe.

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TOC
Table of Contents
Executive Summary.....................................................................................................................................1
Introduction.................................................................................................................................................3
Discussion...................................................................................................................................................3
Recent Innovation Trends........................................................................................................................4
Impact of the Trend.................................................................................................................................5
Business Model Canvas classifying the Impact.......................................................................................5
Innovation Strategy Recommendations...................................................................................................7
Interconnectivity of the innovation trend with the organization..................................................................8
Strategic Alignment to best ensure Innovation Trend..............................................................................8
Conclusion...................................................................................................................................................9

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Introduction
Amazon is an America based largest multinational technical company famous for its e-
commerce, cloud computing platforms as well as artificial intelligence, its headquarters being
based at Seattle, Washington (O’Connor, 2013). Amazon is considered to be the largest and the
most popular platform of online marketing and cloud computation all around the world,
according to the research statistics (Hardy, 2012). Founded by Jeff Bezos in 1994, Amazon has
gained its place in the global market by applying creative, effective as well as innovative
strategies to develop and enhance itself in order to survive and thrive in the fiercely competitive
global market. The respective paper is an innovation strategy report of the company Amazon
which identifies, comprehends, analyzes and interprets various innovation initiatives, schemes
and strategies which the company has taken up and also about to take up in order to maximize its
profit and meet customer requirements and satisfaction with an optimization of time and
resources.
Discussion
Innovation strategy of an organization can be widely defined as a progressive,
incremental, functional and prearranged plan which decides the identification, segregation and
allocation of various resources of the organization for engineering different types of innovative
plans aimed to achieve the corporate as well as the business objectives of the respected
organization (Jones, 2013). Under the strategic innovation schemes, an organization revisits,
reinvents and redesigns its corporate strategies to accelerate the growth of the enterprise.
Innovation strategy of an organization also helps the organization build its competitive advantage

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in the market and industry. Strategic innovation can not only be implemented in the
technological as well as marketing arena, but also in executive levels as well. Certain primary
and customary innovation strategies can be: what kind of business plans to be made and updated,
what are the strategies that can increase customer base as well as how to position the particular
products or services in the market (Rothaermel, 2015). Certain important innovation strategies
that are taken up by Amazon company are provided hereafter.
Recent Innovation Trends
The e-commerce industry is highly competitive and an ever evolving industry with new
emerging concepts that dominates the whole world. With the help of authentic, progressive,
active, updated and developed information and communication technologies, the e-commerce
and e-marketing brands are trying to enter into the domain of social media to come in front of
new prospective customers and capture attention (Constantinides, 2014). Social media marketing
is no longer a luxury or a privilege for the companies any more. It has now become a necessity as
the whole world has become technologically updated and enthusiastic. The population across the
globe has become social media buffs and the prospective as well as the functional customers of
online shopping companies expect the companies to reach them through social media platforms
according to the ways of communication (Tiago & Veríssimo, 2014). As the competition has
increased reasonably, the survival and thriving of the e-commerce industry and the companies
working under the industry has become difficult. The e-commerce industry is using different
innovative as well as creative activities to dive into the psycho-social behavior of the customers
and optimizing their needs and preferences and exhibiting them in the new and ever evolving
social media platforms (Clark & Melancon, 2013). Amazon, being a leading e-commerce
company, is expanding its wings in social media platforms such as Twitter, Facebook and

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Pinterest to reach to the maximum amount of customers to increase their sales, leads and explode
their social media pages in growth and development. The innovation trend which Amazon has
taken up as its innovation initiative is Design thinking. Design thinking innovation is a process
by which the designers solve complex problems and it is solely intended to find desirable
solution for the clients. In the case of Amazon, social media marketing, which is a part of digital
marketing, optimizes the needs and preferences of the potential customers, thereby, providing the
company with desired solutions for their sales and marketing. As the social media platforms have
achieved massive popularity across globe, Amazon has been making repeated and different
attempts to utilize the goodwill and mechanism of social media to increase its name and fame
among the demography irrespective of geographical, national or ethnic barriers (De Jong,
Marston & Roth, 2015).
Impact of the Trend
Impact of social media marketing trend on Amazon can be classified, categorized and
elaborated hereafter.
Business Model Canvas classifying the Impact
According to the business model canvas of Osterwalder and Pigneur (2010) the impact
of social media marketing trend on Amazon can be classified into Infrastructure, Offering,
Customers and Finances (Osterwalder et al., 2011). The four classifications of the impacts are
discussed hereafter.
1. Infrastructural impact: As the social media marketing of Amazon hit massive success all
around the world, the revenue of Amazon increased unprecedentedly. According to the
financial report, in the year 2018, the revenue of Amazon was reported to be $52.9

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million with a record of $2.3 billion as profit. With an increasing trend of social media
marketing, Amazon had no other option other than applying the best technologies,
including artificial intelligence and other highly developed information and
communication technological resources to optimize the customers in social media
platforms, thereby, enhancing their own technologies to survive and thrive.
2. Offering: The value proposition of Amazon in terms of social media marketing is its
innovative and effective written, visual as well as audio-visual premium contents which
has created a separate competitive advantage for the company among its peers and
competitors. With the help of such competitive advantages in its contents, it has been able
to build up a strong base in the world of social media advertising. Such outcome has
indirectly helped the company build and grow its contents everyday in every direction
which can also influence customers even in future.
3. Customer Segment: The greatest opportunity that Amazon can get through the help of
social media marketing is a plethora of interested, prospective and functional customers.
With the help of effective digital marketing strategies and social-media competitive
strategies, Amazon has successfully got hold of interest of myriads of people all over the
world who are intrigued by the advertisements of Amazon and are looking forward to
interact and transact with Amazon for purchasing products and utilizing its services.
4. Finance: As the social media marketing of Amazon hit massive success all around the
world, the revenue of Amazon increased unprecedentedly. According to the financial
report, in the year 2018, the revenue of Amazon was reported to be $52.9 million with a
record of $2.3 billion as profit. Apart from the mentioned figures, there has been an
increase in 130% quarter-to-quarter revenue from the advertising and marketing segment

