Innovation and Sustainable Business Development Report for Amazon

This report delves into Amazon's innovative practices, specifically focusing on design thinking as a key strategy for business development. It explores the interrelationships between key concepts of design thinking, including the organizational environment, innovation trends, innovation strategy, innovation capabilities, value creation, and capturing innovation. The report analyzes these concepts within the context of Amazon Online, highlighting the importance of developing an innovation strategy and its impact on the company's market position. It examines how design thinking influences product development, customer experience, and business models. The report also provides recommendations for Amazon to further enhance its innovative capabilities, such as fostering a centralized discourse on innovation and developing innovative leadership.

Running head: INNOVATION AND SUSTAINABLE BUSINESS DEVELOPMENT
Innovation and Sustainable Business Development
Name of the Student
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Contents
Introduction................................................................................................................................2
Amazon Online......................................................................................................................2
Design Thinking as an Innovation Trend...............................................................................2
Aim.........................................................................................................................................3
Discussion:.................................................................................................................................3
Inter-relationships between Key Concepts of Design Thinking:...........................................3
-Environment within the Organization:.............................................................................3
-Trend in Innovation..........................................................................................................3
-Strategy of Innovation......................................................................................................4
-Capabilities for Innovation...............................................................................................5
-Value creation...................................................................................................................5
-Capturing Innovation........................................................................................................5
Importance of developing innovation strategy.......................................................................6
Impact of the innovation trend on Amazon:..........................................................................7
Conclusion/ Recommendations:.................................................................................................8

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Introduction:
Amazon Online
Amazon online is an online E-commerce retail business that is based in America and is one of
the industry leaders in online retail. Amazon online boasts a huge variety in its inventory
including products like computer peripherals, home wares, hygiene products, electronic
equipment, games, software, music, toys, grocery items, accessories, clothing, books, toiletry,
kitchenware. The company has significant investments in cloud computing and artificial
intelligence which has allowed the company to achieve significant market success. With over
hundred million subscribers it is the biggest Internet Company globally in terms of its
revenue. Amazon online also has one of the biggest market captures due to which it runs
ahead of its competitors such as Flipkart and Walmart.
Various strategies and trends can be seen within innovative practices, one of which is Design
Thinking which helped the company to overcome competition and maintain its position as the
market leader.
Design Thinking as an Innovation Trend
Design Thinking refers to a process through which new ideas can be developed as an
approach to implement innovation within practice. This trend implies a focus on the concepts
of product design and therefore helps to identify innovations within the design process.
Hence the name, Design Thinking. According to Liedtka (2013) and Filatro et al (2017)the
Design Thinking process requires a cognitive as well as strategic and practical approach in
which multiple domains of designs are considered and design cognition are identified which
influences the design activity through the implementation of the design concepts. This

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approach moreover, helps in the strategic implementation of innovation within product design
(Brenner and Uebernickel 2016).
Aim
The following study aims to understand and explore the innovative practices utilized by
Amazon Online and develop understanding on design thinking as an innovation strategy.
Discussion:
Inter-relationships between Key Concepts of Design Thinking:
According to Royalty and Shepard (2018), several components are related with the process of
Design Thinking. These components influence the businesses and business processes on a
regular basis. By focusing on these components design thinking can be implemented
strategically across various business processes and thereby ensure better success.
(Chesbrough et al. 2018) Outlined below are the key concepts of Design Thinking in the
context of Amazon Online:
-Environment within the Organization:
The environment of the organization can be understood as the collection of factors, forces
and institutions within which an organization exists and influences the operations and
performance of the organization (Dutta and Folta 2016; Filatro et al. 2017)). According to
Liedtka and Ogilvie (2011) the organization environment should focus on the development of
a community of designers and manufacturers who can co-exist and co evolve by
implementing and supporting innovative practices and thereby facilitating creativity within
the organization. The organizational environment is a key influencer and motivation of
employee behavior and therefore their creativity and innovative ideas. It can therefore be
suggested that the environment within an organization is an important factor that can

