Amazon's Strategic Management Assignment Sample

Introduction To Strategic Management Assignment

Strategic management refers to the creation and implementation of plans intended to direct an organization toward achieving its aims & objectives. This complex procedure includes designing organizational structure as well as resource allocation, developing strategies, leading change efforts, supervising and controlling both resources & procedures. For this project, Amazon has been selected which involved in offering wide range of services including e-commerce, cloud computing and digital streaming. This extensive report's goal is to present a thorough examination of Amazon, the worldwide e-commerce as well as technological aspects that has greatly influenced the state of global industry. The present study will utilize strategic management strategies to assess both internal and external factors which impact Amazon. It also examines the business's worldwide plans, market entry methods as well as tactics for boosting its competitiveness abroad. It seeks to provide a thorough grasp of Amazon's dynamics as well as important insights into the company's sustained achievement in the worldwide marketplace via this methodical investigation.

1.1 Overview of Amazon Company

Jeff Bezos launched the worldwide technology as well as e-commerce behemoth Amazon in 1994. With its headquarters located in Seattle, Washington, Amazon has expanded to become one of the biggest and most varied corporations globally (West, 2019). It started as an online bookshop but has since grown into many other industries, providing an extensive variety of goods and services involving online streaming, AI, cloud computing, electronic commerce, and others. Amazon is a worldwide leader that has a big influence on technology, retail as well as the online world as a whole because of its dedication to customer-focused innovation and its widespread presence.

Application Of Strategic Management Process Models/Frameworks To Amazon

2.1 Company's goals, vision and mission

Amazon's vision is to become the worldwide leader in the field of e-commerce and technology. Further, company's mission is to be the “Earth's most customer-centric company” in line with the firm's strategic management approach. The firm's goals concentrate on expanding its market, innovating, and satisfying consumers. While its vision highlights the goal of leading the way in new business models as well as technology (Zwakman, 2021). Its mission centers on providing outstanding client experiences. To maximize productivity and preserve an edge over others in the quickly changing digital market, Amazon's strategy approach is centered on excellence in operation, customer focus, and thoughtful planning (Garnelo, et. al, 2020). The business's broad array of services and worldwide reach are influenced by this focused on-client mentality, which ingrained in its strategic aims.

2.1.1 External analysis

The achievement of Amazon is directly related to its strategic management approach, which uses frameworks including PESTLE to conduct a thorough external study.

• Political- Several nations, each with a unique political environment, are home to Amazon operations. In terms of taxation, e-commerce as well as data protection, the corporation has to manage a variety of rules and mandates (Amazon PESTEL Analysis, 2023). For business continuity and supply chain management, stable politics in these areas is essential.
• Economical- The way Amazon operates is greatly impacted by economic issues. The purchase habits of customers are directly impacted by changes in inflation, currency rates and economic development. The organization's worldwide presence subjects it to diverse economic conditions, necessitating flexible approaches to prosper in the face of economic volatility.
• Social- The products that Amazon offers and its marketing tactics are influenced by societal changes that impact customer behavior. Product as well as service demand is affected by changes in social conventions, cultural tastes and demography. Amazon is a socially sensitive company, as seen by its capacity to adjust to various shifts, including the increasing inclination for online purchasing.
• Technological- Being a leader in technology is essential to Amazon's approach. For better client experiences, boost operations and get an edge over competitors, the corporation makes significant investments in cutting-edge technologies such as AI, robots & information analytics (Alshmrani, 2021). Amazon's dedication to remaining at the forefront of the digital world is characterized by its constant technological breakthroughs and incorporation of novel solutions.
• Legal- Due to criticism over its labor practices, intellectual property, as well as antitrust policies, Amazon works in a complicated legal landscape. The organization must comply with the varied laws and regulations in different locations. To maintain its creative practices and guarantee compliance, the organization must proactively interact with regulatory agencies.
• Environmental- Sustainability is important and Amazon recognizes that. The business is investing in energy from renewable sources and sustainable packaging as part of its commitment to achieve net zero carbon emissions by 2040. It can reduce the risks related to resource shortages as well as climate shift while also being in line with international standards for business responsibility.

2.1.2 Internal analysis

Using the SWOT analysis, Amazon's internal study reveals its key strengths and opportunities for development.

