Marketing Case Study: Amazon's Strategies for Distribution and Pricing

This case study analyzes Amazon's remarkable success in the global market, focusing on its effective distribution strategies, competitive pricing model, and approach to differentiation and positioning. The paper explores how Amazon's focus on customer needs, leveraging technology, and strategic alliances have optimized its distribution network. It examines the competitive pricing strategy, including repricing techniques, and its effectiveness compared to rivals. The study further investigates how Amazon uses differentiation and positioning to maintain a competitive edge in the online retail market. Finally, it offers recommendations for Amazon's continued growth, including expanding into developing countries and enhancing IT security, to secure its leadership in the face of challenges from competitors and a dynamic business environment. The conclusion emphasizes Amazon's leadership due to its strategic implementation of the above mentioned strategies.

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Introduction
The advancement of technology and development of new technologies in the global
environment have increased the pace of competition prevailing in the global marketing.
Amazon today is considered to be one of the biggest retail giant in the world and a market
leader in the digital retail organization. The business organization has been highly effective in
managing in business (Shevchenko, 2020). The purpose of this essay is to determine the ways
in which Amazon succeeded in respect to the distribution. The essay will state the pricing
model implemented by Amazon and its effectiveness as compared to the competitors. It
discusses and analyzes the ways in Amazon can use differentiation and positioning of two
main components in order to maintain its competitiveness. Further it analyzes the changes
and recommends ways to grow its business.
Analysis and discussion
Ways in which Amazon succeeded in respect to distribution
One of the most aspects of effective distribution chain is proper planning. Amazon’s
core focus on the needs and demands of the customers has enabled the organization to stand
out among other competitors in the market (Chorna et al., 2016). The business organization
has extensive ability to assess the needs and demands of the consumers and provide them to
the customers. The business organization has also taken advantage of the advancement of
technology (Onyusheva & Seenalasataporn, 2018). It has effectively implemented ‘Internet of
Things’ to change the distribution and operations of the business thereby ensuring greater
customer satisfaction and enjoyable shopping experience. The company has tactfully formed
alliance with the publishing house and the wholesalers; this has enabled the organization to
reduce the warehousing costs and offers huge discounts. The lead time for delivery of
Amazon is 4-7 business days. The overall idea was to “Get bug fast (Onyusheva &

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Seenalasataporn, 2018)”. Gradually the business diversified its product portfolio as well as
geographic expansion by establishing various distribution centers throughout the globe
(Anderson, 2019). This made Amazon succeed while other companies failed.
Pricing model of Amazon and its effectiveness as compared to other competitors
The pricing strategy of the business organization is simple. The business organization
implements a competitive pricing model. As per the competitive pricing policy, the business
organization considers the price of the competitors to set the prices of their own goods and
services (Anderson, 2019). Amazon conducts a detailed market analysis to establish the right
price for the product. This is one of the most important factors contributing to high amount of
sales and customers purchasing decision over other competitors in the market. The concept of
competitive pricing policy in Amazon is simple, the goal is to increase the sales and increase
the profitability of the business organization (Canter & Gomez, 2017). The business
organization undercuts the competitors through reprising. This involves changing the price
manual of the products through Amazon seller central. This is done through various tools
such as Xsellco, RepriceIt and RepricerExpress to undercut the competitors. They set a
minimum price at which the products are to be sold (Zhu & Liu, 2018). This pricing strategy
is highly effective as compared to other competitors.
Differentiation and positioning of Amazon as competitive advantage
Amazon has completely changed the way in which people shop and brought evolution
through its virtual shopping experience (Chorna et al., 2016). The business organization has
achieved high success in the past few years and today it is leading the online retail market. In
order to maintain its competitive advantage, the business organization has implemented two
main components positioning and differentiation (Zhu & Liu, 2018). One of the most
important ways to attain sustainability in its competitive advantage is to position the brand.

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Amazon established itself as a leader in the online retail market by creating new category of
products and services which differentiated itself from other competitors in the market (Zhu &
Liu, 2018). Moreover, Amazon focused on niche market and makes its products distinctive
and dominative in that particular niche market. By effectively segmenting its market, the
business organization has been able to focus greatly on the needs and demands of the
customers and this enabled the business organization to position itself as a leader in the
global market (Zhu & Liu, 2018). Furthermore, the value proposition of the business
organization enables the business organization to provide greater value to the consumers by
instant access, wider range of selection, convenience and trustworthiness.
Recommendations to grow its business
Amazon Inc. continues to secure a top position in online retail market despite stiff
competition in the market especially with the presence of other dominant players like
Walmart (Chorna et al., 2016). However, considering the macro and micro environment of
Amazon, it is likely to face various challenges and opportunities. These issues are critical for
the success and position of the business organization. With rapid economic development and
high growth potential of e-commerce industry, it is recommended to expand its operations
into other developing countries (Chorna et al., 2016). There are IT security issues that can be
faced by the organization, in the world of digitalization. It is recommended to enhance its
current strategies and integrity. Considering the challenges faced from the external business
environment, it is essential for the business organization to continue to maintain consumer
confidence and stability (Zamudio & Jewell, 2018). The business organization must take
necessary steps to boost the strength of the brand and ensure its sustainability in the global
market through corporate social responsibility and address the present issues to cope up with
the natural business environment. The advancement of technology is an opportunity for the
business to ensure further growth.

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Conclusion
Therefore, from the above analysis, it can be concluded that Amazon has gained a
leadership position in the global market due to its effective strategies such as competitive
pricing policy, reprising systems, positioning strategies and differentiating its business from
other competitors in the market. The business organization focuses mainly on the needs and
requirements of the consumers. This has enabled the business organization to gain a position
in the global market.

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