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of Amazon in social media portals and platforms successfully throughout the functional
years. It has been estimated by the Economists that Amazon would be successfully taking
over the online advertising and marketing business in the next 4 to 5 years (Joyce &
Paquin, 2016).
Innovation Strategy Recommendations
Amazon has successfully drive traffic towards themselves with the help of innovative
techniques of social media advertising. As Amazon has become the biggest online e-commerce
platform, complexities have arisen regarding maintaining and enhancing the buyers and buying
experience for accelerating its business growth. The ordinary Search Engine Optimization
techniques have been replaced by innovative and fierce social media advertisement by the
company. Amazon has used the most remarkable and latest social media marketing software to
accelerate its business growth. However, there are certain areas in social media marketing which
is not well understood or comprehended by Amazon till now. The Amazon Spark, which is an
application launched by Amazon to promote product hunting and discovery and social sharing of
the intended products or services throughout the Amazon ecosystem was launched in the year
2017. Amazon Spark has been famous for its optimized, user-oriented and premium content
which has been appreciated across globe. However, there have been certain linguistic and
cultural barriers in the path of Amazon Sparks. Apart from that, the contents of Sparks had been
degraded with time, therefore, Spark was a failure (O’Connor, 2013).
One innovation strategy in the field of social media marketing that Amazon can take up is
by providing a better version of Sparks, an e-commerce platform synchronized and amalgamated
properly with social media portals and platforms. Amazon has to focus on long term
sustainability schemes and strategies. The company should identify the social media trends and

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fashion as well as the consumer behavior with the help of segmentation strategies to find out and
plan what to propagate, how to propagate, when to propagate and whom to propagate.
Communication is the core dimension of a social media network platform or a portal. It is
through various communication strategies and plans that a company can endorse its products and
services successfully among the social media users and buffs. The social media marketing
experts who are hired by Amazon should make an attempt to provide the social-media users with
highly optimized, user-oriented, user-segregated, innovative and premium contents (both written
and audio-visual) so that the customers as well as the prospective customers remain attracted
towards Amazon and the brands it offers.
Interconnectivity of the innovation trend with the organization
The organizational environment of Amazon is apt for the social media marketing trend as
Amazon has a history of appointing best and the most skilled candidates in its organization.
Amazon has the most innovative team of digital and social media marketing with experts and
professionals who work relentlessly in the field. The innovation strategy which Amazon has been
suggested to take, which is providing a better version of Sparks, an e-commerce platform
synchronized and amalgamated properly with social media portals and platforms is assumed to
be well implemented by the innovative technological team of the company. The respective
innovation strategy would not only bring clarity and optimization of marketing ways of Amazon,
but would increase the credibility as well as market share of the company respectively.

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Strategic Alignment to best ensure Innovation Trend
Strategic Alignment is a process or a methodology by which an organization’s structure
and resources get linked with the strategies and business environment. The Strategic Alignment
for meeting the social media marketing trend by Amazon can be traced by looking at the
activities of its CEO and other senior leaders and stakeholders. The senior leaders, stakeholders
and the CEO of Amazon are largely engaged with the innovation schemes of Amazon. The
officials and experts of Amazon can consider new ideas and creativity to be its assets that can
also act like resources for them for further improvement of their organization an acceleration of
growth. The CEO of Amazon, Bezos believes that the main reason behind the accelerated growth
of any organization is a continuous overflow of new ideas and creativity within as well as outside
the organization. The officials of Amazon should continuously practice cultural alignment to
respect and evaluate the ideas from different professionals from different cultural, national and
ethical background (Alagaraja, 2013). Another significant strategic alignment that can be taken
up by Amazon to fuel its business growth is that Amazon considers in experimenting with
various ideas and techniques and believes in trial-and-error method of rectifying itself. It is
evident that risk is equal to returns. The pragmatic and experimental nature of Amazon can help
it to build such a colossal empire in the world of e-commerce across the globe. Instead of
theoretical and discursive approach towards building up its strategies, Amazon can approach
practical ways to deal with its peers and competitors in the market and industry. The experts who
work for Amazon can be in a continuous pursuit of gaining new skills and tools to improve their
performance within the organization which is assumed to be helpful for the organization in terms
of growth and development.

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Conclusion
The respective paper is an innovation strategy report of the most popular online shopping
and e-commerce brand “Amazon”. To find out the innovation strategies of Amazon and laying
down the report, thorough research is conducted. The aim of this paper is to deliver various
innovation initiatives taken up by Amazon regarding the services they offer, the infrastructural
development they seek for as well as their internal as well as external organizational
management. Amazon has been trending in the e-commerce and online marketing industry as
one of the leading businesses across the globe. In order to build the innovation strategy report,
the impact of the innovation trends (social media marketing trend) has been evaluated with the
help of the business model canvas theory by Osterwalder that has been taken into account which
consists of various segments such as infrastructural segment, offering, customer segment as well
as financial segment. At the end of the report, recommendation has been provided to the
company for taking up innovation strategies for the mentioned trend and also the various
strategic alignment that can be taken up by the company to form the strategies required to meet
the trend and objectives of the company.

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