Holmes Institute: Amazon Kindle Fire & Strategic Model Application

This case study examines Amazon's strategic approach with the Kindle Fire, focusing on its target market, competitive landscape, and implemented business strategies. The analysis includes the application of various strategy models to understand Amazon's competitive advantage and market positioning. The case study highlights Amazon's efforts to boost Kindle Fire sales through strategies like Amazon Prime subscriptions and access to various media content. It also explores the competitive dynamics, including the threat of new entrants and substitute goods. Furthermore, the study discusses Amazon's corporate strategy, including pricing and the importance of a connected e-retail ecosystem. Management theories such as profit maximization, survival-based theory, and resource-based theory are applied to explain Amazon's approach. The acquisition and distribution strategies, international expansion, and cooperative strategies like partnerships with Walmart are also examined. Finally, the case study touches on the sustainability aspects of the Kindle Fire as a reading tool. Desklib offers similar case studies and solved assignments for students.

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Application of Strategy Models
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Application of Strategy Models 2
Executive summary
Amazon is a successful company, and it has the goal of innovating products that will
enable them to make sales on the commodities available at their stores. With the launch
of Amazon Kindle Fire the consumers of the tablet with getting the opportunity to
entertain themselves with the various games, TV channels, music and magazines.
The product targets three consumer segments, the readers, media consumers including
music and movies and the travellers. Although Amazon Kindle Fire is a good
commodity, it still faces competition in the market. With the competition, the product
only has a small share in the market. Amazon has some strategies in place to boost the
sales of Kindle Fire which will enable them to earn profits as an organisation.

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Table of Contents
Introduction....................................................................................................................................4
Summary of the case study.....................................................................................................4
Business strategy..........................................................................................................................4
Competitive dynamics..............................................................................................................5
Corporate Strategy....................................................................................................................5
Strategy management theory......................................................................................................5
Acquisitions and Structure...........................................................................................................6
International Strategy...................................................................................................................6
Cooperative Strategy....................................................................................................................7
Sustainability..............................................................................................................................7
Conclusion.......................................................................................................................................7
References.....................................................................................................................................8

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Introduction
Summary of the case study
The case study is about how Amazon introduced the Kindle Fire tablet to the market
and how the product has been since its launch. The product has three target segments
which target the users who love reading, the gamers and those who love entertainment.
The tablet faces competition from other firms including the Apple, and Nook and this
organisation has a share in the marketing which affects the sales of their commodities.
Kindle Fire has an absolute advantage over their rivals as they offer distinguished
services. The owners of the tablet get the opportunity of viewing their favorite channel
for a month for free as a result of purchasing the commodity. Amazon entertains the
users if Kindle Fire by the subscription they have. The tablet also helps their users to
purchase and download books that they can read, and it is specifically designed for
reading. Amazon has been constantly reducing the prices of Kindle Fire since its
launch. The reduction of the prices is done to attract the sales of the products. The firm
also relies on the subscription of the TV shows to drive the sales up, and this led them
to reduce the prices of the tablet.
The case study also shows how Jeff Bezos has been influential in the growth of
Amazon and how his attributes led to the innovation of the product. Jeff Bezos is an
influential man, and through his innovation, his firm has enabled the company to make
some huge amounts of profits. Bezos is a risk taker, and this has led him to innovate the
product when there were only a few products in the market.
Business strategy
Amazon came up with strategies to ensure that the Kindle Fire will attract more sales.
Some of the strategies implemented is giving a one-month subscription to Amazon
prime in a bid to encourage the customer to integrate with the ecosystem content of
Amazon. Amazon prime is exiting source of entertainment, and the buyers of the Kindle
Fire are guaranteed with one-month free subscription should they make the purchase.
The other strategy used by Amazon Kindle Fire is that the tablet has access to the
various TV show, movies, magazine and music and this can either be streamed or
downloaded. One a consumer purchases the tablet; then they get the opportunity to
enjoy these features. The prime subscribers can access up to 13,000 movies for free.
The other strategy to attract more sales of the tablet is that the Amazon Kindle Fire has
multiple pre-approved applications and games both for downloads and purchase. One
a user purchases the tablet then they can enjoy multiple games, movies and TV shows.
Amazon Kindle Fire offers its users an efficient e-reader, and this gives them an edge
over their rivals. With the feature, the tablet will be in a position to attract more sales
especially from the people who love reading. Amazon is aiming to revolutionize reading
through the tablet, and the feature will help the users purchase and download their
favorite book and thereby, from the niche they can make sales which will generate profit
for the organisation.

