Strategic Management Report: Amazon Inc.'s Strategies and Analysis

This report provides a comprehensive analysis of Amazon Inc.'s strategic management, examining its growth from an online bookstore to a global e-commerce leader. It evaluates Amazon's strategies over the past five years, including its expansion into various sectors like robotics, drones, and cloud technology. The report utilizes frameworks such as PESTEL and Value Chain analysis to assess the company's competitive position and internal strengths. It also discusses Amazon's vision, mission, strategic capabilities, and market entry strategies. Furthermore, the report explores strategies for defending its core business, emphasizing customer service and website usability. The conclusion offers recommendations for enhancing organizational performance and addressing future challenges and opportunities. This student-contributed document is available on Desklib, a platform offering AI-based study tools and resources.

Running Head: Strategic Management
Amazon Inc.
Strategic Management

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Table of Contents
Introduction.............................................................................................................................................................. 2
Background of company.................................................................................................................................. 2
Task 1.......................................................................................................................................................................... 4
Strategic Direction............................................................................................................................................. 4
Task 2.......................................................................................................................................................................... 7
Frameworks for strategic analysis.............................................................................................................. 7
Competitive Advantage.................................................................................................................................... 8
Task 3........................................................................................................................................................................ 10
Vision and mission of Amazon................................................................................................................... 10
Strategic Capabilities...................................................................................................................................... 10
Expansion and market entry strategy..................................................................................................... 11
Task 4........................................................................................................................................................................ 12
Strategies for defending core business................................................................................................... 12
Excellent customer service...................................................................................................................... 12
Easy to use and responsive website.................................................................................................... 12
Understanding customers....................................................................................................................... 13
Task 5........................................................................................................................................................................ 14
Resource Implications................................................................................................................................... 14
Conclusion............................................................................................................................................................... 15
References............................................................................................................................................................... 16

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Introduction
Strategic management is the most crucial and essential function for business organizations
in terms of attaining desired goals and objectives. The role of strategic management is
increasing day-by-day as companies have started giving importance to the very first step of
the management function i.e. to planning in relevance with arranging the tasks in an
effective sequence through which productivity could be maximised along with maximising
the returns over investments made. Strategic management includes framing of strategies
for the business for the purpose of attainment of future goals as well as evaluating the
effectiveness of current strategies to align the future outcomes with the expected outcomes
(Szolnoki, Thach & Kolb, 2016).
Background of company
In consideration to the significance of strategic management, this report will focus on the
future strategies for Amazon Inc. in terms of enhancing organizational performance by
making their strategies flexible and effective enough to deal with different types of market
situations. Amazon is a giant e-commerce company with its headquarters in Seattle,
Washington. The company was founded in 1994 by Jeff Bezos and since then, organization
has acquired the leading position as the largest internet retailer in the world measured in
terms of market capitalisation and revenue. The company started its functionalities by
selling books and with the passing time, Jeff Bezos has evolved his strategies with the
objective of cope up with the changes as well as to gain competitive advantage (Amazon
Inc., 2018).
This report will determine the evaluation of strategies in Amazon in the last 5 years along
with analysing the type of industry including utilisation of appropriate strategic
frameworks. Further, report will include the discussion of company’s competitive position
in comparison to the primary competitors of the organization. The next phase of the report
will include analysis of organizational strategies with their mission and vision in relevance
with the demand and wants of the target market. Organizational strategic capabilities will
be discussed along with discussing the future strategies which could be adopted by the

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organization to gain future goals. Further, possible strategies will be discussed through
which the organization could be able to defend its core business in the global market and
the last part of the report will focus over recommendations for the objective of enhancing
the performance of the organization through which company would be able to address all
the challenges and opportunities for the objective of attaining desired goals.

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Task 1
Strategic Direction
Initially, Amazon.com was just an online bookstore which later on becomes the number
one online retailer across the globe. With the passing time, organization diversified their
product offering through which the organization could have been able to target other
customer segments. Today, organization sells millions of products and the company’s logo
also indicates the huge product and service offering of the organization. In relation to the
organizational success, growth and development, credit goes to Jeff Bezos, CEO and founder
of Amazon Inc. because with his unique thinking style and innovative behaviour,
organization would have been able to expand its business approximately in more than 80%
of the world with 12 registered offices in the worldwide locations (Grant, 2016). Jeff Bezos
always believed that innovation is the only aspect to sustain for longer run along with
retaining the interest of the target and potential customer segments. Thus, the major
objective of the organization has always been inclined towards the innovation and this is
not just limited to the top level management, organization has provided all the resources to
its employees which are required for thinking out of the box. Although, organization have
also faces several challenges and issues due to their wrong decisions but with the effective
strategies and effective decision making process, organization has been always been
managed to get over those challenges and issues very quickly (GreyB Services, 2018).
In the Fortune 500 list in 2017, Amazon ranked on the 12th position and in the same year,
organization also managed to acquire the position in the top ten companies by securing the
8th place and it is considered as the biggest achievement for the organization as it is the
best rank for Amazon since they have managed to set up their presence in the magazine
first time in 2002. The last five years for the organization have been tremendous as the
organization have been able to enhance their sales by 140% including whopping of $178
billion in 2017 from $74 billion in 2013. Along with this, organizational revenue also
increased by 31% in 2017 in comparison to the revenue in the previous year.

