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Strategic Management – Amazon Company

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Strategic Management – Amazon Company

Amazon is the world market leader internet-based retailer and is to be sure a trailblazer in
the web-based retailing space. However, It commenced as an online-based book store, but as it
progressed in its mission, it was compelled to diversify into advertising anything that could be
marketed online. Further, Amazon has likewise extended universally and currently operates on a
global scale using a combination of methods of confined entrances and globalized conveyance
and planned operations stages. The method in which Amazon has used development as a process
of advantage and reaped the economics of scale, as well as exploiting partnerships amongst its
inside resources and the outside forces, has spawned a slew of competitors that want to imitate
and improve on its strategy.
Amazon's non-exclusive business structure might be characterized as circumferential
widening. This process is predicated on implementing new skills for success in business and
adhering to an expenditure government method aiming at giving the greatest amount of
information benefit for its customers at the lowest cost, and also crumpling its company over the
customers, in which they perceive Amazon as the go-to entry point for their web-based shopping
needs. Actually, this model has worked effectively, as shown by the reality that it is the biggest
in the globe web-based retail and has consistently been the trailblazer in the market segments in
which it operates. However, it really should be noted that cost management might maintain the
pattern of persistent, inescapable losses, whereby enterprises using this practice discover that
they can't fund growth or enhance efficiency once the "easy pickings" are plucked (Mathew,
2014).
Moving on, the noncommercial marketing strategy employed by Amazon may be
explained using The Ansoff lattice, as seen graphically in the picture above. Amazon is situated
in the Global Price Strategy sector, and its consistent emphasis on prices has earned them this
place is the key to achieving its overall strategy. The specific steps undertaken by Amazon in
pursuit of this framework integrate steep boundaries for regular folk through into the Amazon
Prime curriculum, intended to guarantee perfect and, remarkably, accelerated provider and, on
event, foregoing shipping costs, having to pass on the benefits of wanting to stay away from
government expenditures to the customers, thus reducing the overall cost significantly even
farther, and a widely applied with the hope of creating the customer service as reliable as
possible.
Besides that, Amazon's approach is dominated by its sources of opportunity, where it is
focused on development, enjoying the economics of scale, and exploiting the efficiency from
partnerships among its external factors and internal assets were the cornerstones of its strategy.
Amazon also makes use of Data Analytics that are big, as a tool for forecasting customer
behavior. To really be sure, Big Data has become so well received by the company that it is now
in a position to promote it as yet another service product. Anyone who has purchased on Amazon
has seen a list of recommended things that are chosen based on their browsing habits and the
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scheduling of their purchases with that of future purchases. This implies that Amazon can
identify and anticipate what consumers prefer and how to personalize its approaches accordingly.
As said throughout this piece, Amazon makes extensive use of development, that's not surprising
given that it is a web-based corporation.
However, Amazon's relative price management with minimal item segmentation means
that its strategy has been imitated by "me-as-well" competitors in a vicious cost war which has
left everyone injured. Furthermore, its concentration on cost reduction at the expense of item
differentiation suggests that its products are also available through other portals, and that there is
no service offering that is exclusive or unique to it. Other than that, Amazon doesn't really carry
things that appeal to the demand for "moment gratification," in which shoppers make impulsive
purchases and are worried and seek quick answers. For instance, except maybe its motion films
as well as other technological items, the company's other current products are often not in the
category of those that pleasure customers.
After proclaiming that, it should have been noted that Amazon's currently underway
methodology is likewise planned all around convenience point of view, in which customers do
not have to go to a physical book store or even believe that their purchases will turn up after a
little period as it has provided fast and reliable method of transport in various zones and is, in
any case, experimenting with utilizing Drone technology for tight to instantaneous
transportation. Apart from just that, its focus on non-retail product portfolio, such as cloud-based
presidencies, suggests that it is fixing the problem of isolation and its overdependence on price
authorities. Amazon has campaigned for "one-click" purchasing, in which customers may buy
anything under the sun from its portal with a single click of a button. According to the rates at
which Amazon is growing, their strategy is undoubtedly "connecting" with its customers. With
that proclaimed, it is critical for Amazon to sustain its rates of growth and stay up with the
demand.
Furthermore, a source of concern for the company is that it has failed to generate profits
in a big number of periods in latest days. A plausible rationale for this might be its overemphasis
on cost administration, which implies that in the "race to the bottom," its major focus is
jeopardized. Finally, Amazon must encompass a Global approach in its worldwide economic
sectors, in which it aligns its International action plan with local implementation of transit and
activities supply chain. This would undoubtedly create a transnational corporate value chain in
which anybody, anywhere may acquire anything at any time even without fail.
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Number of Employees
We should be familiar with what number Employees does Amazon have? Amazon
utilizes around 1.3 million individuals with the expansion of in excess of 170000 specialists from
the occasion quarter alone. The headcount has expanded by 63% since a year. The all-out
headcount does exclude the occasional and provisional laborers that reach in many thousands.
Amazon has enrolled around 500,000 laborers in 2020 for fulfilling the rising need for
distributed computing administrations and internet shopping because of the new pandemic. It is
after all the second biggest boss utilizing 1.3 million individuals in the US and simply second to
Walmart (Samuel, 2021).

