Global Business Strategy of Amazon: Analysis and Evaluation

This essay provides a comprehensive analysis of Amazon's global business strategy. It begins by examining how Amazon responds to socio-economic and political changes, highlighting both the positive and negative effects of its operations on economic development. The essay then delves into the global strategies Amazon employs to ensure long-term success, including its Prime membership, focus on small businesses, use of artificial intelligence, and advancements in home delivery and healthcare. A significant portion of the essay is dedicated to the role of global value chain analysis in strengthening Amazon's competitive advantage, covering inbound and outbound logistics, operations, marketing, sales, and services, as well as firm infrastructure, human resource management, technology development, and procurement. The benefits derived from the Global Partner Network are also explored. The essay concludes by discussing strategies for formulating business plans in response to the challenges of internationalization and the role of international organizations in facilitating smooth international trade, especially during crises like COVID-19. The content is well-supported by references to academic literature.

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Contents
Introduction...........................................................................................................................................2
The ways the company responds to changes in the socio-economic and political landscape.................2
Positive and negative effects of Amazon on economic development....................................................2
Global strategies adopted by Amazon to extend the long-term success.................................................3
The role of global value chain analysis in strengthening its competitive advantage..............................4
Benefits from Global Partner Network..................................................................................................6
Ways to formulate business strategies in response to the challenges of internationalization.................7
Role of international organizations in ensuring smooth international trade amidst the devastation of
COVID-19.............................................................................................................................................8
Conclusion...........................................................................................................................................10
References...........................................................................................................................................11

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Introduction
It has become a major concern for the managers to decide on a global business strategy as a
trade-off between global incorporation and local receptiveness. The global incorporation is all
about a degree to which an organization is capable of using the same products and methods in
other nations. The local responsiveness is the degree to which an organization should modify
their products and approaches to encounter conditions in other nations. These two dimensions
result in global business strategies. This strategy can be described as business strategies
affianced by the administrations functioning in an international business atmosphere and
serving customers worldwide. The short-term goals behind the global strategy are to enhance
routine operations of the organization whereas long term goals are to ensure growth and
firmness of the organization and supremacy over the world. This report comprises the global
business strategy of Amazon.
The ways the company responds to changes in the socio-economic and political landscape
Amazon has disrupted the way people shop. Amazon is benefitted from the political stability
of the nations. It assists the company in making expansion and diversifying business in the
developed nations. For instance, Amazon has been able to expand its physical stores in the
U.S to complement its e-commerce business. The low unemployment is convoyed by wage
growth and it fuels inflation as businesses pass on the costs to the customers. Amazon has
interrupted traditional retail and its overhead costs are also suggestively lesser than other
retailers. It provides Amazon an edge to weaken rivals on the prices and function on a lesser
profit margin (Contractor, et al. 2019).
Amazon has conducted lobbying practices to deal with the negative implications of the
political factor. The company is increasing its lobbying budget in the US for almost 2 decades
now. The progressing incorporation of internet and internet-linked products and services into
several aspects of the lives of people has provoked advent of the cyber-crimes in various
forms. But the company is struggling with cyber crimes by several measures. These measures
differ from nation to nation (Ives, Jarvenpaa and Mason, 1993). Amazon is having security
measures that take place at every step taken by the users while using a website or application.

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Positive and negative effects of Amazon on economic development
The positive effects of Amazon on economic development have been realized from the points
stated below:
 Amazon is having positive effects on United States Jobs at the local and national
level. The company is having more than offset potential cannibalization of brick and
mortar retail employment.
 Amazon has made evolution and disruption in the retail market. It has made changes
in the way people shop online and physical stores because of the increasing e-
commerce (Guo, et al. 2019).
 Amazon has various fulfillment centers that have created various jobs. The company
is also a catalyst for robust job growth. For instance, Amazon has added jobs in the
transportation, utilities and warehousing sector (Johnson, 2016).
 Amazon’s maturation offers an enhanced buying experience, customer cost savings
unknown level of convenience. It has positively influenced the economic growth of
the employees of the company (Dicken, 2007).
The negative effects of the company have been observed in the form of:
It has been found that Amazon has demolished more jobs than it has formed. There are
quite less opportunities for employment, lower wages, and uneven employment because
of the dependence on temporary workers.
Amazon is recently marked with the ‘stranglehold’ on the U.S. economy. As evidence
from the annual report company of Amazon and its corporate website, it has been painted
as a dreadful portrait due to its influence on the economy (Forsgren, 2017).
Amazon has been able to disrupt traditional retail through lessening overhead costs and
passing savings to the customers which have ultimately lessen the profit margins of the
competitor companies. The decrease in the profit of competitors has resulted in
decreasing employee wages. It has been viewed that current unemployment rates are still
low in the last decade (Adaji and Vassileva, 2017).
Global strategies adopted by Amazon to extend the long-term success
Amazon initiated its business as an online bookseller with the ambitions to rule the universe.
With the expansion in its core footprints, the company is growing in the different segments.
The company believes in developing its strategies on the things which do not change.

