Nelson College London: Business Strategy Report on Amazon's Strategy

This report offers a comprehensive analysis of Amazon's business strategy, examining its mission, vision, and objectives. It delves into the application of strategic planning techniques, including budget planning, benchmarking, and financial analysis. The report explores the impact of the macro environment using the PESTLE framework, analyzing political, economic, social, technological, legal, and environmental factors. Furthermore, it assesses Amazon's internal capabilities through SWOT analysis, identifying strengths, weaknesses, opportunities, and threats. The report also evaluates competitive forces using Porter's Five Forces model, providing a detailed understanding of the competitive landscape. The analysis incorporates various models and concepts to interpret and devise strategic planning within the organization, providing valuable insights into Amazon's strategic approach.

Business strategy

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
P1 Application of appropriate strategies to analyse impact & influence of macro environment
on business strategies and organisation.......................................................................................3
P2 Analysis of internal capabilities and environment using various frameworks within
organisational context.................................................................................................................7
P3 Evaluating various competitive forces in market sector through use of porters five forces
model...........................................................................................................................................9
P4 Applying range of theories, model & concepts for interpreting or devising strategic
planning within organisation.....................................................................................................10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Business strategies pay significant role in designing actual structure as well as
developing a healthy culture within business environment. Below report discusses about case
study of Amazon, a successful online platform that started as book store in 1994. Organisations
accomplish business objectives through creation of appropriate business strategies containing
clear guidelines or policies for successful operations at workplace. This report comprise of
various suitable frameworks or models to know internal & external factors affecting business.
Respective organisation deals with opening up of online websites, various physical stores as well
as Amazon prime subscription services entertaining large numbers across nation. Also, strategic
plan is created with use of porters five forces model analysis. Use of such theories & models is
mentioned in below report to determine various forces that leads to competition in market.
MAIN BODY
P1 Application of appropriate strategies to analyse impact & influence of macro environment on
business strategies and organisation
Company: Amazon
Mission: Major mission of Amazon as per case study analysis is “ focusing of various factors
such as price, selection & convenience to consumers through opening up physical stores & create
one of largest platform having online presence than others over internet”.
Vision: Main aim of Amazon is identified as “becoming one of most consumer centric
organisation on earth where every internet user can find out anything or everything they wish to
get that can be bought online with reasonable rates & prices.
Objective: Prime objective of Amazon towards establishing complete vision & mission of
organisation is following important core values introduced by Jeff Bezos. These consist of
obsession of consumers, resisting proxies (Munandar, 2017). Make high velocity decisions and
embrace external market trends.
Background of company:
Amazon is an American multinational technological company that provides various
services such as online shopping, e-commerce services, artificial intelligence, digital streaming
and cloud computing etc. This business that is based in Seattle, Washington, US spread across
world globally through its online presence of successful website.

Business Strategy
Business strategy in context with Amazon, is simply decentralisation of value creation
through use for appropriate models & theoretical analysis. Also managers at Amazon make sure
there is proper distribution of its goods & services through use of various inventory systems for
quick delivery services.. Following strategy therefore consist of creating user generated content
over famous social media platforms such as twitter, Instagram, Quora and Facebook etc. to reach
out to maximum consumers of all ages. Another way of value creation is forming peer to peer
networks with renowned manufactures, retailers, service providers & technology driven firms.
Role of Strategy:
Operations & functions within a business organisation are majorly held by using
appropriate strategies created by management officials or researchers of firm. Below are some of
significant role of a business strategy:
 Assistance in taking effective Decisions: Strategies itself are created based on various
strengths & weaknesses of company to make sure appropriate decisions are taken by
managers to grab any future opportunities for growth.
 Increases adaptability: Dynamic changes in business environment has created need for
having an online presence important for all companies. Since, consumers today are more
aware & try to search everything over digital media. Therefore, Amazon has adapted this
culture of being available to all consumers through internet innovation.
 Provides a Direction: A strategy is made based on previous or existing plans for future
improvements. Therefore, Amazon use such strategies to take first mover advantage over
others in competition as it provides a direction to both employer & employee on how to
function.
Strategic Planning Techniques:
Strategic planning is a continuous process that involves both choosing of best alternative
ideas to implement from various course of actions identified. In relation with Amazon, some of
appropriate techniques used in strategic planning process are mentioned below:
Budget Planning: Manager analyse certain financial factors that are costs, expenses,
revenues & overall profits to formulate strategies as per set budgets.