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(Source: GreyB.com, 2018)
Apart from this, Amazon has also expanded its operations in last five years which have
become one of the most effective decisions for the organizational sustainable growth and
overall development. Amazon has invested in different technology for improving their
services in order to enhance customer satisfaction. Amazon has made investments in
following sectors:
 Robotics
 Drones
 Alexa (virtual assistant)
 “Alexa Everywhere” Strategy
 Amazon Go
 Cloud Technology
 Prime Video and Prime Music (online entertainment)
Amongst these technologies and products, one of the best strategies for organizational
success and growth was launched in 2017 as “Amazon Everywhere” which surprisingly

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became the huge success for the organization despite the presence of other top personal
assistants in the market. Amazon launched Alexa in 2014 in smart speakers as Echo and
this made the organization to stand with its primary competitors in the artificial assistant
market. Google Home and Apple are the two biggest rivals of this industry and Apple has
also announced to soon introduce their virtual assistant Siri-enabled speakers as Homepod.
In order to gain competitive edge over these two competitors, organization announced to
launch Alexa (AI) in every echo devices along with numerous other new products in 2017.
Along with these products, organization announced to introduce two major Alexa
integrations for non-Echo devices and the organization also announced that Alexa will be
launched in the BMW cars from the beginning of the next year. These are some of the
effective strategic decisions taken by Amazon in last 5 years which have not just boosted
organizational revenues and profitability but it has also led the organization to expand
their functionalities in various other trending industries like web services, cloud storage,
artificial assistant, online entertainment, etc. which has also helped the organization to
build a massive brand image in the global market (Seeking Alpha, 2017).

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Task 2
Amazon Inc. is a mammoth player of e-commerce industry and it stands on the leading
position as the largest online retailer in the world. Company was founded in 1994 by Jeff
Bezos and its headquarters is situated in Seattle, Washington. From being an online
bookstore in the initial period to becoming the largest online retailer in the world, journey
of Amazon has been very interesting. There were various obstacles which degraded
organizational performance in this journey but with the effective strategies, organization
continuously moved towards their primary vision of becoming “the online store of
everything” (Columbus, 2018).
Frameworks for strategic analysis
Growth of e-commerce industry started with the introduction of internet and the
penetration of smartphone. Since, penetration of smartphones has been increased, demand
for mobile internet has been increased and this has ultimately generated opportunities for
the companies to expand their businesses over internet in order to expand their
reachability. Internet has been proven as the biggest factor for the companies who operate
on e-commerce platform. Amazon is one of the largest internet retailers in the world and
through e-commerce platform; organization has been able to establish its brand image in
the global market. Amazon operates in more than 188 countries which is approximately
80% of the world with 12 offices in different countries. In some countries where
organization is not yet present, they offer international shopping for some of their products
to set up their brand image in those locations also. Amazon has separate retail websites for
countries like United States, United Kingdom, France, Canada, China, Japan, India,
Singapore, Turkey, etc. (Cohan, 2018). Primary vision of organization is “to be the earth’s
most customer centric company” and with regards to this, organization uses number of
frameworks to design their strategies as well as evaluate the organizational performance in
the market with the objective of determining the scope of improvement. Following are
some of the frameworks used by Amazon for strategic analysis:
 PESTEL Analysis: for evaluating the impact of external factors over business