Vision, mission and objectives of Amazon company

Amazon.com strives to be the world's most customer-focused corporation, where people
can find and buy everything they want on the internet. Amazon.com continues to expand and
improve as a premier online business platform by providing customers with more of what
customers want - cheap prices, a large selection, and convenience. Amazon's primary goal is to
focus on long range growth by becoming the world's most client-driven corporation. "We
attempt to provide our customers the most decreased potential prices, the finest available
selection, and the largest quantity of pleasure," says Amazon's mission statement. The
proclamation spells out exactly what clients may anticipate from Amazon: facilities that go
above and far beyond providing their fundamental requirements (QuerySprout, 2022).

Targeted market segments and customers

Beginning in 2022, Amazon's targeted clientele consists of medium and upper-class
people. purchasers (evenly split across genders) with personal Computers or electronic gadget
between the ages of 18 and 44. Moreover, The United States accounts for 60% of Amazon's
customer base, where people like to purchase internet for ease of use, rapid delivery, and low
prices. Amazon attempts to target a client population that encounters and often accesses the
internet, giving younger ages the ideal Amazon customer. Moreover, The bulk of Amazon Prime
subscribers are aged 35 to 44. Amazon Prime members have far higher reserve money, restricted
agreements, and more cash reserves than non-Prime members. However, with the internet's
increasing ubiquity, Amazon's target audience now includes individuals of different ages. The
area of Amazon's objective market reaches out to any area with web availability. Since Amazon
has a global presence, the retailer has a tremendous client base of individuals around the world.
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Amazon Products

The product offering of Amazon incorporates books, DVDs, music CDs, shopper
hardware, tapes, apparatuses, toys and games, yard, child items, outdoor supplies, child items,
watches, magnificence items, food, and apparel, among others (Smith 2011). Amazon Kindle is
one more item that the organization assisted with sending off in November 2007. This item is as
a digital book peruse. With the digital book per user, a client is in a situation to download the
items. This is made conceivable by a remote organization. On account of the amazons Kindle,
the remote organization being used is the Sprint Nextel EV-DO. As a feature of its item
expansion, Amazon was engaged with the starting of MP3 administrations. This was in January
2008. Therefore, sites auxiliary to Amazon are currently better ready to get to the MP3
administration around the world.

The most current item to be sent off by Amazon is Amazon.com special features. The
item is basically as a DVD and its accessibility is limited to Amaon.com as it were. Based on the
items presented by Amazon, the organization targets assorted markets. For instance, on account
of its music CDs/DVDs, the organization for the most part targets teens and youthful grown-ups
underneath the age of 40 years, then again, books sold by Amazon targets understudies,
scientists, scholastic and exploration establishments, and libraries.

Background of Amazon Company

Name Amazon.com, Inc

The served market sectors Web, online shopping

Geographic areas served Global

Headquarters Seattle, Washington, U.S

Current CEO Jeffery Bezos

Earnings $ 61.09 billion

Profit $ (39) million

Workers 88,400
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Major competition eBay Inc., Netflix, Apple Inc., Wal-Mart

External Factors Evaluation Matrix (EFE)

Key External Factors Weight Rating Score

Opportunities

1. Expanding Internet 0.2 3 0.6

expansion into
emerging markets

2. Creating a presence 0.1 1 0.1

physically

3. Options for 0.2 3 0.6

payment online

Threats

1. Online safety 0.2 4 0.8

2. Lower entry 0.1 2 0.2

strategy cost

3. Strategic 0.2 4 0.8

partnerships and
business alliances
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Total 1.0 3.1

