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    Corporate Level Strategy

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    Nakshtra Das
    Amazon uses a cost leadership strategy to gain a competitive advantage through minimizing operational costs. It focuses on improving its IT infrastructure and heavily investing in R&D. Amazon also aims to minimize prices. It uses market development and market penetration for growth by expanding into new markets and attracting more customers aggressively. Product development is also a strategy by introducing new products at low costs. Diversification, such as acquiring Audible, is less significant.

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    Corporate Level Strategy

    Uploaded by

    Nakshtra Das
    91 views16 pages
    Amazon uses a cost leadership strategy to gain a competitive advantage through minimizing operational costs. It focuses on improving its IT infrastructure and heavily investing in R&D. Amazon also aims to minimize prices. It uses market development and market penetration for growth by expanding into new markets and attracting more customers aggressively. Product development is also a strategy by introducing new products at low costs. Diversification, such as acquiring Audible, is less significant.

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    Amazon uses a cost leadership strategy to gain a competitive advantage through minimizing operational costs. It focuses on improving its IT infrastructure and heavily investing in R&D. Amazon also aims to minimize prices. It uses market development and market penetration for growth by expanding into new markets and attracting more customers aggressively. Product development is also a strategy by introducing new products at low costs. Diversification, such as acquiring Audible, is less significant.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    91 views16 pages

    Corporate Level Strategy

    Uploaded by

    Nakshtra Das
    Amazon uses a cost leadership strategy to gain a competitive advantage through minimizing operational costs. It focuses on improving its IT infrastructure and heavily investing in R&D. Amazon also aims to minimize prices. It uses market development and market penetration for growth by expanding into new markets and attracting more customers aggressively. Product development is also a strategy by introducing new products at low costs. Diversification, such as acquiring Audible, is less significant.

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    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 16

    Amazon.

    com Inc

    Corporate Level Strategy


    Lower Cost Differentiation
    Porter’s Competitive Advantage

    Broad Target Cost Leadership Differentiation

    Narrow Target
    Focus
    VALUE CHAIN ANALYSIS
    Value chain analysis is an analytical framework that assists in identifying business activities that can
    create value and competitive advantage to the business. The figure below illustrates the essence of
    Amazon value chain analysis.
    VALUE CHAIN ANALYSIS
    Amazon Primary Activities

    Amazon Inbound logistics- Fulfilment by Amazon (FBA) is the cornerstone of Amazon inbound logistics for
    company-owned retail business. Sellers can also use FBA by stowing their inventory in Amazon fulfilment centres.

    In this case, Amazon assumes full responsibility for logistics, customer service, and product returns.
    Amazon Operations- Amazon operations are organized into three segments:

    1. North America. This segment operates North America-focused websites such as www.amazon.com,
    www.amazon.ca, and www.amazon.com.mx.

    2. International. This segment operates internationally-focused websites such as www.amazon.com.au,


    www.amazon.com.br, www.amazon.cn and others.

    3. Amazon Web Services (AWS). This segment deals with global sales of computing, storage, database, and
    other service offerings for start-ups, enterprises, government agencies, and academic institutions.
    VALUE CHAIN ANALYSIS
    Amazon Outbound logistics- Traditionally, Amazon has relied upon the services of overnight delivery
    businesses such as UPS, FedEx and TNT. However, the company “recently revealed plans to lease about 20 Boeing
    767 Freighters in an attempt to start its own air delivery business”.

    Amazon Marketing and Sales- In 2016, Amazon spent more on marketing than Wal-Mart Stores, Target, Best
    Buy, Home Depot, and Kroger combined.Amazon marketing message conveys the promises of the largest selection
    of products and services, attractive prices, fast delivery of products and overall superior customer services.

    Amazon Service- Exceptional customer service is a major source of value creation for the e-commerce and cloud
    computing company.Moreover, Amazon’s returns process is dealt with entirely online through a customer’s
    account.
    AMAZON’S VALUE CHAIN ANALYSIS
    Support Activities
    Firm Infrastructure: It provides services to customers, sellers and developers through its retail websites. It also
    manufactures and sells the kindle e-reader. Amazon offers programs that enable sellers to sell their products on its
    websites and their own branded websites.

    Human Resource Management: Amazon has an organic organizational structure. The reason is that E-business tends to
    take on organic properties in order to achieve the necessary flexibilities, speed and openness.