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Moreover, the company believes in ‘Frugality’ which means a company like to spend on the
things only which are preferred by the customers. The company starts with customers and
work backward. Amazon always focused on the long term, not the short term. AWS (Amazon
Web Services) is one of the examples of the long-term focus of Amazon (Coe and Yeung,
2015). The leading companies such as Airbnb, Pinterest, Capital One, GE, McDonald’s and
Johnson and Johnson. The global strategies adopted by the company for long-term success
have been stated below:
Prime as the hub of the wheel: Prime was the first edged by Amazon as an incremental
enhancement in the value proposition in the way of free shipping. The company claimed of
having more than 100 million subscribers of Prime. Prime is leveraged as dominant to the
strategy for innovative businesses incoming the market.
Fuel for small businesses: The B2b (Business to Business) process is quite troublesome. It
has been alleged that Amazon seeks to govern services such as logistics, robotics, and
cashless checkout. The company provides more funding to new ventures which can enhance
several e-commerce services (Donders, et al. 2018).
Artificial intelligence: Artificial intelligence (AI) is leading in the form of Alexa. Alexa
provides unmatched access to Amazon’s super in the hole, zero-click. It has transformed
shopping by offering customers the capability to replenish many obligatory supplies through
verbal commands.
Home delivery and supply chain logistics: The strategy of Amazon, ‘airborne fulfilment
center’ enables delivery products by drone from a aircraft line device. The company commits
to offer products within 48 hours (Chen, 2017).
Healthcare: Amazon has made a bold move by taking entry in the pharmacy services. The
company can disrupt the pharmacy industry easily with healthcare inflation. Amazon has
come up with Cardinal Health and other suppliers to make a wide grasp in the medical
services to the healthcare organizations (Ranasinghe, 2019).
The role of global value chain analysis in strengthening its competitive advantage
The value chain analysis of Amazon analyses the business activities in reviewing the way it
can form a competitive advantage for itself. The value chain analysis of Amazon includes
primary and secondary activities. The primary value chain is directly comprised of

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manufacturing and marketing the product to the targeted customers (Mutum, 2020). The
primary value chain activities have assisted in attaining competitive advantage in the form of:
Inbound logistics: The inbound logistics enables Amazon to emphasis on every facet of
revolution from raw material to the final product. Some of the instances of inbound logistics
of Amazon are recovering raw material, storing inputs and within dispensing raw material
and apparatuses to initiate production (Pei, Wang, and Ye, 2017).
Operations: The operational activities become more significant when raw material reaches
and Amazon is capable enough to process the raw material into the final product and present
it in the market. The operative activities of Amazona are identified as packing, machining,
amassing and testing. The apparatus repair and maintenance also come under the operational
category. The operations comprise manufacturing and service operations. For instance, the
operations segment includes North America concentrated websites like www.amazon.com,
www.amazon.ca, and www.amazon.com.mx. The sales under these segments have been
upsurge by 33% in 2017 and 2018.
Outbound logistics: Outbound logistics comprise the activities that distribute the product to
the customers bypassing various mediators. The outbound logistics activities of the Amazon
are warehousing, material handling, forecasting, conveying and transporting to the final
decision. The fulfillment centers are part of outbound logistics. The company functions 109
fulfilment centers worldwide. Amazon is also making use of the robotic technology in a wide
means to accomplish the receipt, loading, picking and consignment of products. The
company also attained a competitive advantage in the form of digital delivery. Such products
and services can be taken directly from the Amazon website (Kalia, Arora, and Law, 2017).
On the other side, Amazon has attained Whole Foods Chain in 2017. It has assisted the
company in generating greater revenues.
Marketing and sales: The global marketing expense of Amazon is consistently increasing in
the last years has even exceeded USD 13.8 million in 2018. It comprises advertising and
other promotional costs. The marketing and sale have been identified as one of the foremost
sources of value in the processes.
Services: Customer service has been a major source of competitive advantage. The company
provides unique customer services. The customers are given the facility to contact Amazon
via email, phone or social media (Wang, et al. 2020). The customers are also provided with
the opportunity to know about the opportunities through the ‘selling coach program’.