 Business planning & evaluation: Strategies adopted by managers are helpful to create
effective plans that are further evaluated in a continuous process to make sure there are
no mistakes or for elimination of unwanted errors.
 Benchmarking: Comparison of various organisational metrics or factors with other
competitive firms in industry (Davis, 2020).
 Financial & risk Analysis: There are various financial metrics such as ROI or payback
period etc. as well as risk metrics to know probability of any loses in future to be kept
under consideration before creating strategies.
 Competitive Intelligence: Market researchers at Amazon use various forms of data
collection & analysis to gather useful information related to market trends or consumer
preferences in perfect competition.
PESTLE Framework:
Amazon is a renowned organisation providing quick delivery and online shopping
services across world. It is important or managers to determine latest consumer & market trends
present in external environment of business to make appropriate changes as per demand of
people in market. Since chosen firm is operating in various sectors of market & also have huge
customer base. Pestle analysis comprise of various macro factors that are political, economic,
social, technological, legal and environmental categories described below:
Political factors:
Online presence over internet come with various forms of controversies that are faced by
Amazon being a global online platform. Growth of Amazon featuring various products over
online site created a huge impact on traditional businesses, physical stores etc. leading to various
political issues arising. Therefore, it became necessary for Amazon to follow rules, regulation as
well as policies by government authorities of every country they are showcasing their online
products or services. Chosen firm itself has huge political influence on its consumers that has
made it possible to operate in various countries across world with rising demand for its
reasonable products.
Economic Factors:
These factors majorly are affected by rising issues or changes in economy such as change
in inflation rates, interest rates, rise or fall in demand & supply etc.

Social factors:
Social acceptance is very important for every organisation to operate in society.
Therefore, Amazon majorly focuses upon rising its popularity amongst consumer market
through maintaining good quality of their services or products as well as provide consumers with
reasonable price products (De Sousa Jabbour, 2019). This broadly help enhance its brand
awareness or image amongst society. In relation with Amazon have taken up various initiatives
to influence society at large by generating employment opportunities of delivery boys at various
locations. Also, recruitment of logistic managers who can manage inventory stocks at
warehouses of products was done to make sure goods are available at all location to consumers at
every possible destination.
Technological factors:
Technology use by organisation in this modern digital era has frequently risen over a
period of time. Many businesses are trying to make use of technologies such as digital websites,
online platforms, social media etc. to promote their goods & services. In context with Amazon
also stared its online business with a book store that later on converted into a broad website with
A TO Z Services. This organisation had capacity to use financial & physical resources in
providing quality description of their products that made it easy for consumers to buy goods with
appropriate rating & quality.
Legal factors:
Legality issues comprise of various restrictions laid by government authorities of
different countries. In content with Amazon, make sure that all legal requirements are fulfilled
with following proper regulations set up by various government authorities. Some of major legal
factors that impact chosen firms business are increase in product regulations, rise in import or
export rules as well as various regulations regarding environmental protection.
Environmental factors:
In relation with Amazon, different initiatives are taken buy firm to maintain sustainability
of business in long run. Managers come up with various environment friendly programs that
educates public & employees about different green initiatives taken by top management. These
comprise of less plastic use, paper bags preferences, healthy products over shipping site of
Amazon (Umar, Sasongko and Aguzman, 2018). Following organisation also majorly focus on
reducing carbon footprints. There are various ecological ways through which managers can