Evaluate the Global Strategies Of Amazon

3.1 Business Strategy

Amazon places a high value on client-focused and ongoing innovation, emphasizing convenience, competitive pricing, and a large selection when it comes to purchasing. Important elements of Amazon's company strategy consist of. A key component of Amazon's business strategy is its unwavering emphasis on Client Obsession, which places a high value on knowing customers' demands comprehensively so that choices about services, products, and the user experience as a whole are made (Mazzone, 2020). This dedication is demonstrated by services including one-click shopping, tailored suggestions and exclusive advantages available to Prime members. The business's E-Commerce dominance approach started with internet bookselling but quickly developed into a full-fledged e-commerce venue, leveraging price competition, a wide choice of products, and effective delivery methods to dominate several categories of goods in the field of online retailing. By giving third-party merchants access to a large client base, the Marketplace Model broadens Amazon's reach and creates a win-win scenario for all parties involved (Pereira, et. al, 2023). With constant investments in modern technologies like Alexa, Amazon Web Services (AWS) as well as robotics in fulfillment centers, Amazon's strategy places a strong emphasis on technology and innovation. These advancements improve consumer experiences as well as operational effectiveness.

3.2 Corporate strategy

Amazon's corporate strategy is an integrated strategy for handling a variety of activities, extending beyond the boundaries of specific business divisions. Among the principal facets of its corporate tactic are: Growing beyond its online shopping beginnings, diversification is a key component of Amazon's strategic strategy (Rikap, 2022). Its entry into the grocery market came with the acquisition of Whole Foods, as well as its efforts to expand its income sources are demonstrated by its forays into cloud computing (AWS), Streaming Services (Amazon Prime Video), and hardware (Amazon Echo). The fact that Amazon owns and manages different parts of its supply chain, from creating gadgets like the Kindle to running fulfillment centers and branching out into logistics with projects such as Amazon Air highlights the importance of vertical integration. Control, efficacy, as well as cost-effectiveness are all improved by this combination (Walker, et. al, 2020). Furthermore, Amazon's commitment to future development is demonstrated by its preference for longevity above immediate financial gain. Large expenditures on infrastructure, technology, and global growth demonstrate a readiness to tolerate reduced profit margins in anticipation of the long-term advantages of these calculated actions.

3.3 Global strategy

Proactively entering and growing in foreign countries is a key component of Amazon's worldwide strategy. What makes this tactic unique is: With operations in several nations and services tailored to local markets, Amazon's global growth strategy is characterized by a worldwide presence. Purchasing local e-commerce sites, such as Souq in the Middle East, demonstrates Amazon's commitment to comprehending and meeting a wide range of customer demands around the world (Pananond, 2020). A key component of localization is striking a balance between a worldwide brand and customized offerings that take local linguistic quirks, legal needs, and cultural tastes into account. This strategy promotes Amazon's growth in new areas while improving customer experiences. The efficiency of Amazon's global expansion is dependent on its international supply chain administration, which places data centers, fulfillment centers, and distribution centers in key locations across the globe to reduce delivery times and improve logistics. A key factor in Amazon's worldwide achievement is its effective international supply chain administration. Furthermore, by enabling international e-commerce, Amazon expands the range of items available, gives vendors access to a worldwide consumer base, and lets buyers buy goods from other nations. The business's dedication to addressing logistical obstacles in international electronic commerce is demonstrated by efforts including Amazon Global Selling.

Though they aren't without criticism, Amazon's worldwide initiatives have helped it rise to the top of the global commercial scene. Positively, Amazon's customer-first approach to business has made online buying smooth and loyal customers all over the world. Amazon is positioned as a technical leader thanks to its concentration on innovation as well as technology, which is shown in services including AWS as well as items like Alexa. Its business strategy, which is characterized by vertical integration as well as diversity, promotes resilience and long-term growth (Brodie, 2022). Nevertheless, there are objections. Amazon's aggressive price practices were accused of hurting competition as well as squeezing suppliers, despite being user-friendly. Because of the business's dominance, legal examination is warranted due to worries about problems with antitrust. Furthermore, issues about fake goods on its market came to light. Regarding the worldwide approach, Amazon's explosive growth has encountered challenges in adjusting to regional laws and cultural quirks, resulting in sporadic failures in certain foreign regions. One of the continuous challenges for Amazon's worldwide initiatives is striking a balance between expansion and local norms while also promoting equal rivalry. Notwithstanding these difficulties, Amazon continues to innovate and adapt, which highlights its lasting impact on the global commercial scene.

