Strategic Management Analysis of Amazon: Business Strategies Review

This report offers a strategic management analysis of Amazon, a multinational e-commerce giant founded by Jeff Bezos in 1994. It explores Amazon's mission and vision, emphasizing customer-centricity and providing a wide range of products at competitive prices. The analysis covers Amazon's business model, including its "flywheel" principle, mid-term and long-term strategies, current market strengths and weaknesses, and a SWOT analysis. Key strengths include a strong brand image and extensive product mix, while weaknesses involve imitability and limited penetration in developing markets. Opportunities lie in expanding into developing markets and brick-and-mortar businesses, while threats include competition and cybercrime. The report concludes by referencing key sources related to strategic management and Amazon's business operations.

Running head: STRATEGIC MANAGEMENT ANALYSIS
STRATEGIC MANAGEMENT ANALYSIS
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1. Introduction and about the company
Amazon.com is a multinational organization which operates in the electronic
commerce based industry and has its origin in the USA. The headquarter of Amazon is
located in Seattle, Washington. Amazon was established by Jeff Bezos in the year 1994. The
technology giant has been able to develop its position in the industry as the largest internet
based retailer. The organization has acquired the second-largest position in the world as
compared to Alibaba Group. The leadership based qualities of Bezos and strategies which
have been developed by the management are mainly important for the position which has
been established by Amazon (Amazon.com.)
The analysis will be based on the strategies which have been formed and executed by
Amazon and the current strengths and weaknesses of the company based on its operations in
the technology industry.
2. Mission and vision of Amazon
The success which has been achieved by Amazon in technology industry is based on
the mission and vision based statements. The direction which has been provided to Amazon
is also related to the ways by which the company operate in the industry. The mission
statement of Amazon is based on the ways by which the company aims at offering the
customers with the best products at lowest levels of prices. The convenience levels which are
offered to customers are also considered to be a major factor based on mission statement of
Amazon (Hill, Jones and Schilling 2014). The vision statement of Amazon is based on the
methods which are implemented by the organization in order to become a customer-centric
organization which can help the customers to find any product which they wish to buy. The
online operations of the organization are totally based on the ways by which Amazon aims at
fulfilling the needs and demands of customers in an effective manner (Amazon.com.).

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3. Nature of business of Amazon
Amazon has proved itself to be a leader in different online business based activities
which include, logistics, payments, ecommerce, media and data storage. The main principle
which is followed by Amazon in conducting its business activities can be termed as
“flywheel”. This can be described as a cycle which is based on the ways by which the
company aims at cutting the prices in order to attract the customers. This in turn is helpful for
the company to increase the levels of sales and profitability in the market. The flywheel
philosophy is thereby based on the aspirations and aims of Amazon to fulfil its dual
ambitions which include, customer obsession and ways by which the company can conquer
commercial world as well (Amazon.com.).
4. Mid-term and long term strategy of Amazon
The mid-term based strategy which can be developed by Amazon is based on the
ways by which the company can maintain its position in the industry with the help of its huge
customer base. The customer-centric nature of the organization can be maintained effectively
with the help of proper strategies based on providing them the value which is required
(Jenkins).
The long-term based strategy which can be implemented by Amazon is based on the
development of physical stores in different countries. The organization can compete with the
other physical stores which already operate in the industry. The leader can further aim at
taking the organization at a new level and further maintain the growth based activities which
have taken place (Wheelen et al.).
5. Current market based strengths and weaknesses

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Market based strengths – The low cost based structure which has been developed by
Amazon in the online retail based industry. The organization has been able to earn more than
100 Billion Dollars from the online sales. Amazon has also acquired the position of the
second-largest retailer in industry after Walmart in the year 2018. The growth rate which has
been shown by Amazon is much higher as compared to the other organizations of similar size
in the industry (Rothaermel 2015).
Market based weaknesses – The reduction is levels of profitability of Amazon in
online retail industry is a major weakness of the organization. The company has been facing
many quality based issues in the recent times due to the heavy dependency on Chines sellers.
The debt based rates of Amazon have started growing in the recent environment (Jenkins and
Williamson).
6. SWOT analysis of Amazon
Strengths – The strong brand based image of Amazon is a major strength behind the
success of the organization in the online retail industry. The product mix of Amazon is highly
extensive in nature which is able to fulfil the needs of different types of customers. The
service based attractiveness of Amazon is high and it is highly crucial to the success of the
organization in the industry of its operations (Doz).
Weaknesses – The high levels of imitability of business model which has been
developed by Amazon can be considered to be a major weakness. The organization has not
been able to penetrate the developing markets which has reduced the growth levels. Amazon
also lacks brick-and-mortar based presence which is not helpful for the company to compete
with the other organizations in the physical retail based industry. Amazon thereby needs to
maintain its competitive advantage in the offline and online retail industry (Ethiraj,
Gambardella and Helfat).

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Opportunities – Amazon has many different opportunities in order to improve its
revenues and profitability in the market. The organization can aim at penetrating different
developing markets in order to increase the customer base. Development of extensive brick-
and-mortar based business is also considered to be a major growth opportunity of the
organization. This can be helpful for Amazon to improve its operations in the online retail
based industry (Michael, Storey and Thomas).
Threats – Amazon has started facing many threats in the online retail based market.
The external factors are able to affect the performance levels of the business. Major threat
based factors which are faced by Amazon are based on imitation, aggressive levels of
competition and cybercrime as well. These factors are able to affect the revenues of the
organization in the operations in retail industry (Ethiraj, Gambardella and Helfat).

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References
Amazon.com. "Amazon.Com: Online Shopping For Electronics, Apparel, Computers, Books,
Dvds & More". Amazon.Com, 2018, https://www.amazon.com/. Accessed 25 Nov 2018.
Doz, Yves L. "Strategic management in multinational companies." International Business.
Routledge, 2017. 229-248.
Ethiraj, Sendil K., Alfonso Gambardella, and Constance E. Helfat. "Reviews of strategic
management research." Strategic Management Journal 38.1 (2017): 3-3.
Hill, Charles WL, Gareth R. Jones, and Melissa A. Schilling. Strategic management: theory:
an integrated approach. Cengage Learning, 2014.
Jenkins, Wyn, and Dave Williamson. Strategic management and business analysis.
Routledge, 2015.
Michael, Steven, David Storey, and Howard Thomas. "Discovery and coordination in
strategic management and entrepreneurship." Strategic entrepreneurship: Creating a new
mindset (2017): 45-65.
Rothaermel, Frank T. Strategic management. McGraw-Hill Education,, 2015.
Wheelen, Thomas L., et al. Strategic management and business policy. pearson, 2017.