Amazon's E-commerce Strategy: A Business Model Analysis

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BMGT7011 E-BUSINESS
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Introduction
Electronic commerce involves buying and selling of product and services via an online platform.
It enhances transactions related to business to customer, customer to customer and business to
business. Ecommerce business is mostly operated through a variety of applications such as
online Cat Log, shopping carts, web services through mobile services. Such practices commonly
called a form of a business transaction through which parties interact via electronic service rather
than physical contact. The essay includes e-commerce practices of Amazon which is the largest
eCommerce organization in the world. Amazon focuses on cloud computing practices, artificial
intelligence, and digital streaming and it is interconnected with Apple and Google. It offers
different products over more than 17 crore original products at great prices (Uenlue, 2018).
The essay explores on its organisation business model though which value prepositions and main
competitors of Amazon are summarised. Further, the essay involves the significance of
information technology infrastructure in the context of developing e-commerce and e-marketing
strategies. The significant aim of the essay is to define how the performance of e-business model
helps in developing marketing growth of e-commerce organisation. Alongside this,
implementation of e-commerce marketing and advertising are summarised in the context of
accomplishing targets of the market and enhancing customer retention rate.
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Organisation business model
Organisation business model helps in determining the approaches through which business
growth can be extended in an effective manner and develop a customer value proposition.
Amazon has developed its great sustainable organisation model through which it can be
evaluated that the company has a focus on its competitors and has developed an effective market
strategy. As the essential motive of every organisation is to focus on the development of the
mitigation process through which risk factors can be reduced and customer retention rate can be
enhanced (Uenlue, 2018). The managers of Amazon has developed an effective market strategy
which helps in accomplishing targets and in attracting the customer towards enhancing business
growth in the global market.
Customer value proposition
Jeff Bezos CEO of Amazon has drawn a virtuous cycle for Amazon which helps in developing
better customer value proposition in the market. It develops customer experience towards the
products and services of the company. The three customer value propositions of Amazon are:
 Low prices: Amazon has developed the cost structure of products and services as per
customer experience. The price factor is the essential factor which enhances customer
attraction, but low prices with high-quality products are an essential factor which
develops customer value preposition of business (Carayannis, Sindakis & Walter, 2015).
 Fast delivery services: It offers its product and services through the fast delivery
process, the fast delivery process has helped in developing customer satisfaction and
enhances customer experience (Payne, Frow & Eggert, 2017).
 Vast selection: It offers more than 17 crore original products and it also offers home
service with credit and payment services. Alongside this, it also offers its own products
such as prime video, fire tablets, Fire TV, Amazon music and Alexa. These innovation
has extended the market growth of the company and has enhanced customer value
proposition (Uenlue, 2018).
Main competitors
Main competitors of Amazon in the global market are Best Buy, Family Dollar, and Target
(TGT). These competitors are the main business threats of Amazon. These competitors have also
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made great value prepositions and have earned great customer retention rate in the global market.
The essential motive of every organisation is to enhance its market growth by developing
strategic techniques in a tough competitive market. Amazon has developed various strategies
such as prices of products with better quality. Along with this, the company provides quality and
timely services such as the fast return of the product, timely payment and security connectivity to
customer accounts. Such aspects help in developing a better competitive advantage as
compared to other competitors in the market.
Marketing strategy
In the development of marketing strategy, Amazon has to analyze various aspects which helped
in enhancing its market growth. There are various aspects such as such development of
marketing mix strategy which involves a product, price, place, and promotion of products.
Further, Amazon uses demographic and psychographic segmentation for enhancing the actual
purchase behavior of the customer. The company mainly focus on eCommerce segmentation by
utilizing artificial intelligence technology to enhance customer experience (Uenlue, 2018). The
main motive of every company is to accomplish targets of the market by developing appropriate
market strategies.
For making a sustainable marketing strategy company offers low prices for developing the
buying behavior of the customer and make an effective competitive edge over market
competitors. With such practices, Amazon has become one of the largest players in the online
sector. Further, it is analyzed that it has adopted a BCG matrix for enhancing marketing strategy
which enhances the market share of the company by increasing demands of its products (Uenlue,
2018).
Revenue model
The revenue model of Amazon is developed effectively by enhancing client segments. The
revenue of the company depends on how products and services of the company are in demand
through customers in the market. Along with this, the essential motive of Amazon is to develop
an effective value proposition which will enhance the prosperity of the organisation. Further, the
company has developed a better relationship with channels and with market clients (Skalen,
et.al., 2015). The company has developed an effective relationship and engagement of
stakeholders through which the company has advanced its revenue structure. Key resources and
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key partners have enhanced the value proposition of the company and have developed an
effective revenue model of the company (Uenlue, 2018). The company has developed effective
strategies such as the adoption of the better value proposition which enhance customer
experience and demands of products like prime video, Alexa and other services such as fast
delivery has enhanced customer satisfaction. Such aspects have created a huge impact on the
revenue model of the company by increasing its profitability and by developing sustainability for
a long period of time.
