Engineering Management Report: Amazon's Innovation Strategy

This report delves into the core concepts of engineering management, focusing on Amazon's strategic innovation and its impact on organizational development. It examines the company's organizational environment, innovation trends like Lean startup technology, and how these elements contribute to value creation and capture. The report explores Amazon's innovation strategy, including the introduction of 'Prime Now,' and its alignment with the company's objectives. It analyzes the impacts of these strategies on the company's overall success and emphasizes the importance of strategic alignment in achieving business goals. The analysis covers various aspects of Amazon's operations, highlighting the interconnectedness of innovation, strategic alignment, and organizational growth. The report also discusses the importance of adapting innovation strategies to current trends and the need for continuous improvement in organizational processes to enhance value creation and capture.

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ENGINEERING MANAGEMENT

Engineering Management
Table of Contents
Introduction......................................................................................................................................3
Background..................................................................................................................................3
Aim and Scope.............................................................................................................................3
Amazon (online shopping) Company..............................................................................................3
Background..................................................................................................................................3
Innovation trend...........................................................................................................................4
Concepts and Relationships.............................................................................................................4
Organizational Environment........................................................................................................4
Innovation Trend.........................................................................................................................4
Innovation Strategy......................................................................................................................4
Innovation Capabilities................................................................................................................5
Innovation Value Creation and Capture......................................................................................5
Innovation Strategy and Strategic Alignment..................................................................................5
Analysis of Impacts.........................................................................................................................5
Innovation Strategy and Innovation Trends....................................................................................6
Strategic Alignment.........................................................................................................................7
Conclusion.......................................................................................................................................7
References........................................................................................................................................8
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Engineering Management
Executive Summary
The various business concepts like business environment, strategic innovation and value-creation
have been taken up for discussion and analysis in this paper. The close links between these
business concepts are identified and assessed in order to achieve a target that is value creation
and capture. The paper takes up the Amazon online shopping Company to analyze the various
aspects of business management and discusses its aims and objectives in order to relate to its
strategic decisions. The concept of strategic alignment has been identified and discussed in order
to emphasize on its importance and relevance. The Lean start-up innovation technology has been
considered and examined in the light of current events of the Company. In conclusion, the paper
offers a thorough analysis of innovation trends and innovation strategies in order to create most
value in the business processes.
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Engineering Management
Introduction
Background
Understanding contemporary business environment requires thorough analysis of different
business concepts like business capabilities, business value creation and business innovation
strategy. The successes of the large-scale companies have largely depended on their abilities to
drive innovation with close relation to its organizational objectives (Nambisan, Lyytinen,
Majchrzak and Song 2017). This paper aims to emphasize on the close relationship shared by
innovation strategies and organizational development, with close respect to a current business
organization. With the fast changing external conditions of a business environment, the
importance of innovation and strategic alignment will be explored and analyzed in order to
assess the current circumstances of a chosen business organization.
Aim and Scope
The main objective of this paper is to emphasize on the various concepts like business innovation
strategy, business value creation and business capabilities and assess how they impact a
particular business environment (Lewandowski 2016). The close relationship shared by
organizational growth and innovation capabilities will be explored and explained through the
current business instances of a chose organization.
This paper takes up the Amazon (online shopping) Company as a major business organization
leaning towards strategic innovation and development (Snihur 2018). By analyzing the internal
and external conditions of the organization, this paper would aim to shed light on the strategic
alignment of the organizational values for an all-round development.
Amazon (online shopping) Company
Background
Amazon is an online shopping platform that allows online buy and sell of products and services.
It is a multinational technology company that acts through e-commerce, cloud computing and
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Artificial Intelligence. The Company has shown indications of strategic innovation and
development through application of new innovations and strategies that align their organizational
objectives (Schoemaker, Heaton and Teece 2018). Amazon is one of the largest e-commerce
market place and cloud computing platform in the world. It has a diverse collection of products
and services that they sell over various online platforms under Amazon. This paper would assess
the various operations of the Company in order to achieve strategic alignment.
Innovation trend
The chosen innovation trend for this paper is ‘Lean startup technology’, which is now
becoming a leading trend in the development and strategic alignment of organizational objectives
(Harms 2015). A Lean startup technology emphasizes on being innovative and conserving time
in business processes so as to reduce wastage of resources and materials. A lean perspective to
business organization focuses on identifying the particular investments (capital or time) that are
extra or do not bring any significant returns (Rasmussen and Tanev 2015). The identified
investments need to be slacked from the organization’s business processes in order to make best
utilization of the available resources.