manage different challenges that consist of various waste management techniques, control over
energy consumption etc.
P2 Analysis of internal capabilities and environment using various frameworks within
organisational context
Overall development of business come with identifying key internal capabilities and
environment of organisation. In order to have an advantageous position in market managers
have to take assistance of useful business strategies that can be applied to maintain survival of
firm in long run with a stable growth rate. Following market & industry analysis models are
applied by chosen firm to ensure growth & stability of business for a longer period.
SWOT Analysis:
This model is useful in determining mainly company's strengths, weaknesses,
opportunities and threats from other competitive organisations. In relevance with Amazon, use
this model to help managers take effective decisions for future as well as expand business in
various opportunistic sectors possible discussed below:
Strengths
 Focus on Customer satisfaction: Since traffic on websites is major factor of online
businesses, it has been kept into consideration by Amazon that it fulfils customer needs
or wants (Martí, 2017). Since chosen organisation has adequate finances & sufficient
resources, they are able to focus upon customer satisfaction level through use of
appropriate technologies or software.
 Brand image: With rise in Internet users across world , Amazon have been able to secure
a favourable position amongst online platforms in online business market. With such a
goo d reputation chosen firm is able to attract maximum number of consumers now with
rising demand for new products too.
 Changing of Pricing Strategy: With a lot of people buying from Amazon, it has become
easy for company to do bulk buying of goods as well as make various goods & services
available to buyers at cheap prices (Nugroho, 2021). Reasonable rate of products
therefore has become one of key strengths of Amazon that attracts maximum consumers.
Weaknesses:
 Controversies: There are lot of rivalry firms who create controversies about chosen
corporation that ultimately affect goodwill of firm. This may also sometimes lead

organisation to incur huge losses because of people changes preferences about their
products negatively.
 Internet dependency: Since Amazon is an American online platform, accessibility to
internet for every individual customers is important (Moskovich, 2018). This may cause
an issue of lack of connectivity for people belonging to small towns, villages or
underdeveloped cities that does not provide delivery services inn getting access top
Amazon products or services.
Opportunities:
 Urban & rural areas expansion: This can become a huge opportunity for Amazon to
focus on low area group people wiling to buy products from their online site future
leading to expansion of business & enhancement of profitability. With rising awareness
about online products amongst consumers, government authorities have started providing
facility of smartphones & internet connectivity in both rural & urban areas.
 Physical stores: Since Amazon has a huge customer base over online website & other
social media platforms. Therefore starting up with a physical presence too through
opening up of new stores can be a great opportunity for company. This may lead a whole
lot of customer visits due to brand equity of organisation at a global level.
Threats:
 Online rising businesses: There is free entry & exit of firms over online platform as it is
free for all users (Namazi, Dehghani Saad and Ghoohestani,2017). Therefore new
technological firm rising up with their online portals or websites can be a huge threat for
Amazon to face online competition over internet in large numbers.
 Changing customer preferences: Although Amazon provide a wide platform for its
users to do online shopping flexibly it may be possible that specific sites with unique
products come with more better quality products within reasonable prices to consumers.
Since customers are having enormous choices to switch on to another brand, they may
prefer buying substitute goods leading to losses for chosen firm.
VRIO analysis
This tool is useful for organisation to know their internal capabilities of business in terms
of value, rareness, organizing manner and imitability discussed in below points as follows:
Resources Valuable Rare Inimitable Organized

