Innovation Strategy for Amazon: A Design Thinking Approach

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MGMT20132: Innovation and Sustainable Business Development
Assessment 1: Individual report: innovation strategy
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Executive summary
In this report, the impact of design thinking on the organisation will be discussed. The discussion
will be in the context of the company ‘Amazon'. This report will help to identify that design
thinking encourages the company to invest in many consumable products or services. It provides
support to the organisation to make excellent and innovative strategies for the future. It will be
helpful to understand that design thinking encourages the company to active run the approach in
the organisation such as digital grocery stores, Amazon fire stick, Amazon prime and fulfilment
stores and many other new products to expand company business in other states.
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Table of Contents
Executive summary.........................................................................................................................2
Introduction......................................................................................................................................4
Impact of the advances of design thinking movement on Amazon.................................................5
Company Overview.........................................................................................................................6
Business Trend Overview................................................................................................................6
Important Concepts and their relationships.....................................................................................7
Organisational environment.........................................................................................................7
Innovation Trend..........................................................................................................................7
Innovation strategy.......................................................................................................................7
Innovation Capabilities................................................................................................................7
Innovation value creation & capture............................................................................................7
Significance of Strategic Alignment for Innovation Strategy.........................................................8
Business canvas model...............................................................................................................10
Recommendations for Innovation Trend.......................................................................................11
Recommendation for strategic alignment to address the innovation trend....................................12
Conclusion.....................................................................................................................................13
References......................................................................................................................................14
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Introduction
This report explains the new movement of ‘Design thinking' and its impact on the e-commerce
organisation ‘Amazon'. Design thinking includes the best innovative solutions for the issues
which the company is struggling with. It contains an innovative solution approach. Amazon is
one of the largest e-commerce companies in the world. This report will help to identify the
impact of the new trending movement of design thinking on the company. Design thinking
encourages the company to invest in more consumable products or services.
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Impact of the advances of design thinking movement on Amazon
Design thinking movement is a strategic design methodology which helps to understand users,
challenges, assumptions, different problems and their solutions. It provides different solution
based methodological approach for the running issues from last time with some innovative ideas
which will be helpful to the society and for the organisation to not only solve the current
problems but also for making more profitability from the markets. It is considered as one of the
principal duties of the companies to find innovative solutions for the people who are associated
with the company (Liedtka, 2018).
Amazon needs no introduction nowadays; Amazon.com Inc. is an American multinational
technology company which has prime focuses on e-commerce markets, cloud computing and
artificial intelligence. It has its headquarters Seattle, Washington. Amazon is the largest e-
commerce company when it measures by revenue and market capitalisation. It is operating its
business in each possible countries of the world. Company is renowned for its loyal customer
bank, fast and innovative services to its customers.
Amazon is one of the most rising tops of fast, innovative companies in the world. They are trying
each day to making their customers live and providing the best products. Amazon offers many
different solutions such as Amazon Prime, Amazon Fire TV stick, Amazon stores, electronic
gadgets, Amazon digital grocery stores, fulfilment centres and recently company invested in 40
cargo planes to make the delivery faster which will be helpful to reduce the cost as well. Design
thinking movement helps the company to understand customers’ needs in every sector which
leads the company to launch its services or products to those sectors (Liedtka, 2018).
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Company Overview
Amazon
Amazon is one of the largest growing e-commerce companies in the world. Earlier it was only
into the business of e-commerce, but now company expands into many consumers based
activities. It is one of the most revenue making e-commerce organisation in the world. The
company is committed to providing best, fast and innovative services to its customers. The
company believes that staying customers more loyal to the company, it would be more
comfortable if the company can offer them better offers and services than others. Prime video is
now operating in more than 200 countries. Company is expanding its business into many
different sectors of consumable goods and services and giving fierce competition to the
companies which have been already into business in those sectors for years now. The most
important thing for the company it's loyal customer banks which helps them to become the most
revenue making company in its field.
Business Trend Overview
Design Thinking
Design thinking is a planned, strategic process of finding a solution for those problems which are
running in the organisation for the quite long. Design thinking helps to find the most innovative
solution for the issues/problems. It often will be beneficial to society as well. Design thinking
has its three components which should be must deliver which are the following:
Superior Solutions – Finding the most innovative and excellent solutions are the essential
demand for this concept.
Lower risks & cost of changes – It includes that the solution lowers the chances and reduces the
costs too which would be helpful for the company to run that designer thinking idea for a more
extended period.
Employee buy-in – The most crucial factor for design thinking is that the company's employees
would be involved in this process of innovative thinking. It helps to generate more real and
practical ideas (Liedtka & Ogilvie, 2011).
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Important Concepts and their relationships
Organisational environment
Amazon.com Inc. has a very innovative and peculiar background in the organisation. They
promote their employees to be more smart and passionate about their work so that they can build
new products and services. Company is continuously working on making their creative culture
more sustainability which will be helpful to create a better working environment (Liedtka &
Ogilvie, 2011).
Innovation Trend
Company has adopted every new innovative trend in the market. The company invested in many
innovative businesses which are related to consumable products and services to become the
world's one of the largest e-commerce brand. Company has a large customer base all over the
world that is the company's loyal customer bank (Denning & Peter, 2013).
Innovation strategy
Company's primary focus is on making their customers’ life easier with the facilities the
company is offering to them and earning profits at the same time. Company’s customer is the
strength of the company. Their strategies often related to their customers. Company's innovative
culture at the organisation will help the company to develop more creative strategies for the
organisation (Liedtka & Ogilvie, 2011).