Concepts and Relationships
Organizational Environment
Organizational environment can be referred to the internal or external conditions of the
organization that make up for the workplace ambience or culture (Hanaysha 2016). Various
elements influence the functioning of an organization, for example, culture, objectives and
availability of resources. The given framework within which an organization performs is known
as the organizational environment. The Amazon Company’s organizational environment
comprises of a specific culture that enables the capacity of the organization to respond to the
current needs and demands of the e-commerce market. The culture of Amazon is to push the
traditional limits of productivity and innovation and create something exclusive for the
organization’s growth and development (Crespi, Tacsir and Vargas 2016).
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Innovation Trend
The rising completion and rivalry in the business market has given rise to the importance and
relevance of innovations and organizational strategies. In order to survive the stiff competition of
the market, various Companies from world-wide have come together to contribute ideas and
practices that harness the available resources in best possible way and aligns the objectives of
organizations with their inherent strategies (Gao 2016). This paper takes up the Lean startup
technology as the most relevant innovation trend for the Amazon Company and aims to provide
a vivid understanding of the related concepts and relationships.
Innovation Strategy
In order to make best use of available resources and information, it is most important to build a
relevant strategy that would guide the organization to achieve its objectives (Pisano 2015). The
innovation strategy needs to be closely linked with the organization’s internal capabilities,
external opportunities and organizational objectives. As a major retailer in the online business
industry, the Amazon Company introduces its new innovation ‘Prime Now’, which enables the
users to receive their products within one hour of their buy. Amazon uses the customers’
obsessive personality traits and integrates it within the strategic innovation in order to make it
most attractive for the users and relevant for the organization.
Innovation Capabilities
As the name suggests, innovation capabilities refers to an organization’s means to bring about
innovative changes through the available technological tools and instruments (Nylén and
Holmström 2015). In order to utilize the available resources to their fullest extent, it is necessary
to identify the particular innovation opportunities that the organization replicate and utilize them
to bring about a technical change or improvement. As one of the world’s most innovative
Companies, Amazon focuses on applying new ideas and concepts in order to understand and
assess the consumer responses. The innovation of Prime Now made a significant mark in the
history of the Company as it expanded rapidly and got accepted by the majority of customers.
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Innovation Value Creation and Capture
The main objective of business organizations is to create more value through their operational
processes. It is not over with just value creation, but value must be captured so that it is reflected
in monetary returns. In order to succeed in value creation it is important that all members
contribute significantly in the innovation process and also depend on each other for capturing
value (Tantalo and Priem 2016). A value perspective is followed by the Amazon Company and
the chosen innovation of Prime Now has reflected back with significant amount of value. The
Company’s dominance over online retailing and other business operations improved
considerably as more value was added by reducing the investment of time for the consumers.
Innovation Strategy and Strategic Alignment
Innovation strategy refers to the organizational plan that focuses on expanding the business
markets, increasing profits share and enhancing the revenues. The main means of innovation
strategy is brought out by products and service innovation (Cui, Ye, Teo and Li 2015). An
innovation strategy focuses not only on product innovation but also informs the target audience,
identifies the plan-executer and locates the particular operational level that it belongs to.
Strategic alignment refers to the process of linking an organization’s objectives with its
innovation strategies. In order to apply lean thinking in business operations it is necessary to
reduce the extra fringe elements from the operational processes and reduce wastage of time and
resources. Strategic alignment in an organization is brought by identifying the original objectives
of an organization and accordingly devising the strategic innovations that highlight the initial
objectives. Being a multi-national organization devoted to online transaction of business, the
Amazon Company applied lean management tools to align its business objectives with their
innovation capabilities.
Analysis of Impacts
The creation of an innovation strategy is the first step towards strategic alignment. Innovation
has become one of the most necessary elements required for the survival and success of business
organizations. The innovation strategies need to be relevant to the organization’s initial aims and
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objectives, in order to bring alignment across the organizational levels. The business
organizations have realized the need to innovate, as the rapidly changing business conditions are
making it difficult for the survival of businesses (Haigh, Walker, Bacq and Kickul 2015).
Millions are being invested for experimenting strategies and assessing which one fits the best.