Brand Name ✔ ✔ ✔ ✔
Research &
development
✔ ✔ ✔ ✔
Customer
loyalty
✔ ✔ ✔
HR ✔ ✔ ✔ ✔
Value: Technological infrastructure & High market presence are significant resources for
generating income. In relation with Amazon, has good brand reputation which helps organisation
easily gain profits through expanding in international markets.
Rare: High online presence is a rare feature of Amazon that can be useful tool for them
to expand physically with its outlet stores across countries providing variety of products &
services.
Imitable: In context with Amazon, it is not easy for other rivalry firms to generate high
profits in short period of time since consumers are loyal to specific brand because of their quality
& reasonable rates. High market presence involves good market research and capital investment
that are not easily imitable.
Organised: Amazon is an organised platform to utilise their both human & material
resources ta its best possible way (Pat and Bandyopadhyay, 2017). Following organisation has
capability to use various online methods to maintain or organize activities of business.
P3 Evaluating various competitive forces in market sector through use of porters five forces
model
Porter's Five Forces Model:
This model is a quick analysis of knowing external capabilities of business & impact of
macro environment in industry. This framework framework has helped Amazon analyse five
competitive forces that are present in business environment. This model is useful to know actual
position of organisation in industry as compared to other competitors discussed below:
 Bargaining power of Buyers: Since consumers are provided with a to z products over
online website, there bargaining power is high with a whole lot of other options. When it
comes to the buyers of Amazon, has a huge customer base over internet and across

countries globally. The options consist of multiple websites providing same product at
cheap prices which may lead consumer to switch top other websites too.
 Industry rivalry: Since online sites have free entry & exit, Amazon therefore faces high
rivalry form other online sites providing same type of products. The organisation
therefore is facing high level of competition form others over internet businesses that
includes social media platforms, personal websites etc.
 Threat of New Entrants: There is a huge threats for new entrants since Internet is an
open platform that does not require much legalities or policies to be followed. The site
only require some guidelines of starting up their own business official site or selling
portal to sell their products online.
 Bargaining power of Suppliers: There are many suppliers in market through which
Amazon deals with or buys bulk quantities (Saldanha, 2019). Therefore bargaining power
of suppliers is less as compared to other small business websites. Amazon can easily get
products ta low prices to be sold to its consumers at reasonable rates.
 Threat of Substitutes: All type of ventures faces substitution threat because consumer
today have a whole lot of choices to buy from at good prices provided with effective
quality too. In relation with Amazon, there is high threat that substitute firms can take
over business but they have an edge over others because of having capability to buy
various goods & provide them to consumers at cheap prices.
P4 Applying range of theories, model & concepts for interpreting or devising strategic planning
within organisation
Porters Generic Strategies
Cost leadership: This strategy majorly focus upon minimizing wastage of resources
ultimately leading to minimisation of cost expenses effectively. The company have adequate
funds to invest into new technologies that give advantage of using resources in an efficient
manner. There are different form of sustainable initiatives taken by firm such as use of
technology over manual labour to reduce labour costs, use of artificial intelligence tools to avoid
duplication of work as well as promote automation (Mosele, 2017). Use of effective digital
marketing tools to for branding, promotion & advertising functions also have helped Amazon
reduce costs of big marketing campaigns for promotion.

Differentiation strategy: This strategy mainly focus on developing new strategies for
launch of new technology or product that may attract consumers at large. Strong value creation
tools such as content marketing, digital marketing & opening of physical stores can create good
value of chosen firm amongst potential buyers over internet. These tools help firm differentiate
itself from others in market rivalry. There are various sectors that Amazon operates on an
international level that requires this strategy to regulate work activities of expansion into new
markets globally.
Focus strategy:This is a customer centric strategy that deals with fulfilling various
consumer needs through launch of unique products or services that attract them at large (Yuan
and et.al., 2020). There are various software's that Amazon have been selling over online website
to give large businesses ease of functioning at their workplaces. This strategy is created by
marketers to know actual requirement of customers
These strategies have broadly contributed towards leading business to become one of
largest online platform that has capability to make available various products or services that
consumer demand for across world.
CONCLUSION
The above report concludes with application of various business strategies used by
chosen firm to improve their organisational efficiencies. Above assessment discussed about
internal capabilities of business through use of swot model approach. Also following model
explains about various theories or models such as porters five forces to know actual competition
in market for respective firm. Above report explains how managers of selected corporation can
use internal & external strategies to capture market as well as expand their business in various
sectors focusing of different customer segment. At last, porters generic business strategies are
used by firm to determine various factors that help business achieve ultimate goals effectively.
These include cost, differentiation & focus strategies for growth and development of business in
market industry.

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