MGMT1101 Research: Analysis of Amazon's Business Strategies

This report provides an analysis of Amazon's business and corporate strategies. It begins by outlining Amazon's mission and vision statements, highlighting its customer-centric approach and global reach. The report details Amazon's cost leadership business strategy and its corporate growth strategies, including market development, market penetration, and product development. It also identifies Amazon's target customer base and conducts a SWOT analysis, examining the company's strengths, weaknesses, opportunities, and threats. The analysis emphasizes Amazon's dominance as an online retailer, its efficient distribution system, and its diverse product categories, while also addressing challenges such as thin margins and competition. Desklib offers a wealth of similar resources for students.

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Contents
Introduction...........................................................................................................................................2
Mission statement of Amazon...............................................................................................................2
Business strategy of Amazon.................................................................................................................2
Corporate strategy of Amazon..............................................................................................................3
Customer base of Amazon.....................................................................................................................3
Vision of Amazon...................................................................................................................................3
SWOT analysis of Amazon.....................................................................................................................4
Conclusion.............................................................................................................................................5
References.............................................................................................................................................6

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Introduction
In recent time, Amazon is the World’s biggest online retailer which offers several
innovative and unique products or services (Martin, O’Neill, Gupta &Hanrahan, 2016). Due
to its wider and global reach in several countries, it is treated to be equivalent to Walmart.
Several opportunities are also available for the Amazon that is explained with the help of
SWOT analysis. By adopting several strategies and innovative technologies, it is contributing
to its mission statement. The cost leadership strategy is the major business strategy that is
followed by Amazon. Further, discussion is carried on the corporate strategy (Growth
strategy) of Amazon.
Mission statement of Amazon
The mission statement of Amazon contributes to the status of organization by
becoming thebiggest online retailer all over the globe. The mission statement of Amazon is to
strive order to offer the customer the best possible prices with variety of products and
services and utmost convenience (Gregory, 2019). Mainly, the three main characteristics
included in the corporate business statement of Amazon are lower prices, selection, and
utmost convenience. By selling the products in lower price, it properly fulfils the demand of
customers (Wirtz&Zeithaml, 2018).
Business strategy of Amazon
In its business strategy, it mainly focuses on the cost leadership strategy. The main
objective of Amazon is to deliver the maximum possible value to the customers in lower
price. Considering this strategy, Amazon has become the World’s biggest online retailer as
well as leader in online retailing. It is also essential to know that cost leadership also follows
the “law of diminishing return” in which organization are not able to tolerate the growth as
well rise profitability. Therefore, cost leadership strategy of Amazon depends on the seamless
experience of customers and it is also backed by providing huge discounts to customers
through express delivery, Amazon Prime Program, and elimination of shipping charges.
Besides this, adoption of innovative technology also drives their strategy. It helps in
leveraging the efficiency through internal resources as well as external drivers according to

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the need of business model. Amazon also put focus on the retailing line by looking upon the
problem of differentiation and higher dependence on cost leadership.
Corporate strategy of Amazon
In the corporate strategy of Amazon, various growth strategies are included. The first
growth strategy in Amazon is market development. It mainly uses market development in its
primary growth strategy (Smithson, 2017). It adds various countries to offer its several
services. Now, Amazon operates in several countries such as Canada, China, United
Kingdom, and India (Goolsbee&Klenow, 2018).Amazon treats every country a new market
as it provides several opportunities for growth. Marketing penetration is yet other growth
strategy included in the Amazon corporate strategy. Through this strategy, it generate high
revenue from those markets in which company operates. It also helps in creating the
competitive advantage for the company. This strategy was responsible for the rapid growth of
Amazon initially. At last, it applied product development in its business growth strategy
(Kantor &Streitfeld, 2015). In this strategy, it offers and develops the several new products
for gaining more revenue. This growth strategy of Amazon also increases the investment in
research and development that ensures the rapid development of product.
Customer base of Amazon
The target customers of Amazon are those people who have easy access to the internet
and those having financial paying tools such as debit card, credit card, or PayPal. Besides
Canada, Amazon has also reached to several other countries through its online channel
(Armstrong, Kotler, Buchwitz, Trifts&Gaudet, 2015).In addition to this, Amazon’s Prime
programs seem to be more for the older shoppers than the younger people because the
research shows that people with age of 40 or more are likely to loyal than the younger age
people. It approximately operates in more than 100 countries all over the World. Besides this,
it has targeted the audience form urban as well as rural areas. It believes that middle, lower as
well as high-class people are required to be included in the customer segment for gaining
competitive advantage.
Vision of Amazon
The corporate vision of Amazon is to be World’s most customer centric company
where it becomes easy for all customers to find or purchase anything that they want to