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influence the trend of influence adopted in an organization (Liedtka 2013; Liedtka and
Ogilvie 2011).
-Trend in Innovation
The trend of innovation can e understood as the practices that implement innovation ideas
within an organization or an industry and thereby create new design for products and
services. Amazon Retail utilizes the innovation trend of Design Thinking to implement new
concepts for services and products and thereby support their market position as leaders
(Liedtka 2015; Liedtka et al. 2013). One of the ey strength of the Deign Thinking process is
that it helps in the development of innovative products keeping in mind the needs and
expectations of the customers. According to Brenner and Ubrmickil (2016) , Design Thinking
can assist both divergent and convergent validity of an idea where the main assumptions,
principles as well as the processes an be analyzed and evaluated. The process of Design
Thinking involves a wicked problem being identified followed by framing it effectively,
focusing on possible solutions, reasoning on the solutions and identifying strategies that can
be used to address the problems and creating ideas for the solution. the innovation trend
therefore, integrally influences the innovation strategy that would be used in an organization
(Martinez-Conesa et al. 2017; Ojasalo et al. 2015).
-Strategy of Innovation
Strategy of innovation is the procedure using which a business can implement innovative
practices within its operations to improve its performance in terms of service or product
quality, efficiency, productivity, affordability, and aesthetics (Pel 2016). This strategy is
dependent on the innovative trend utilized by an organization through which it can address
and solve a problem through an articulation of innovative concepts , sharing them and
creating a pool of knowledge that can inform the decision makers and designers. The strategy
is dependent on the innovative capabilities of a business and therefore is a factor that links the

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innovation trends to the innovation capabilities. Amazon Online utilizes the strategy of
process innovation and marketing innovation through which it can support better product
delivery and effective marketing. Additionally, amazon also has strong organizational
innovation that supports innovative changes in the workplaces and best practices (Royalty
and Shepard 2018; Torres et al. 2018).
-Capabilities for Innovation
Capabilities for innovation are an organization’s capacity to develop and implement
innovative ideas in its operations. This can involve using creative and technological
breakthroughs and restricting existing business processes to adapt to the new changes. The
capabilities influences the innovative strategies used by an organization. Transaction
capability is one key innovation capability of Amazon Online that allows it to have efficient
and profitable negotiations with the vendors and suppliers thereby ensuring a competitive
price range for its products. The company utilizes the capabilities of creative abrasion (to
generate ideas using discourse and debate), creative agility (to experiment and test using fast
pursuing, reflection and adjustment) and creative resolution (to make integrative decisions
that combines opposing or disparate concepts and ideas) (Royalty and Shepard 2018).

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Fig 1: Three capabilities of Innovation. Source: Royalty and Shepard 2018
-Value creation
Value creation refers to the development of added values for a product or service that can be
used to attract customers. It uses the hypothesized value for a service or a product, based on
design Thinking that connects the resources of the organization with the capabilities and
develop creative or innovative ideas for the products or services. Amazon Online utilizes a
combination of value innovation and technology innovation to create value for its products
through its efficient pricing and better selection of technology. Additionally, Amazon also
uses innovation to generate ideas, convert them into practice and diffuse them within the
organization to create a value for all stakeholders (Pel 2016).
-Capturing Innovation
This is a strategy that can help an organization to understand an use innovative practice
within its services and products thereby utilizing the benefits of innovative practices.
According to Pel (2016) the capturing of innovation influences the creation of value within a
product or a service and therefore influence the success of an organization in the market. This

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can help a business to align its operational objectives with the strategic directions and
implement innovative practices within the organization. Innovation capture is the final step
within the innovation process which helps to put in action the innovative ideas (Ojasalo et al.
2015).
Fig 2: Components of design thinking. Source: Ojasalo et al. 2015
Importance of developing innovation strategy
The importance of developing innovation strategy is briefly outlined below within the context
of Amazon Online:
1. New market capture: According to Martinez-Conesa et al (2017), design Thinking can
help an organization to effectively utilize innovative practices and innovative ideas to
design new products and services which keep in consideration the feedbacks, needs
and expectations of the customers and thereby attract them more effectively.
Segments of customer market who are focus on product diversity, product quality,
customer sensitivity and design efficiency can be effectively encroached through this
innovation process. Liedtka (2013) suggested that through design thinking as an
approach towards innovation an organization can improve its unique selling points
and thereby help to attract the target audiences more effectively.

