Amazon's Strategy to Success

https://profitworks.ca/blog/marketing-strategy/543-amazon-business-strategy-le
adership-online-retailing.html

● Amazon Focuses On The Long Term Not The Short Term

● Amazon Builds Its Strategy On Things That Don't Change
● Amazon Sees Opportunities and Not Failures
● Amazon's Has Strong Values & Culture
● Amazon Stresses the Importance of Customer Satisfaction Instead Of The
Competitor
● Amazon Achieves Excellent Customer Satisfaction By Offering An Ever
Expanding And Large Selection of Products And A Personalized Experience
● Amazon Achieves Excellent Customer Satisfaction through Speedy Service
● Amazon Achieves Excellent Customer Satisfaction through Competitive Prices
● Amazon Trains Employees To Understand The Customer Experience To Get All
Employees To Understand The Customer
● Amazon's Marketing Strategy Is Providing Great Service That Creates Positive
Word Of Mouth and Focusing On SEO & PPC
● Amazon Maintains Leadership with Their Product Selection
● Amazon Maintains Leadership by Offering Various Features and Services
● Amazon Continually Improves the Customer Experience
● Amazon Focuses On The Long Term Not The Short Term
● “We are comfortable planting seeds and waiting for them to grow into
trees,” says Bezos. “We don’t focus on the optics of the next quarter; we
focus on what is going to be good for customers. I think this aspect of our
culture is rare.” 4
A perfect example of the long-term focus is Amazon Web Services (AWS) and how
it started with startups and developers and has now expanded to million of
customers.  Companies of all sizes use AWS such as Pinterest, Airbnb, GE, Capital
One, Johnson & Johnson, McDonald's and Time Inc. 39
 
Amazon Builds Its Strategies On Things That Don't Change
"Base your strategy on things that won’t change....Whereas if you base your
strategy first and foremost on more transitory things—who your competitors are,
what kind of technologies are available, and so on—those things are going to
change so rapidly that you’re going to have to change your strategy very rapidly,
too."  5

Bezos notes customers want "selection, low prices, and fast delivery".  He shares
how these three desires of the consumer are likely not going to change.  5 
Amazon Sees Opportunities and Not Failures
Instead of focusing on setbacks, Jeff Bezos the founder of Amazon sees
opportunities and solutions. This is evident in how Bezos talks about failure and
planting seeds. "If you invent frequently and are willing to fail, then you never get to
that point where you really need to bet the whole company. [Amazon Web
Services] also started about six or seven years ago. We are planting more seeds
right now, and it is too early to talk about them, but we are going to continue to
plant seeds. And I can guarantee you that everything we do will not work. And, I
am never concerned about that. We are stubborn on vision. We are flexible on
details." 1 Bezos made risky moves early on in the establishment of Amazon that
helped in the long-run.  It is noted that Bezos invested in warehouses, which
caused the stock prices to drop significantly at first, but this contributed to their
journey to become the leader in online retailing.  2 & 3
Amazon Has Strong Values & Company Culture
The values of Amazon has impacted their leadership and success in Online
Retailing.  The website lists Amazon's principles and values for working at the
company and they are listed below:  10

● Customer Obsession (Starting with the customer)

● Ownership (Looking at the long-term results and what is the best for the
company)
● Invent and Simplify (Expect innovation from the team)
● Are Right, A Lot (Have good instinct, strong business judgment) 
● Hire and Develop the Best (Leaders develop leaders, hiring exceptional talent)
● Insist on the Highest Standards (Raising the bar, ensuring high quality)
● Think Big (bold direction, thinking differently)
● Bias for Action (Speed, and calculated risk-taking)
● Frugality ("There are no extra points for growing headcount, budget size, or fixed
expense")
● Learn and Be Curious (Always exploring and improving)
● Earn Trust ("Leaders listen attentively, speak candidly, and treat others
respectfully")
● Dive Deep (Look at details, audit regularly, work at all levels)
● Have Backbone; Disagree and Commit (Respectfully challenge others, don't
compromise for social cohesion)
● Deliver Results (Timely fashion, deliver quality)