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Entry Strategies In International Markets

To expand internationally, Amazon uses a variety of entrance techniques, which reflects its flexibility in a wide range of areas. The legislative frameworks, cultural variances as well as complexity of each location all influence these techniques. An examination of the entrance tactics used by Amazon to expand internationally is provided below:

Launch of an E-commerce Platform- Usually, when Amazon enters a foreign country, it launches its e-commerce site there first. This strategy makes use of its proven internet marketplace concept, making entrance easy and scalable. It might be difficult to modify the platform to accommodate regional payment methods, tastes and languages. Furthermore, Amazon needs to stand out from the competition and provide customers with an attractive value proposition in order to compete with the established local online shopping firms.

Acquisitions- Amazon has occasionally opted to expand into new areas via acquisitions (Rodrigue, 2020). For instance, the Middle East's quick entry was made possible by the purchase of Souq. It may be challenging to incorporate acquired businesses into Amazon's worldwide network while maintaining consumer trust and honoring local traditions. Acquisitions could be subject to regulatory obstacles.

Joint Venture and Partnerships- Amazon has established alliances and joint ventures with regional businesses; one such alliance is with Future Retail in India. By doing this, Amazon can benefit from the local partner's knowledge and comprehension of the market. In joint ventures, striking a balance between controls as well as making decisions may be difficult. There may be variations in corporate cultures as well as strategic goals, necessitating efficient management.

Cross-border e-commerce- Customers may buy goods from other nations thanks to Amazon's international e-commerce capabilities. This tactic gives retailers worldwide visibility while increasing the items' accessibility to customers. Strategic preparation is necessary due to the complexity of regulations, customs charges, and logistical difficulties in cross-border operations. Achievement in the market requires the ability to adjust to various restrictions.

Localized services and content- Amazon customizes its offerings and content for regional markets to meet the varied interests of its customers. This involves supplying items unique to a certain area, translating material into local languages, and modifying marketing tactics. Precise localization efforts are necessary to ensure cultural sensitivity and conformity with local standards. Errors in assessing local attitudes may hurt the brand's reputation.

Franchising- Through franchising, Amazon allows regional business owners to utilize its name as well as its business plan in exchange for payments and royalties. Due to this strategy, which involves local franchisees investing in and running the company, Amazon can grow quickly while assuming fewer financial hazards. This strategy offers a speedy market entry, but to preserve brand quality as well as uniformity control, franchisees must be carefully chosen and managed.

Foreign direct investment- Foreign direct investment is another effective way to enter that Amazon uses. Building subsidiaries or purchasing companies in the intended market will require significant capital investments. Direct control over activities is made possible by FDI for Amazon, which improves strategic cooperation with international standards and maximizes operational effectiveness. Nevertheless, FDI necessitates a deep comprehension of regional laws, cultural quirks, and possible integration-related obstacles.

Exporting- Amazon frequently exports its goods to new areas as a first step in its worldwide expansion (Qi, 2020). With this approach, the firm may experiment with a comparatively small initial expenditure and little change to its current business plan. Obstacles to exporting might include taxes, import limitations and logistical challenges. Success depends on tailoring the good or service to local tastes. Furthermore, if Amazon just exports, it might not be able to properly comprehend and interact with local consumers.

Licensing- Using a licensing method, Amazon allows a local partner to utilize its items, technology, or brand in return for payments. By using this approach, Amazon can make use of the resources as well as expertise of the local partner. Using licensing might make it difficult to preserve consistency in the brand as well as guarantee quality control. Maintaining the image of its company and making certain that its licensees follow international standards requires Amazon to pick and handle them properly.

Piggybacking- It is when Amazon uses the infrastructure or achievement of other local companies or channels to its advantage. Amazon can make use of current networks as well as consumer bases thanks to this tactic. Amazon has to negotiate the complexities of working with regional partners. Although, it offers a speedy entry into the market, relying on regional partners for advertising or distribution might come with dangers if the collaborations fall apart or if the local partners have difficulties.

Recommendations

In order to augment Amazon's global competitiveness, two suggested entrance tactics encompass:

Partnerships and joint ventures- Engaging in joint ventures or collaborations with well-established local enterprises may greatly enhance Amazon's comprehension of a variety of markets (Steenkamp, 2020). Amazon may further adeptly handle legal obstacles, cultural quirks, and client demands by utilizing the experience and current clientele of regional partners. By enhancing its capacity to customize its services as well as offerings to certain locations, this strategy helps Amazon become more competitive and more well-liked.