    Technology Development: Amazon was built in Seattle because it had a large pool of technical talents. Bezos created
    innovative software and programming. Amazon is the Customer Service leader among e-tailers using Customer
    Relationship Management (CRM) and Information Technology (IT) support its business strategy.

    Procurement: Amazon adopted e-procurement which brings the experience of Amazon.com to the purchase of academic
    supplies and equipments.
    SWOT ANALYSIS
    AMAZON’S SUBSIDIARIES
    A9.com

    Amazon Maritime-Audible.com.

    Beijing Century Joyo Courier Services

    Brilliance Audio

    ComiXology

    CreateSpace

    Eero

    Lab126

    Whole Foods Market


    AMAZON’S PRODUCT LIFE CYCLE
    AMAZON’S ECHOES AND ALEXAS
    CURRENT SCENARIO
    On November 6 2014, Amazon announced Echo, a smart speaker featuring a voice-
    controlled assistant service called Alexa.People quickly saw that the pint-size cylinder
    was a genuinely new kind of consumer-electronics device. They got excited over the
    concept, and, soon thereafter, by where Amazon was taking it.The company opened up
    Echo sales to all comers in July 2015. Today, it has a hit product on its hands.

    Alexa is also available on Amazon’s Tap (a cheaper, smaller Echo) and Dot (an adapter
    for other speakers) as well as its Fire TV box and Fire tablets, and is gradually coming to
    non-Amazon devices.
    AMAZON’S GENERIC STRATEGY
    Amazon uses cost leadership as its generic strategy for competitive advantage. Minimization of operational costs is
    the objective in this generic competitive strategy. For example, Amazon.com uses advanced computing and networking
    technologies for maximum operational efficiency, which translates to minimized costs.

    A strategic objective linked to Amazon’s cost leadership generic strategy is to build e-commerce competitive advantage
    through continuous improvement of information technology infrastructure.

    In relation, the company also has the strategic objective of heavily investing in research and development (R&D) to
    optimize the performance of its IT resources

    In addition, the cost leadership generic competitive strategy pushes Amazon.com Inc. to minimize its price levels. This
    strategic objective impacts Amazon’s marketing mix.

    Through the generic strategy of cost leadership, competitive advantage is gained to support the fulfillment of
    Amazon.com Inc.’s mission statement and vision statement, especially with regard to online retail global growth and
    leadership.
    AMAZON’S INTENSIVE GROWTH STRATEGIES
    Market Development. Amazon uses market development as its current primary intensive growth strategy. Entry and growth
    in new markets is the main objective in this intensive strategy. Amazon.com Inc. adds new countries where it offers its
    services. A strategic objective related to this intensive growth strategy is for Amazon.com to establish new online retail
    websites that correspond to new countries added to the company’s global market reach.

    Market Penetration. Market penetration is a secondary intensive growth strategy in Amazon’s online retail business. The
    objective of this intensive strategy is to generate more revenues from the markets where the company currently operates. The
    company’s generic strategy creates the competitive advantage necessary to penetrate markets based on low costs and
    prices. A strategic objective based on this intensive growth strategy is to implement an aggressive marketing campaign to
    attract more consumers to Amazon’s e-commerce website.

    Product Development. Amazon.com Inc. applies product development as a supporting intensive strategy for business
    growth. Developing and offering new products to gain higher revenues is the goal of this intensive growth strategy. The
    company’s cost leadership generic strategy supports this intensive strategy by providing the company with low-cost business
    processes to introduce new products.

    Diversification. Diversification is the least significant among Amazon’s intensive growth strategies. Growth based on new
    business is the objective in applying this intensive strategy. For example, Amazon grew through its acquisition of Audible,
    which is a producer of audiobooks and related products.
    Ansoff Matrix
    Strategic Position

    ● Political

    >EU,WTO

    ● Economical
    ● Social

    >Social Networking

    ● Technological
    ● Environmental
    ● Legal
    Strategic Plans

    ● Amazon Bookstores
    ● Amazon Go
    ● Grocery Shopping Options
    ● Roaming Treasure Truck
    Corporate Level Strategy for Retailers

    ● Promoting products on Alexa.


    ● Amazon-branded bank accounts
    ● Amazon plants
    ● Amazon Prime
    ● Amazon apparel
    ● The Whole Foods acquisition
    ● New Loyalty Study

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