Amazon Stresses The Importance Of Customer Satisfaction Instead Of The

Competitor
"If you're competitor-focused, you have to wait until there is a competitor doing
something. Being customer-focused allows you to be more pioneering."  11

"Each year the University of Michigan calculates a customer-satisfaction index for

225 of America’s largest companies. Amazon has led the online retailing category
for years and has repeatedly placed in the top 10 among all companies."  4 

Bezos adopted an approach to help never lose the importance of customer

satisfaction and Amazon narrows in on eliminating the risk of unsatisfied customers.
As you can see from the quotes above, Amazon walks the talk in being successful in
maintaining customer satisfaction (See Michigan Study for further details). Amazon
strives for excellence in customer satisfaction, perhaps one could say a strive for
perfection. Bezos states that “We’re not satisfied until it’s 100%.”   It is noted that
9

Bezos would have an empty chair to remind staff in the meeting to imagine a
customer present and to consider what they would want.  He called the customers
"“the most important person in the room.” 4Bezos describes the importance of
knowing your customer and things that will not change.  He notes customers want
"selection, low prices, and fast delivery." He shares how these three
consumer desires are likely not going to change.  5 
Amazon Achieves Excellent Customer Satisfaction By Offering An Ever Expanding
And Large Selection of Products And A Personalized Experience
Amazon focuses on customer service and waits to see where opportunities present
to sell them personalized products. "We’ve had three big ideas at Amazon that
we’ve stuck with for 18 years, and they’re the reason we’re successful: Put the
customer first. Invent. And be patient."  1  Amazon observes the actual purchase
behaviour of the customer. They take an individual approach to each customer.
They are noted to target middle and upper-class customers that are comfortable
with basic technology and look to save time by purchasing online.  6 Amazon
implements customer reviews and showcases items that would be personalized for
the customer based on their previous purchase behaviour. 
{youtube}2rEW4KFqHZc{/youtube}
Click Above to Watch Jeff Bezos about the Importance of Evolving
Amazon Achieves Excellent Customer Satisfaction Through Speedy Service
It is noted that Amazon is very focused on preventing any delays (in products,
delivery, web page loading).  "Amazon has metrics showing that a 0.1 second delay
in page rendering can translate into a 1% drop in customer activity."  Amazon
4 

stresses the importance of fast delivery for the consumer. In addition to fast
delivery, they also value efficiency within the operations of the company and
affordability for the consumer.  
Amazon Achieves Excellent Customer Satisfaction Through Competitive Prices
Bezos tries to keep all costs low within the business to allow for him to provide the
low prices.  “Frugality” is one of eight official company values as stated earlier -
This will align for how Bezos operates the company and ensures unnecessary
expenses are not occurring which would result in the consumer having to pay
more. For example, he is known for keeping old black-and-white printers and other
office equipment at low cost, no one in the company flies first class, and keeping
the size of the teams small.  He also has a "two pizza rule" which essentially is that if
you require more than two pizzas to feed a team, it is too big.  4 & 7 Bezos restricts his
salary to $81,840 as well as his management team's salary to help keep costs low. It
appears that employees get some ownership in the company (stock options) to
counter the lower salaries.  8 

Amazon Trains Employees To Understand The Customer Experience To Get All

Employees To Understand The Customer
Jeff Bezos ensures managers and all staff understand the experience of the
customer. He arranges for them to take a two-day training at a call center to allow
them to understand what the customer goes through and to ensure humility.  4 &
 Bezos not only encourages his managers to be sensitive to the customer
9

experience, but he also has role modeled this in his interactions with the
consumers.  This can be seen when Bezos showed humility to his consumers when
Amazon made a mistake of deleting e-books of their customers and he sent out a
personable apology. The apology is noted to make customers remain loyal and
quickly forget about the issue.    
9