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 Value Chain: for analysing internal strengths of the organization in order to fulfil
target audiences’ demands and wants (CB Insights, 2018).
Both these methods are useful for the organization to evaluate organizational performance
along with determining the impact of internal as well as external factors through which
relevant strategies could be designed for the objective of enhancing organizational
performance as well as to match up with the latest trends, customers’ requirements and
competitive conditions in the market. Apart from this, these analyses are also useful in
evaluating the scope of entering into other countries with the objective of expansion
(Jenkins & Williamson, 2015). Ultimately, these analyses help the organization to develop
the new and innovative ways to move towards attainment of organizational vision as well
as to establish an effective brand image in the target market along with brand loyalty
amongst the target audience (CNBC, 2018).
Competitive Advantage
Amazon is one of the giant players of the e-commerce industry and as the market
conditions of e-commerce industry is oligopoly because there are only few names which
are operating at international level. With the passing time, Amazon has expanded its
functionalities and with regards to this, currently, organization is present in different
sectors and in all sectors, organization has multiple competitors. Majorly, organization
performs in three general segments i.e. media, other merchandise and electronics
(Bouncken, et. al., 2015).
In the media segment, organization competes with Netflix, eBay that is also known as
auction site, Time Warner Cable, iTunes, Apple, and Play store by Google. In this industry,
organization functions as Amazon Prime Video and Prime Music and as of 2017,
organization has become the second largest online entertainment platform in the world
(Segal, 2018).
In the electronics and other merchandise segment, organization has several competitors
and amongst them, most of the companies are brick and mortar retailers which performs
on the both platforms i.e. offline as well as online. Best Buy, Staples, Target, family Dollar,

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Walmart, SysteMacs, and Big Lots are some of the competitors which are major players of
brick and mortar retailers. The main competitors of Amazon in e-commerce industry are
Alibaba Group, Overstock.com, Vipshop Holdings, etc. In the other segment, organization
competes with some of the biggest companies of the world like CDW, PC Connection,
Oracle, Insight Enterprises, Accenture, Salesforce.com, etc. (Shaoolian, 2016). In relation to
this, Amazon has acquired the leading position in the online retailing industry in terms of
market capitalisation and revenues while it still stood on the second position in terms of
overall sales. For fiscal 2017, Amazon reported $161.15 billion in revenues; it had a market
capitalization of $885.22 billion as of July 16, 2018.

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Task 3
Vision and mission of Amazon
Amazon’s vision is “to be the earth’s most customer centric company” and with regards to
this, management monitor organizational performance at all locations to analyse whether
organization is moving in right direction or not. Jeff Bezos, CEO and founder of Amazon Inc.
has believed in innovation and being customer centric in order to sustain in the
competitive and dynamic business environment for longer period of time. Thus, he and his
team always seeks for all those strategies through which desired goals and objectives could
be attained along with the organization could be able to reach to its vision (Amazon Inc.,
2018).
In relation to this, Jeff Bezos and his team always try to upgrade its products and services in
relevance with the fulfilment of their target and potential customers’ demands and wants.
Along with this, organization always seeks for innovation and creativity for the objective of
enhancing their customer base, attracting new customer segments along with aligning the
demands of the marketplace (Ang, Benischke & Doh, 2015). As per the organizational
vision and mission, organization considers their target audiences’ demands and wants with
the objective of reaching towards their vision along with boosting up organizational
performance in the target market. Organizational innovative strategies are the major
contributors for enhancing organizational performance along with matching up with the
dynamic business requirements (Peppers & Rogers, 2016).
Strategic Capabilities
Amazon’s strategic capabilities stands on the three pillars i.e. price, selection and convince
and these elements are used by Amazon for the motive of fulfilling their customers’
demands and wants. Along with this, these pillars also act as the primary components for
enhancing customer experience with the organization. Apart from this, organization has
included innovation in their strategies for the objective of retaining their targeted
customers’ interest in the organization as well as in approaching to the new customer
segments. In relation with gaining competitive edge over its competitors as well as to

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retain their acquired position in the market, organization uses Porter’s Generic strategies
(West, Ford & Ibrahim, 2015). Cost leadership and product differentiation are the two
major strategies used by the Amazon to offer the unique products from its competitors and
that too at minimum prices for attracting customers. Therefore, strategy clock concept
states that Amazon’s generic strategy could be deemed as Hybrid Strategy which seeks to
attain differentiation and low price simultaneously related to its customers. Hybrid
strategies enable organizations to acquire big portion of the target market along with
boosting up the sales volumes.
Expansion and market entry strategy
In the global market, Amazon’s strategies are considered as the most effective and result
oriented. Various big multinational companies have also followed Amazon’s strategic
concept with the objective to expand their business in the international market along with
enhancing the market share for gaining competitive advantage. Primary strategy used by
Amazon for expanding their business in the international market is “GLOCAL” which
describes “go global think local”. For the objective of entering into new markets,
organization mainly consider joint venture or acquisition of small businesses of the same
industry in order to understand the type of market, conditions in the market, target
customers’ preference, demands, and for determining the competitive conditions in the
market with the objective of designing appropriate strategies. As a result, organization is
currently operating in more than 188 countries in the globe with separate retain websites
for countries like United States, India, United Kingdom, China, Japan, Turkey, etc. (Hill,
2017).