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Competitive dynamics
There is a threat for new entries of firms who will venture in the tablet industry. With the
entry of new firms, the competition for Amazon Kindle Fire is expected to rise. After the
launch of Kindle Fire, Barnes & Noble implemented the idea, and they came up with
their product named Nook. Other companies also came up with similar products.
Amazon Kindle Fire also has substitute goods where the consumer can choose other
products other than the one produced by them. The substitute goods offer similar
tablets to the Amazon Kindle Fire, and thus the consumer will choose the product that
will best suit their needs. The consumer can forgo Amazon Kindle Fire, and this will
deter their sales.
The consumers get the opportunity to choose from the wide array of similar products.
With more substitute goods, the consumer gets to choose the cheapest products in the
market. With the consumer’s ability to choose the cheapest commodities in the market,
Amazon will be forced to lower the cost of the tablets hence minimizing the profit margin
for the organization.
Corporate Strategy
Amazon is willing to sell their tablet at a relatively lower price to encourage and boost
the sales of the tablet. The tablet is efficient in the sales of its connected e-retail
ecosystem. The profits of the tablet are not only generated from its sales but also
subscription of other services like books, movies and the TV shows. The strategy helps
the company to generate more profits from its services. Consumers prefer buying
products that are relatively cheap and with the low cost being charged the company is
able to attract sales.
Strategy management theory
One of the management theory includes the profit maximization theory which entails
that the objective of a business is to maximize profits in the long run (Morden, 2016).
Amazon tries to maximize its profits in the sales of the Kindle Fire. The tablet has a
feature where the customers of the product will get the opportunity to subscribe to some
of their favorite channels and magazines. Through the subscription, the organisation
can generate sales on top of the money generated from the sales of the tablets. The
consumers get the opportunity to watch and download their favorite shows, and this
makes them satisfied. Customer’s satisfaction is crucial for any business as they can
refer the products to their friends. With referrals, the organisation can make more sales
and get more subscribers to their services.
The survival-based theory states that the organisation need to adapt to the business
environment even though they might become competitive (Morden, 2016). Amazon had
to adapt and venture in the different market beside their online sales of other products.
Through the adaptations, the organisation has been able to generate sales of the
products. The company does identify the needs of the consumers, and when the
demand for the product is high, they can capitalize on it and supply the goods to the
market. Being able to adapt and capitalize on the needs of the consumers is crucial to
any business organisation. The resource-based theory states that the source of the
competitive advantage of a firm depends on the resources that an organisation owns

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(Morden, 2016). Amazon is a huge company and it has a load of capital, they can easily
invest in a research to know the best way they can produce a commodity. The company
is capable of investing in a large array of commodities, and this gives them an edge
over other organizations. Having resources is vital since a company can expand its
business with ease hence enabling them to make more profit.
Agency theory states that there should be a mutual relationship between the
shareholders and the management to ensure that the operation of the management
runs smoothly (Rothaermel, 2015). With cooperation, the management will work
towards a common goal of helping the organisation realize profits. Both Amazon and its
management have mutual interest, and the management often communicate with the
shareholders to ensure they work towards the same goal. Mutual relationship implies
that the managers have the specific information about the needs of the shareholders
and the efficiently communicate to ensure that they give them the feedback of the
progress of the goal they are aiming for.
The human resource-based theory emphasizes the importance of the human element in
the success of the organisation (Rothaermel, 2015). Human element is essential in
Amazon; they play a crucial role in distributing products to the market. They also play a
crucial role in the production of the tablets. In the human organisation element also
plays a crucial role in the sales of the commodities and giving feedback to the clients.
With good feedback, the company can communicate with its clients well to answer their
queries. The human resource plays a crucial role in ensuring the consumers are
satisfied with the services they get.
Acquisitions and Structure
The acquisition of Amazon Kindle Fire is done through the online platform and the
distribution via stores. The products are mainly displayed online where buyers of the
products get the opportunity to check the product before placing an order. After placing
the order, the product will be transported to the nearest store where the consumer will
have the opportunity of collecting the product they ordered. As the firm has gone into
the international market, the products are being displayed at the stores where the
potential buyers can purchase the product.
International Strategy
Kindle Fire is available to consumers through the retailers and the website stores.
Through their website, potential buyers get the opportunity to buy the check the prices
of the product as well as the feature provided. When they are pleased they can place an
order and their product will be delivered. Amazon Kindle Fire can be delivered
internationally days after the order was placed. The organisation is trusted by its
customers, and this enables them to purchase as they are confident that their product
will be delivered.
The distribution of Kindle Fire is cost-effective as its products are offered at a
discounted rate in stores like Walmart. The stores help the organisation make sales of
their commodities in other countries hence making Amazon make more sales of the
tablets. The stores are also efficient in foreign countries since they act as the delivery
point when the customer has placed an order.

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Cooperative Strategy
The cooperative strategy is a situation where two or more companies work towards a
common goal. Amazon and Walmart do work together to ensure that they sell Kindle
Fire. With the sale of the commodity, both organizations can be able to make profits as
a result of the sales.
Sustainability
As a reading tool, the tablet is sustainable as it conserves the environment. The
production of the tablet emits fewer carbon gases to the environment compared to the
production of books which emits more carbon gases into the atmosphere. The
production of books also includes the use of wood which is achieved by cutting down
the trees. Deforestation is harmful to the environment and having a tablet as a reading
tool is far better than actually reading the book.
Conclusion
Amazon effectively implemented strategies that enabled them to earn revenue from the
sales of Kindle Fire. Although there are competitors in the market, Amazon developed a
niche which helped them gain an absolute advantage over their rivals, and this boosted
the sales of their commodities.

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