Localization and customization- Making a strong localization as well as customization approach a top priority is needed. To meet the different needs and expectations of every market, Amazon's channels, content, as well as amenities must be customized. Amazon can provide consumers with a more tailored and engaging encounter by investing in particular language interfaces, appropriate cultural marketing, and local item assortments. Ultimately, this strategy strengthens its competitive edge worldwide by improving customer interaction and displaying a dedication to comprehending and appreciating the variety of its foreign client base.

Conclusion

The report concludes that Strategic flexibility, customer focus, and ongoing innovation are the hallmarks of Amazon's growth from a digital bookshop to a major player in worldwide online shopping and technology. Utilizing strategic planning frameworks has allowed for a thorough knowledge of both internal and outside factors influencing Amazon's performance. The corporation demonstrates its flexibility in navigating a variety of markets through its worldwide strategies, which include corporate, business, as well as market entrance strategies. Amazon has several difficulties despite its apparent dominance, including governmental monitoring, competitive issues, and the requirement for cultural change. The significance of cooperation and customization to improve global competitiveness is emphasized in the proposals for joint ventures, partnerships, and extensive localization. Amazon is still a major player in the international commercial scene because of its dedication to both technology innovation and consumer pleasure, even as the company keeps evolving.

References

Books and Journals

• Alshmrani, H.M., 2021. An analytical view of amazon success in the worldwide. Life Science Journal, 18(6).
• Brodie, P. and O'Neill, P., 2022. Confronting the Regionalism of Amazon Web Services. Amazon: At the Intersection of Culture and Capital, p.287.
• Garnelo, L., Parente, R.C.P., Puchiarelli, M.L.R., Correia, P.C., Torres, M.V. and Herkrath, F.J., 2020. Barriers to access and organization of primary health care services for rural riverside populations in the Amazon. International Journal for Equity in Health, 19, pp.1-14.
• Mazzone, A., 2020. Thermal comfort and cooling strategies in the Brazilian Amazon. An assessment of the concept of fuel poverty in tropical climates. Energy Policy, 139, p.111256.
• Pananond, P., Gereffi, G. and Pedersen, T., 2020. An integrative typology of global strategy and global value chains: the management and organization of cross?border activities. Global Strategy Journal, 10(3), pp.421-443.
• Pereira, C.A., Tabarelli, M., Barros, M.F. and Vieira, I.C.G., 2023. Restoring fire?degraded social forests via biocultural approaches: a key strategy to safeguard the Amazon legacy. Restoration Ecology, p.e13976.
• Qi, X., Chan, J.H., Hu, J. and Li, Y., 2020. Motivations for selecting cross-border e-commerce as a foreign market entry mode. Industrial Marketing Management, 89, pp.50-60.
• Rikap, C., 2022. Amazon: A story of accumulation through intellectual rentiership and predation. Competition & Change, 26(3-4), pp.436-466.
• Rodrigue, J.P., 2020. The distribution network of Amazon and the footprint of freight digitalization. Journal of transport geography, 88, p.102825.
• Steenkamp, J.B.E., 2020. Global brand building and management in the digital age. Journal of International Marketing, 28(1), pp.13-27.
• Walker, W.S., Gorelik, S.R., Baccini, A., Aragon-Osejo, J.L., Josse, C., Meyer, C., Macedo, M.N., Augusto, C., Rios, S., Katan, T. and de Souza, A.A., 2020. The role of forest conversion, degradation, and disturbance in the carbon dynamics of Amazon indigenous territories and protected areas. Proceedings of the National Academy of Sciences, 117(6), pp.3015-3025.
• West, E., 2019. Amazon: Surveillance as a service. Surveillance & Society, 17(1/2), pp.27-33.
• Yang, Z., 2022. Amazon vs. Alibaba: Comparisons of Two E-commerce Giants based on SWOT Analysis. Highlights in Business, Economics and Management, 2, pp.497-503.
• Zwakman, D.S., Pal, D. and Arpnikanondt, C., 2021. Usability evaluation of artificial intelligence-based voice assistants: The case of Amazon Alexa. SN Computer Science, 2, pp.1-16.

Online

• Amazon PESTEL Analysis. 2023. [Online]. Available through: <https://panmore.com/amazon-com-inc-pestel-pestle-analysis-recommendations>
• Unpacking Amazon's Success: A Comprehensive SWOT Analysis. 2023. [Online]. Available through: <https://www.allnewbusiness.com/amazon-swot-analysis/>