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2. Developing the values of the products and services: the innovative practice has helped
Amazon online to improve the values associated with its products and services and
thereby improve the experience of the customers and create value for its product. This
involves not only enhancing the features that are existing in the product but also
developing new values that are driven by the needs of the users and design
capabilities of the organization. Ultimately this approach helps to reach out to new
customers through an improvement of the values and qualities of the products and
service offered by Amazon.
3. Developing an effective business model: The innovative strategies of Design
Thinking have helped amazon Online to create a business model that is effective and
efficient and have assisted the organization to maintain its leadership position. This
model has allowed Amazon to address the existing needs within an organization and
have better product testing thereby ensuring consistency in product quality.
Innovative practices in business model therefore ensure Amazon to implement its
creative and innovation ideas within the business processes and gain competitive
advantage (Torres et al. 2018).
Impact of the innovation trend on Amazon:
The innovation trend of Design Thinking has offered many advantages for the organization
allowing it to achieve market growth. The impacts of Design Thinking on the organizational
process of Amazon are outlined below:
1. Better testing of products has been facilitate by the innovative practices through
which a product can be tested from various angels and strategies and develop designs
that are more resilient and are fault tolerant. This also helps to implement better
quality products and services which can help it to maintain its position as a leaders in

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the market. Innovation in product design has also helped Amazon to increase its
diversity on its inventory allowing to reach a wider variety of customers through a
wider diversity in products and services.
2. Keeping the customer expectations as a center of the business model has helped
Amazon to address the needs and expectations of the customers and thereby improve
their experience with the brand. This has also helped the company to develop a better
brand image that its competitors.
3. A positive work culture has been developed through the innovation and creative
directions of the management and develop and inclusive work culture that helps the
organization to implement creativity and innovation in its work practices.
Conclusion/ Recommendations:
Few recommendations can be given to Amazon Online that can help it to address some of its
key organizational challenges and effectively implement innovative practice within its
business processes. These recommendations are outlined below:
1. Amazon should focus on a centralized discourse on innovative concepts in which
important ideas can be labeled and a feedback system can be involved through which
a communication can be developed between the developers/designers and
users/customers (Liedtka and Ogilvie 2011).
2. To effectively organize its innovation activities, Amazon online should develop its
capability of innovative leadership and mindful entrepreneurship. This can help the
organization to improve its transactional, managerial, operational and creative
competencies. The company should also focus on the scale of its business operations
and approaches of management involved in the business transactions, supply chain
and marketing strategies in order to achieve better success.

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3. The innovation initiatives that can be pursued by Amazon to optimize it Design
Thinking process by focusing on development of talent within the organization. This
approach can help Amazon online o nurture and grow the right kinds of talents and
skills that can increase the pool of knowledge and ideas from which innovative an
creative ideas can emerge. This aspect of supporting the development of human
capital is therefore and important recommendation for Amazon Online.
4. In order to create and capture value from its innovative practices Amazon can
increase its focus on what the customers expect from its products ad addressing those
requirements effectively. This can also be supported by providing products and
services at a more competitive price with better quality and superior product life
(Liedtka 2015).
5. To ensure strategic alignment in order to address the trends in innovation, Amazon
Online should focus to reduce uncertainties in their design of products and ensure the
products are designed based on the allocated resources and capabilities of the
organization. It should also take into consideration the wicked problem faced by the
company and design products that are subservient to the solutions of those problems
(Ojasalo et al. 2015).

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Practice.
Chesbrough, H., Lettl, C. and Ritter, T., 2018. Value creation and value capture in open
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Dutta, S. and Folta, T.B., 2016. A comparison of the effect of angels and venture capitalists
on innovation and value creation. Journal of business venturing, 31(1), pp.39-54.
Filatro, A., Cavalcanti, C. C., and Muckenberger, E. 2017. Design Thinking and Online
Education.
Liedtka, J. 2013. Design Thinking: What it is and why it works. Retrieved from Design at
Darden, University of Virginia website: http://batten. squarespace.
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Liedtka, J., 2015. Perspective: Linking design thinking with innovation outcomes through
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938.
Liedtka, J., King, A., and Bennett, K. 2013. Solving problems with design thinking: Ten
stories of what works. Columbia University Press.
Martinez-Conesa, I., Soto-Acosta, P. and Carayannis, E.G., 2017. On the path towards open
innovation: Assessing the role of knowledge management capability and