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purchase. This statement clearly shows that Amazon main objective is to be the best E-
commerce company of the World. Customer-centric approach, global reach, and wider range
of products are some of the component included in its vision statement (Grant & Jordan,
2015).The global reach component of vision statement is about the better leadership in the
online market. As compare to this, customer centric approach is about considering the
customers an essential stakeholder in the workplace. At last, wider selection of products is to
provide the wide variety of products from which customers can choose and buy.
SWOT analysis of Amazon
Strength
 The main strength of Amazon is that it is the World’s largest retailer and its reputation
has helped it to enter in the new markets.
 By using superior distribution system and logistics, it is able to meet the demand of
customers in effective way. It also helps the Amazon to get various competitive
advantages as compare to its rivals (Lev, 2017).
 By building its early success with book, it recently has several product categories
such as electronics, games, toys, white goods, home and kitchen and many more. It is
now evolved as global E-commerce platform in the global market.
Weaknesses
 It is true that Amazon offers the free shipping to many customers that put the
company in danger by losing its margin. Due to this, it might not be able to augment
on the cost due to this strategy.
 In many developing nation, Amazon is still making struggles to make the business
profitability. Therefore, it affects the overall profitability of group that further results
into the debt (Barry&Jilla, 2016).
 The biggest weakness of is that it mainly operates in the zero margin business model.
Due to this, even if company has high revenue and high volume, it is not translated
into meaningful profit.
 The products that are made by Amazon have not get the huge success like Alexa or
Kindle. It is because technological development is happening at a higher pace.
Opportunities

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 It can role out many products in its brand instead of being an advancing site for the
products of third party.
 It can also open many sites in the growing and emerging market. This will generate
the more revenue in the firm.
Threats
 The main threat that lies with Amazon is that due to increase in concern of the online
market, theft problem can be arise due to problem of hacking that can leave the
consumer data exposed. It is therefore required by the Amazon to ensure the privacy
of online market.
 In recent time, competition is increasing at a greater pace that puts the threat to
Amazon. Therefore, it can remove threats by adoption of several strategies.
Conclusion
In the limelight of above discussion, it can be concluded that Amazon is one of the
leading online retailer of the World. By adopting several strategies in its Company, it is able
to provide best possible services at lower cost to the customers. It is also able to grow in
several markets through the adoption of growth strategies. The major vision of the Company
is to follow the customer centric approach and offer the best possible products.

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References
Armstrong, G., Kotler, P., Buchwitz, L. A., Trifts, V., &Gaudet, D. (2015). Marketing: an
introduction. United Kingdom: Routledge.
Barry, K., &Jilla, A. (2016).Project Amazon. AUDIOLOGY, 28(3), 42.
Goolsbee, A. D., &Klenow, P. J. (2018). Internet rising, prices falling: Measuring inflation in
a world of e-commerce. In AEA Papers and Proceedings (Vol. 108, pp. 488-92).
Grant, R. M., & Jordan, J. J. (2015). Foundations of strategy.John Wiley & Sons.
Gregory, L. (2019). Amazon.com mission statement.Retrieved from:
http://panmore.com/amazon-com-inc-vision-statement-mission-statement-analysis
Kantor, J., &Streitfeld, D. (2015). Inside Amazon: Wrestling big ideas in a bruising
workplace. New York Times, 15, 74-80.
Lev, B. (2017).Evaluating Sustainable Competitive Advantage. Journal of Applied Corporate
Finance, 29(2), 70-75.
Martin, D., O’Neill, J., Gupta, N., &Hanrahan, B. V. (2016).Turking in a global labour
market. Computer Supported Cooperative Work (CSCW), 25(1), 39-77.
Smithson, N. (2017). Amazon.com intensive growth strategies.Retrieved from:
http://panmore.com/amazon-com-inc-generic-strategy-intensive-growth-strategies
Wirtz, J., &Zeithaml, V. (2018).Cost-effective service excellence. Journal of the Academy of
Marketing Science, 46(1), 59-80.