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Information technology infrastructure
As a big migrated organization from the traditional business models to the permutation of e-
business models, the necessary details and particular customer information, increment of stakes
for the business can be done through information technology infrastructure (Ahmad, et. al,
2015). Although there are various benefits for investing in information technology infrastructure;
however, can easily devastate the management team. Amazon is required to establish a new
information infrastructure system which is more critical in order to release a positive impact on
the performance of the Amazon. The impacts on infrastructure are required to involve customer
database management system, communication networks, advanced security & procedures
systems, etc. The biggest impact on the services can be made by developing highly advanced
security systems. Newly established information infrastructure system helps to establish few
systems such as:
 Application management
 Communication management
 Data management
 IT management
 Security
 Education & learning
 Research & development
 Architecture and standards
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E-business strategies
The way enterprise technology and software companies are required to approach marketing
themselves are evolving and it is imperative to advanced planning that will produce the real data.
Electronic business strategies may include new advantages through electronic commerce strategy
(Awiagah, et. al, 2016). The strategies are proving very helpful in order to get establish new
strategy with highly advanced techniques such as:
 Data communication networks: Communication refers to the main process which helps
to bring more consistency in the business in order to share relevant information in the
process.
 Database system: Although Amazon is holding very significant database management
systems to handle all the critical aspects of e-business. But applied advanced database
management systems ensure powerful languages, bulk storage recording system, etc.
 Architecture for autonomous intelligence: Autonomous intelligence is basically a set
of attractive application which includes planning, monitoring and controlling the
activities of online business.
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E-business model performance
 The involvement of e-business in order to get higher and more significant value can get
by the managers of Amazon. The newly established infrastructure of Amazon is way
more productive in order to get centred results and most profitable results (Mazzarol,
2015). The infrastructure of information technology helps to record the details and
queries of the customers. Major functions of Amazon are perhaps influenced by
involving information technology infrastructure. The consideration of resourcing the
values is applied where the energy is delivered reliably transferred. The techniques and
ingenuity of people can come together in order to get higher profit for Amazon. The
power distribution and controlling safety & security can bring more centric results and
centric results. Highly advanced recording systems can keep the data and information of
customers so the safety of customer can be prevented. This practice ultimately results
higher customer satisfaction and supreme revenue generation.
 A set of cost clear understanding and conceptual approaches of involving the
infrastructure can bring more consistency with the help of many benefits advantages. The
advantages can be in terms of cost reduction. Emerging infrastructure in the practices of
Amazon helps to reduce cost or additional expenditure. Another concentration on the
business of Amazon is asset returns (Choshin & Ghaffari, 2017). The fairness in business
decision-making with advanced inventory of the business to purchase and redistribution
of information to the management. Revenue generation can be possible by increasing the
value of production and operational system. In order to get improvisation in the revenue
generation, the managers are required to get proficiency in the production functions and
advanced communication system.
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E-commerce marketing & advertising
 Supply chain, sustainability, communication and customer engagement plan is a set of
controlling and scheduling the business activities of the business in order to increase the
recognition of Amazon (Rahayu & Day, 2015). Inventories and deliveries of customer
products to the customers are done effectively through effective supply chain
management with critical components. Communication with business suppliers in the
business can bring more efficiency. Customer engagement makes more significance if the
customer shows equal response to the context of absolute advantages. The market
development in order to establish market penetration the marketing strategies are
typically involving new product development and diversification strategy. Amazon is
also acquiring the subsidies to focus on business intends to get a new business area
(Mazzarol, 2015).
 The infrastructure affects the e-commerce transactions very effectively because the
involvement of highly advanced information system which helps to record each
transaction for the business in order to get more efficiency. The main factors in the
business can bring a new management information system which helps to schedule the
work. Reporting of online purchase and sale of products on the platform of Amazon. The
main objective of establishing infrastructure on the business to increase the consistency
of production and operational department. Established infrastructure in Amazon can help
them to maintain the records and segregation of its customers and vendors. Basically the
management of Amazon has found most effective tool for the business and new business
aspects which helps to transform the record-keeping system. Interaction and relationships
between customers, vendors and subsidiaries can be improvised through effective
infrastructure system (Kurnia, et. al. 2015).
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Conclusion
Based on this report, it has been concluding that Amazon has applying highly advanced tools and
techniques to increase the efficiency of the business. The main objective of increasing the
effectiveness of infrastructure information technology in business can make higher efficiency
and working potential of Amazon. Information technology in the business practices of e-
commerce such as Amazon helps to establish new record-keeping systems. It is not only
effective for the customers as customer engagement but also enables the approaches supply chain
management to maintain the relationship with vendors, subsidiary partners, etc. The above
business model is demonstrating ultimate technique to analyse its competitors so their
management could make effective product development and market share. Techniques of new
marketing strategies and new market penetration strategies often help the organization to
evaluate marketing activities. A set of conceptual theories and effective business model more
efficiently empowers the aspects of business models and infrastructure of Amazon.
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References
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