Amazon's Strategic Management: Performance and Competitive Advantage

This report provides a comprehensive strategic analysis of Amazon, examining its current performance, competitive strengths, and market position. The analysis includes an assessment of Amazon's value chain and identifies areas for improvement, such as better automation and technical infrastructure enhancements. The report also discusses Amazon's strategic plan, utilizing the Ansoff matrix to evaluate market development, product development, market penetration, and diversification strategies. Justification for the chosen strategies is provided, emphasizing diversification as the most suitable approach for Amazon's global expansion and sustained competitive advantage. The report concludes with a reflection on the skills and knowledge gained from the module, highlighting the practical application of strategic management principles and their relevance to professional development. The report emphasizes the importance of strategic planning and its impact on organizational growth and success.

Strategic Management

Table of Contents
INTRODUCTION...........................................................................................................................3
Main Body ......................................................................................................................................3
TASK 1............................................................................................................................................3
Analyse current performance of selected company along with competitive strengthen, market
position and also analyse the requirements of improvements in value chain ............................3
TASK 2............................................................................................................................................4
Discuss strategic plan with the help of appropriate strategic tool along with justification.........4
TASK 3............................................................................................................................................7
Reflection of learning from module ...........................................................................................7
CONCLUSION................................................................................................................................8
REFRENCES...................................................................................................................................9

INTRODUCTION
Strategic management is a crucial area that helps to develop several plans & policies for
development of organisation (Cabrilo and Dahms, 2018). Here, a complete process is followed
by managers such as planning, monitoring, analyse and evaluation in order to develop an
appropriate strategy. The current report renders an overall prospective about strategic
management of Amazon. Here, strengths and current market position of company is also
discussed in present report. In addition, it also give a prospective about market position of
organisation along with the areas it needs improvement. Further, it also comprises a detail
strategic plan that is essential to get competitive advantage. Lastly, a reflection related to skills
and potential which have been developed through module also discussed in the present report.
Main Body
TASK 1
Analyse current performance of selected company along with competitive strengthen, market
position and also analyse the requirements of improvements in value chain
It is analysed that Amazon is working at large level in different countries and able to
meet with the needs & requirements of buyers in better manner. There are certain points which
differentiate organisation at market place that are given as under:
Competitive strength: As per the current trend, it is essential for an organisation to adopt
appropriate strategies, tools that will provide competitive advantage. In context of Amazon, the
major strength of organisation is its lower cost strategy (Crawshaw, Budhwar and Davis, 2020).
They offer wide range of products at minimum possible price which provides competitive edge
to sustain at market place for longer run. In addition, it has effective logistic management system
which makes them enable to cater the needs of target audience in minimum period of time. Here,
organisation also uses effective techniques to provide better experience to customers. In USA, it
provides drone delivery to provide products to end used in minimum possible time. These all
strategies will strengthen positioning of brand at market place which will further provide it
higher competitive edge over rival firms.
Market position: Here, market position of Amazon is really strong as customers have
great trust over organisation and they are also loyal towards brand. It is analysed that as per
recent study company is consider as a market leader in e-commerce industry. It acquires almost

50 % of total retail sales in United States. In online shopping, company has become the first
choice of customers globally. They perceive the brand as a low cost provider, comprehensive
selection and more. Therefore, company has strong market position which will make it enable to
earn higher profit margin in upcoming years.
Improvements in value chain
Value chain refers to the way by which company offers products and services to end
users with an aim to create value. Here, an efficient value chain system is used by Amazon
which makes it enable to meet with needs of customers in timely manner (Hao, 2017). They use
an effective combination of several business functions such as operations, technology, finance,
marketing in order to provide products to end users in minimum possible time. Nevertheless,
they are required to undertake some improvements to make it more effective. These are given as
under:
Better Automation: It is analysed that automation is an essential part of overall supply
chain management of an organisation. In context of Amazon, they are required to use effective
practices such as state of art machines, robotics and more to execute shipping supply in more
better manner.
Improve technical infrastructure: In this regard, Amazon owns AWS that is largest
cloud computing service at global level. Sometime, company's technological infrastructure gets
overburdened due to huge traffic thus generate problems in the execution of orders in timely
manner. So, it need to require to make necessary improvements in technical infrastructure in
order to provide better and timely services to buyers.
From the above discussion, it is analysed that Amazon acquires higher market share in
global e-commerce industry and also getting competitive advantage with its effective strategies
and constant innovations (Kalnins, 2018). In addition, there are some improvements are also
required to address by organisation in order to make it supply chain more effective.
TASK 2
Discuss strategic plan with the help of appropriate strategic tool along with justification
It is monitored that Amazon is a e-commerce giant that has been expand business in different
countries at global level. Mission, vision of company are discussed as under:

Mission: The mission of Amazon is to become biggest customers centric company at
global level. It also aims to enhance customer's experience with the use of advance technology
and help them to find and buy anything from a single place.
Vision: Vision of Amazon is to become world's largest online retailer by providing
quality products to customers at their convenient place. They aim to meet with the needs and
requirements of buyers in an effective manner & provide them a single platform to purchase all
necessities. In addition, they aim to provide quality goods to consumers at minimum possible
price.
There are several strategies are used by company with an aim to increase existing
customer base that is essential to achieve higher revenue & profit margin. For this, strategic tool
is used by managers that will help to prepare appropriate plans for future growth (Kelley and
Thams, 2019). Here, Ansoff matrix is a tool which is used by organisation so that they can
expand business in order to earn more profit. It is a tool in which several strategies are prepared
with an aim to enlarge present business operations. Here, modifications are undertake in terms of
market, product and both. In reference of Amazon, Ansoff matrix is discussed as under:
Market Development: In this, managers introduce existing product in new market among
new audience. It is an effective way by which an organisation can expand business and earn
higher profit margin in minimum investment. For this, they are required to analyse several
factors such as buying habits of customers, purchasing power, their attribute, personality and
other factors which will eventually help to select an appropriate target segment. In case of
Amazon, they engage in extensive market development. Primarily, company was working in US
but expanded business overtime. Now, they have presence in nearly 13 countries such as China,
UK and more (Kim, Kim and Qian, 2018). It is analysed that organization is also looking
forward to expand business in other countries too that will provide an opportunity to target new
audience. In addition, they are also targeting to all age group people whether young or old by
providing ease to place order in minimum possible time. With this, they are able to generate huge
profit margin which is significant to sustain at competitive market place for longer run.
Product development: Here, new product and services are launched among existing
customer group. It helps managers to inflate sales & profit margin. It is consider as a better way
to retain existing buyers by providing them more varieties of product. Customers can easily
accept new product and services as they are already aware with brand image of company. On

other side, it may also change existing positioning of organisation at market place. Managers
need to undertake appropriate market research before developing a new product. This will help
them to analyse that new product will be accept by existing buyers or not. In reference of
Amazon, managers emphasis to launch new product with an aim to attract more number of
consumers. It is analysed that company was started to sale books at online platform and now they
are selling a range of products which are required by customers (Lan, 2016) . They emphasis to
provide all necessary products at one place in order to provide ease to buyers. Organisation has a
large portfolio of goods which comprises clothes, jewellery, electronic appliances and more.
Recently, it has also started to provide groceries online that is essential to attract more number of
consumers. Now, company has been diversify in different fields such as entertainment, financial
services and more. They have launched Amazon Pay, Amazon prime with an aim to cater the
needs of target audience. Therefore, organisation is able to enhance their existing customer base
which will further lead it towards higher growth and success.
Market Penetration: In this, company work with existing product at existing market
place. There is no modifications are undertake in terms of products and market. It is consider as
an effective strategy to explore business in lower cost. Under this, managers prepare several
plans such as attractive marketing and pricing strategy to grab the attention of end user (Menon,
2018). Main aim of organisation is to gain competitive advantage with suitable strategies so that
they can sustain at market place for longer run. In case of Amazon, managers emphasis to
provide personalized experience to customers by sending them greetings & customized messages
with the help of advance techniques. In addition, they also provide feature to buyers to provide
necessary recommendations in order to make improvements. Further, they also provide discount
offers & extra benefits to loyal buyers that is essential to create difference. With all these
strategies organisation is able to accomplish predefined goals in stipulated period of time.
Diversification: Under this strategy, new product and service are launches in new market
place which has not been targeted by company yet. It is consider as the most risky strategy to
explore business as both products and market are new. However, it provides a great opportunity
to managers to enlarge business operations that will generate higher profit margin. It can be done
in related or unrelated fields. Diversification in unrelated field is risky as it may change existing
image of brand at market place. Due to diversification, Amazon operates in several fields such as
media, transportation, advertisement and more. It is analysed that company was started as book

selling platform and now is working in nearly 14 categories. Therefore, they are able to diversify
business with different product range in order to sustain at new market place.
Justification:
It is analysed that from above stated strategies diversification is most suitable strategy for
Amazon as it will make organisation enable to meet with the needs & requirements of customers
at global level. Working in diversify field will help organisation to explore business & sustain at
market place for longer period of time. However, it requires huge investment but also provides
ample of opportunities to enlarge business that is crucial from the point of view of future growth
& success.
TASK 3
Reflection of learning from module
I have learned several skills and abilities during module that will help me to explore in
professional career. With this, I will be able to develop appropriate strategies, policies to ensure
future growth of company. It will provide me great help at time of job where I have to perform
several business activities in an efficient manner. It is analysed that Amazon is using effective
strategies such as product development, diversification and more that will provide benefit to
organisation by enhancing its current sales & profit margin. I also monitored that there are
numerous other strategies also used by company in order to improver their market position. I6t
can be said that this module gave me a detailed prospective about strategic management and their
implication which will help me to perform better at work place.

CONCLUSION
With above discussion, it is analysed that strategic management consider as an essential part of
an organisation which is carried out with an aim to formulate effective plans. It can be concluded
that there are several different strategies are used by organisation to strengthen their market
position and gain competitive advantage. Discussion has been carried out about strategic tool
such as Ansoff matrix which play vital role to enlarge business operations. Therefore, strategic
management is a crucial function that is undertake to accomplish predefined goals.

REFRENCES
Books and Journals
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Crawshaw, J., Budhwar, P. and Davis, A. eds., 2020. Human resource management: Strategic
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Hao, M., 2017. Strategic Management in 50 Years: Development Context and Dominant
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Kalnins, A., 2018. Multicollinearity: How common factors cause Type 1 errors in multivariate
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