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On the other hand, secondary activities have a great role in managing and enabling the
primary value chain activities. The secondary activities are comprised of:
Firm infrastructure: The active infrastructure management of Amazon enables to optimize the
value of the entire value chain. The infrastructure of the company contains activities like
tackling legal matters, planning, quality management, financing and strategic management
(Goel, et al. 2020).
Human resource management: Active HR management enables the company to minimize
modest pressure relied on pledge, inspiration, and skills of the staff. Amazon has attained its
cost minimization purposes through analyzing signing and training costs (Li, Frederick, and
Gereffi, 2019).
Technology development: The value chain analysis of Amazon relies on technical assistance.
The technological incorporation in distribution, manufacturing and marketing, and HR
(Human Resource) activities require the company to realize the significance of technological
advancement.
Procurement: The procurement in the value chain is stated to the procedures comprised of
acquiring the inputs which can range from equipment, machinery, supplies, raw material and
other items required to finish the final product (Rossman, 2016).
Benefits from Global Partner Network
AWS Partner Network (APN) is a global partner program for technology and accessing
businesses that leverage Amazon web services to develop solutions and facilities for the
customers. The Global partner network assists companies to grow and succeed. When the
companies progress through APN, it assists in exposing more benefits and programs
personalized exclusively for consulting and technology partners. APN assists companies in
making, marketing and selling AWS offerings by offering not only appreciated business,
mechanical and marketing assistance (Yadav and Bhatnagar, 2020). There are several APN
Partners in the world and more than 90% of the fortune hundred companies are using APN
partner solutions and services.
There are two types of APN partners such as consulting partners and technology partners.
The APN consulting partners are the professional services companies that assist all types of
customers and sizes design, construct, architect, drift and sustain capabilities and applications
on AWS. It quickens the journey to the cloud. These generally execute technology partner

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solutions with professional services. APN consulting partners comprise strategic
consultancies, system integrators, agencies, succeeded service providers and value-added
resellers. On the other side, APN technology partners offer hardware and software solutions
that are unified with the AWS cloud. The technology partner products are generally
transported as apparatuses to wider AWS customer solutions (Reinartz, Wiegand and
Imschloss, 2019). The customer solutions can even be transported internationally through
consulting partners by AWS marketplace, bundled solutions or straight from the APN
technology partners.
APN strengthens the capabilities of Amazon to serve customers better. Amazon is
concentrated on constructing long-term sustainable businesses by assisting partners in
constructing, marketing and selling offerings along with developing an effective cloud-based
business. Moreover, Amazon partners differently, the company leads with the customers first
and plan strategies to enable APN partners to offer high-quality AWS solutions and services
to joint customers. It makes quite easy for the partners to find appropriate business and
technical resources in constructing an effective and profitable business (Wu and Gereffi,
2018).
Through APN, Amazon can attain popularity along with the greater profits. On the other side,
partners can attain benefits by leveraging the AWS brand identified for customer centricity,
innovation, and stride of innovation. The partners can even deliver more innovation with the
consistent developing portfolio of groundbreaking AWS technologies and services. The APN
programs even assist companies in highlighting expertise along with the differentiation of the
business practice.
Ways to formulate business strategies in response to the challenges of internationalization
Amazon has been a powerhouse in the US e-commerce market since its inception. After
establishing itself in the leading English-speaking e-commerce markets, Amazon has decided
to look to the rest of the world, especially in the last years to expand its dominance in the new
provinces. Internationalization has been key to the success of Amazon. But along with the
success, the company faced significant challenges. Amazon has moved destructively to
expand its footprint across the world in the last few years (Walter and Zhang, 2012). The
company has even used a simple strategy to enter into the new markets by entering into the
nations that are growing rapidly in terms of e-commerce adoption.

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Amazon has been using launch strategy in various nations around its Kindle business.
Initially, the company starts by conveying with the local book publishers. Once the
agreement gets finalized, the company starts marketing Kindles and eBooks as a method to
get its hold in the market. For instance, Amazon used a launch strategy while entering the
Brazilian market in 2012 after making a deal with the native publishers to sell eBooks. It
assisted Amazon to create its position in the Brazilian e-commerce industry, endeavored to
woo cosmetics producers in the nation and even though to rent a warehouse facility near Sao
Paulo earlier (Tallman, Luo and Buckley, 2018).
When it comes to internationalization, Amazon’s strategy is majorly grounded on leveraging
technological competences for business efficiency. The company follows a cost leadership
strategy that assists the company in minimizing expenditure and maximizing profitability.
Moreover, this business strategy provides maximum value to the customers by making
available goods at the lowest prices in the market.
Amazon makes use of optimizing titles, bullet points, and product descriptions individually
for each nation. It is well known that search and purchase behavior of the customers vary
from nation to nation due to various cultures and living conditions. The company can waste
valuable potential if it ignores the preferences and requirements of the customers (Vieira, et
al. 2018). Amazon has learned about the differences between the nations, therefore conducts
a detailed content significance analysis of the product for each nation.
Amazon even formulated a strategy to overcome the internationalisation challenge by striking
harmony with the country's target group. It is a crucial point for Amazon country-specific
particularities when it comes to the perception of products and product categories. So, the
company has undertaken a quite objective approach for content optimization. The company
also concentrates on good marketing and persuasively framed arguments (Sprague, 2011).
Amazon also works on the creation of the nation-specific keywords. It has become quite
significant for the company to deliberate each nation's individuality concerning visibility. The
nation-specific modifications can be imitated by the keywords. To make a high-performance
keyword set, editors make use of the autocomplete feature of Amazon’s search function. It
reveals the most common search items and combinations employed by the customers.