However, an ideal innovation strategy is the one that aligns the various operational objectives in
the organization and strives for a common goal.
The Amazon Company succeeded significantly in devising an innovation strategy that resolved
most of their issues. The Company’s objective was to create more value in their business
processes and also capture value through means of financial returns. With the launch of Prime
Now, the Company successfully applied the Lean startup technology and resolved the issues that
were reflected in customer satisfaction. The lean perspective focuses on reducing the extra
investment of available resources in order to extract complete value and utilize it for better
quality service-providing. With Prime Now, Amazon successfully delivers products to the
doorsteps of customers within one hour. The Company’s initial objectives to create value in
product manufacturing and service providing got achieved through the innovative strategy of
introducing Prime Now. The alignment brought together in the Company’s organizational levels
by the strategic alignment of objectives has had significant impact in the Company’s success.
Innovation Strategy and Innovation Trends
 The Amazon Company needs to organize its innovations activities in a particular way
that serves the original objectives of the organization. The innovation strategy devised by
the organization must meet the current requirements of the Company along with adding
more value to their production. The Prime Now innovation was a perfect application of
innovation strategies that meet the current requirements of the organization.
 The organization can further develop its strategies to include more activities that serve
their purpose. By applying lean perspectives to organizational thinking, the Company can
emphasize on reducing extra investments on production and promotion processes. In this
way the Company not only conserves time and energy but also helps in full utilization of
the available capabilities (Boon and Edler 2018).
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 The Amazon Company needs to pursue innovations in organizational processes that make
delivery of products quicker and easier. By improving their transportation facilities and
employing more drivers, the Company can work on improving their product delivery
time. Innovations in online presence can also improve their performance and capture
more value created in the process. The Company needs to assess the contemporary
innovation trends in order to use the one that is most suitable for the organization.
 One of the main objectives of business organizations is to create value and also capture it
in their operational processes. In order to create and capture value for the Amazon team it
is important for the organization to identify its main aims and objectives. In order to
ensure the creation and capture of value, the organization must keep aligning their
innovation strategies with the innovation trends and organizational objectives.
Strategic Alignment
Innovation trends have become extremely important in today’s business organization. In order to
survive the stiff competition of the market it is absolutely necessary for current enterprises to
apply innovation strategies that best suit to their requirements and needs. Since the Amazon
Company deals mostly with the delivery of products bought online and other e-commerce
services, it is necessary for the organization to apply an innovation strategy that best serves the
main objectives of the same. The chosen innovation strategy for the Amazon group is Lean
startup technology that emphasizes on the extraction of unnecessary or fringe elements from the
business processes; the ones that increase the expenditure on the Company without ensuring the
expected value (Sabherwal, Sabherwal, Havakhor and Steelman 2019). Conserving time in the
delivery processes is an important element that has provides opportunities for the organization to
improve their service delivery. Therefore, it can be considered extremely important to align the
innovation strategies with the main objectives of the organization in order to extract best results.
The strategic alignment of the Amazon Company with its Prime Now innovation serves as a
suitable example for the instance.
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Conclusion
To conclude, a thorough understanding of business concepts requires assessment of various
business concepts like business environment, strategic innovation, strategic value creation and
capture and more. The alignment of organizational levels with the organizational objectives is
extremely important for achieving success. This paper had taken up the scenario of the Amazon
Company to explore the various business instances and apply innovation strategies to analyze
what suits best. The original organizational objectives of the Company have been explored in
order to choose the best innovation strategy for it, which is the Lean startup technology. The lean
method exposes the various areas in organizational processes that call for investments towards
fringe or extra elements and disposes them from the process. The concepts, relationship and
interdependence of various business elements like organizational environment, innovation
trends, innovation strategy, innovation capabilities and value creation and capture have been
explored and demonstrated through the instances of Amazon Company. The concept of strategic
alignment and its importance for the success of an organization has been explained in the
research and further recommendations on how to best create value and also capture it has also
been discussed.
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References
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Crespi, G., Tacsir, E. and Vargas, F., 2016. Innovation dynamics and productivity: Evidence for
Latin America. In Firm Innovation and Productivity in Latin America and the
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Nylén, D. and Holmström, J., 2015. Digital innovation strategy: A framework for diagnosing and
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Pisano, G.P., 2015. You need an innovation strategy. Harvard Business Review, 93(6), pp.44-54.
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