Amazon's Marketing Strategy Is Providing Great Service That Creates Positive Word
Of Mouth and Focusing On SEO & PPC
“If you make customers unhappy in the physical world, they might each tell six
friends. If you make customers unhappy on the Internet, they can each tell 6,000 .”  11

Amazon focuses on making the customers happy. Their budget for advertising is
small for its size of the company, but they focus on word-of-mouth being an
essential part of their success. "If you do build a great experience, customers tell
each other about that. Word of mouth is very powerful."  4 & 11 Amazon spent 2.8
billion dollars on digital marketing. If you look at their sales from 2014-2015, it was
$71.84 billion in sales. 
12 & 13

Leadership
https://www.academia.edu/10333555/Uncovering_Leadership_Sty
les_An_Analysis_of_Jeff_Bezos_and_Amazon.com
Employee Motivation

https://www.cnbc.com/2018/04/19/jeff-bezos-is-particularly-proud-of-this-amazon-emplo
yee-benefit.html
is an inspiration that creates by every environment, factors which is included with the employee of an
organization. It is an important element for an organization because the success mostly depends on
the dedication of an employee, which comes from motivation. Successful motivation improves
morale; reduce turnover, increases production and profit. 

Amazon founder and CEO Jeff Bezos is very proud, in fact he is 'particularly
proud' of a unique benefit that the company provides to its employees: the
chance to go back to school and learn some in-demand skills for the
workplace.

With, Amazon Career Choice, Amazon pre-pays 95 percent of up to $12,000

in tuition, fees, and textbooks for its hourly associates looking to earn
certificates or associate degrees in high-demand occupations such as aircraft
mechanics, computer-aided design, machine tool technologies, medical lab
technologies, and nursing.

Bezos noted this program as a point of pride in his closely watched annual

letter to shareholders, released on Wednesday, where he wrote that the
company funds education in the areas regardless of whether they are related
to the employee's current operations.

Training and educating workers, particular those who are not full-time, has
become a key topic and area of investment for major corporations.

Jeff Bezos motivates Amazon employees by

offering cash to quit
https://www.domain-b.com/management/general/20140415_jeff_bezos.html

To ensure that only those employees who want to work for

him do so, Amazon CEO Jeff Bezos has employed reverse
psychology by promising to pay employees $2,000 plus four
weeks pay if they leave the company right away.

Employees receive the offer by email sent to their work

inbox and under the subject line ''please do not take up this
offer.''

He even sweetens the offer with an extra $1,000 every year,

up to $5,000.
The strategy was revealed by Bezos in an annual shareholder letter released last week.
He said the offer was introduced to the company by Zappos, an online shoe store
acquired by Amazon in 2009.

But the question is does he want employees to take the offer and leave?

The offer is a carrot to help staff resolve a question that many employees ask themselves
from time to time: "would I be better off working somewhere else?"

According to Bezos, those who decide to turn down the offer and stay put are more likely
to approach their work wholeheartedly.

"The goal is to encourage folks to take a moment and think about what they really want,''
he writes. ''In the long run, an employee staying somewhere they really don't want to be
isn't healthy for the employee or the company.''

Bezos also mentioned an employee management tactic called 'Career Choice'.

''[W]e pre-pay 95% of tuition for our employees to take courses for in-demand fields,
such as airplane mechanic or nursing, regardless of whether the skills are relevant to a
career at Amazon,'' wrote Bezos. He said the goal was to enable choice.

''We know that for some of our fulfillment center employees, Amazon will be a career.
For others, Amazon might be a stepping stone on the way to a job somewhere else – a
job that may require new skills. If the right training can make the difference, we want to
help.''

Bezos also revealed a flexible working policy whereby employees across over 10 states
work from home, providing customers with virtual customer service from the comfort of
their own domains.