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Role of international organizations in ensuring smooth international trade amidst the
devastation of COVID-19
COVID-19 pandemic has disrupted trade around the world. International organizations have
taken immediate measures to facilitate trade in medical supplies, equipment, and agriculture
products. The availability and accessibility of the vital medical supplies and pharmaceuticals
at reasonable prices have been supported by international organizations on an equitable basis
where it is more required even by inspiring additional production. The international
organizations are even guarding against profiteering and unfair price increases. The
emergency measures have been designed to tackle COVID-19 and unnecessary barriers to
trade have not been created for international organizations. But the international
organizations are required to follow the export restriction made by the specific nation for
export restriction on medical supplies and equipment as a precaution to the pandemic (Sahin,
et al. 2020).
The international organizations are consistent to form coordinated approaches and share
decent practices to facilitate flows of essential goods and services. The goods made available
by international organizations are just medical and essential supplies only. Although, other
goods have been restricted by WTO (World Trade Organisation) during a pandemic. The
restriction put during movement is temporarily useful to limit the international spread of the
highly infected disease. In such circumstances, nations should perform risk and cost-benefit
analysis before the execution of the restrictions to assess whether benefits offset
disadvantages.
The COVID-19 can be effectively addressed through timely and appropriate information.
International organizations have committed to enabling the consistent flow of essential
medical supplies, equipment, and agricultural products. It has been made possible by working
together to offer a free, fair, transparent, non-discriminatory and stable trade and investment
environment. The international organizations are holding the principle of international
harmony along with deliberating the growing needs of other nations for emergency supplies
and humanitarian support (Sohrabi, et al. 2020). International organizations are making sure
that smooth and consistent operations of the logistics networks are serving as the backbone of
the international supply chains. The ways for logistics networks have been discovered in the
form of air, land freight and sea to remain open along with facilitating the vital movement of
personnel and professionals across borders without deflating the efforts to avert the spread of
the virus. On the other side, it is continuing to monitor and evaluate the influence of the

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pandemic on both local and international trade. Moreover, the organizations are functioning
to form harmonized approaches and share decent practices to facilitate flows of essential
goods and services. But the global economy is required to get ready to face the pandemic
among predictions of deep recession (Van Staden, 2020).
When it comes to Amazon, the company has added 100,000 jobs for meeting buyer demand
and to support existing employees in pleasing orders for the vital products. Amazon has
augmented pay for hourly staffs by $2/hour in the U.S, C$2/hour in Canada, and €2/hour in
several European nations. Moreover, the hourly base pay has been doubled for every
overtime hour worked. The employees of the company suffering from coronavirus are even
provided with extra time-off and full pay. Amazon has also enhanced the capability for
grocery delivery from Amazon Fresh and Whole Foods Market as fast as possible.
Conclusion
The global business strategy of Amazon has enhanced routine operations along with ensuring
the growth and constancy of the organization and ascendency over the globe. Amazon has
been disrupted the way people shop. The company is responding effectively to the changes in
the socio-economic and political landscape. The negative implications of the political factors
have been dealt with by Amazon through lobbying practices. When it comes to the effects of
Amazon on economic development then there are more positive effects than negative effects.
Amazon is having positive effects on U.S Jobs at the local and national level. The company is
having more than offset potential cannibalization of brick and mortar retail employment.
Moreover, small retailers can increase their business and turn into an empire over Amazon.
The global strategies adopted by Amazon have been effective for long-term success. Amazon
has revolutionized retail. The company starts with the customer and work backward. The
global value chain has been quite effective in attaining a competitive advantage. The inbound
logistics and operations assisted Amazon in attaining a competitive advantage. Amazon got
benefitted from Global Partner Network by leveraging Amazon web services to develop
solutions and services for the customers. Amazon even formulated business strategies as a
response to the challenges of internationalization such as leveraging technological
capabilities for business efficiency.

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