Innovation Capabilities
More than 45,000 employees work in the headquarters of the company in Seattle. Its employees
and brand name are one of the most critical resources of the company. It helps the company to
make different, innovative strategies and helps them to effectively adopt them in the organisation
(Denning & Peter, 2013).
Innovation value creation & capture
Company is one of the largest e-commerce and best innovative strategy Planner Company in the
world.
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Significance of Strategic Alignment for Innovation Strategy
A strategic alliance is a crucial thing for any organisation which helps the company to link the
structure and resources of the company with its strategy and business environment. Strategic
alignment helps the company to boost its performances. It includes the contributions of the
people, the company's objectives with minimising waste of the effort and resources to the
organisation's purpose. It consists of the strategies which are aligned to the customers,
marketplace and users. Amazon is a big brand; it operates its business in all the possible
countries which make to maintain the alignment more complicated for the organisation.
Company's internal and external environment helps to encourage the company's all level
employees to become more innovative and passionate towards the work. The company always
encourages employees to perform better and innovate new ideas. Company has more than 45,000
employees working in its headquarters right now, and the company operates in more than 90
countries. Company has been following very new, innovative strategies since the company
started its business in e-commerce and currently company is offering electronic gadgets, digital
grocery stores, Amazon fire stick, Amazon prime and fulfilment stores to its customers. For
making the delivery system faster, the company recently invested into 40 aeroplanes as its cargo
planes services which will reduce its dependability on the company's delivery partners such as
FedEx and others. Organisation alignment is critical to the organisation especially to the big
organisation such as Amazon, which is the following:
 It helps to focus on the right things at the right time.
 It helps to reduce the waste of resources.
 It helps employees to understand the vision of the company which will be helpful to
develop their productivity.
 It helps to organise the operational tasks of the company.
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Impact of design thinking on Amazon and SWOT analysis of the company
Design thinking helps the high-level organisation to find an innovative solution to their issues or
problems. This method has very innovative approaches to the problems. It helps them to
minimise waste while facing issues. Company has a very creative approach in the organisation.
Design thinking helps them to understand the precise objectives of the company to its
employees. It helps them to make essential, new, innovative strategies for the company and
design thinking helps them to make effective planning and its implementation of those strategies
(Razzouk et al., 2013). The company invested in many consumable products or services for
making the more independent. It helps them to stretch its limits and explore the new and exciting
world of opportunities. The following SWOT analysis will help to understand the strength,
weakness, opportunities and threats:
Strength – Company has a big brand name in the market and has a large loyal bank of
customers; this could be considered as the biggest strength of the company. Company's large;
employees are one of the most prime powers of the company. Company's strategy is ‘go global
and act local' which helps the company to perform better in every country.
Weakness – The margins of the products are getting shrink because of the cost of the delivery
network. The company had some negative publicity for tax avoidance issues in some countries.
Debt is getting high in some countries higher than profitability. Fire phone was a complete flop
for the company.
Opportunities – Global expansion is the most significant opportunities for the company which
is expanding its business into Asian and another side of the world. Company is opening its
physical stores outside the U.S. under its design strategy. Company has much range of different
type of products which will be helpful to achieve competitive advantages.
Threats – Competition is getting fierce competition from local e-commerce websites in every
country. Each country has its own rules and regulations which creates complication for the
company to follow every time.
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Business canvas model
Key partners
Payment partners
Marketing firms
Investors
Vendors
sellers
Key Activities
Streaming of
online digital
content
shipping
Value
propositions
Low price for
combined
services to the
users.
Free trial of the
products.
Unlimited
quantity to
enjoy.
Customers
relationships
Self-service
Advertising
from websites
and on different
digital
platforms.
Customer
segments
Customer self-
service access
from the
company
websites and
apps.
Key resources
Online content
Shippers
Physical
content servers
Websites/Apps
Channels
Online mobile
devices and
desktops.
Cost structure
Servers running and maintenance
Revenue streams
Annual subscription fee
Revenue from different suppliers/sellers
(Ostewalder & Pigneur, 2010).
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Recommendations for Innovation Trend
How should the organisation organise its innovation activities?
The technology has been changing in today's world very rapidly. Amazon is a large scale e-
commerce company which is Seattle based. The company operates in every country, and around
45,000 employees have been working in the organisation's headquarters. Managing its workforce
and engaging them to become more productive is the prime targets for the company for its
innovative activities where all associated people can feel connected (Eines et al. 2018).
What additional innovation capabilities should the organisation develop?
Company has been operating its business in many countries which have different culture and
different rules & regulations which could be problematic to understand and follow, but the
company should add some innovation to make every country's people more connected with the
values of the company.
What innovation initiatives should they pursue?
The company should try to run some innovative training programs for the employees so that they
can be an asset for the company soon and work with more effective productivity. Some learn and
fun activities will be helpful to maintain the proper working culture at the organisation. It will
help to create strong bonding between employees (Gobble & Mary, 2014).
How should the organisation ensure that it creates and captures value from the innovation?
This innovation strategy and design thinking movement will surely be helpful to create and
captures value from the innovation which the company is following in the organisation. The
company invested in many new businesses in the past few years. Few products are not that
successful but other than that most products are tremendous successful which indicates that
innovation created value (Eines et al. 2018).
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