Competitive Profile Matrix (CPM)

Amazon.com Wal-Mart eBay

Critical Success Weight Rating Score Rating Score Rating Score

Factors

Administration 0.2 4 0.8 3 0.6 3 0.6

Position financially 0.2 2 0.4 4 0.8 4 0.8

Expanding globally 0.1 3 0.3 3 0.3 4 0.4

Price 0.3 4 1.2 4 1.2 2 0.6

competitiveness

Market share 0.2 4 0.8 4 0.8 2 0.4

Total 1.0 3.5 3.7 2.8

Internal Factors Evaluation Matrix (IFE)

Key Internal Factors Weight Rating Score

Strengths

1. Distribution system 0.2 4 0.8

that is efficient

2. Dominating the 0.1 4 0.4

retailing that occurs
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online

3. Leadership cost 0.25 4 1.0

Weakness

1. Operating on margins 0.2 1 0.2

that are slim.

2. Online presence that is 0.15 2 0.3

exclusive

3. Controversies in 0.1 2 0.2

Amazon

Total 1.0 2.9

SWOT MATRIX
The company has a habit of extensively putting ideas to the trial and afterwards
increasingly focusing on the ones that work. Furthermore, as an institution that is not afraid to
fail, and will risk money to promote a merchandise or administrations, irrespective of whether
something implies some danger of failing.

Knowledge: Amazon has a large quantity of information about its consumers. Amazon not only
uses the analytics to enhance its very own activities and merchandise offerings, but it also makes
it available to partners via the Amazon DSP initiative.

Prime participation: Amazon is well-known and popular among customers, and there is a high
devotion to the organization among Prime individuals.

Overall acknowledgment: Amazon has an influence on whatever niche demographic it

penetrates. Amazon has had the choice of using its comprehension and retention globally, which
transfers such apprehension to new areas of the economy. Amazon presently controls 31% of the
German market and 47% of the whole sector in the Region.

Coordinated factors: the company has a structured logistics structure that is far superior to that of
other retail companies, and is a major means the company might achieve its goal of becoming
the world largest most client-focused corporation. Amazon invests much in its computed
structures, from appropriating emphases around large metropolitan regions to a top ranked
sophisticated mechanical structure for any further enhanced efficiency.

Since the company is so enormous doesn't mean it's distant. The organization likewise has a few
shortcomings that make it defenseless.
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Discontinuity: Amazon is a company that does "all." It operates a digital presence that creates
high-quality TV shows and movies, a cloud-based online provider, and a web-based store into
one.

This might be a benefit as Amazon could rule different ventures, however it additionally restricts
the organization's capacity to zero in on one key objective.

Restricted real physical appearance: Amazon has a more restricted real presence physically
contrasted with contenders like Target and Walmart.

Valuable open doors for Amazon

Alexa Development: it is an essential strategy for the company to obtain buyers considerably got
into the company’s framework. While the technologies both propel the organization's main goal
of giving an extraordinary encounter, a definitive inspiration for these items is to make the
requesting system consistent.

The basic brand of Amazon: the company’s definitive objective is buyer information, however
it's not a bad intend to assume control globally. The company considers buyer information to be
the way to offering more benefit to its clients.

This is, in part, what inspired the creation of the company’s Fundamentals, its own label.
Whatever commenced as the company’s option for phone chargers and cells has become into a
range of things, which include culinary accessories (Grace, 2021).

The company’s threats

Security for data over the internet: it is among the greatest dangers the company will look in
what's to come is the proceeded with banter over the meaning of private information against
what people mean by public information.

Regulation and guidelines: Regardless of its strength, Amazon is as yet dependent upon the
regulations and guidelines of any country in which it works. In the event that any general official
changes are presented in these nations, it could harm the organization's capacity to work as it
does.

A model may be another information security guideline. On the off chance that significant
change implied that Amazon couldn't gather however much shopper information that it does, it
could hurt the business.

At the more outrageous finish of the range are antitrust regulations that could compel the
organization to separate its activities for contest.
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Strengths Weakness

Amazon.co
1. Systems for 1. Operating on slim
distribution that are margins
efficient 2. Online presence that
m 2. Dominating retailing
over the internet
is exclusive
3. Amazon
3. Cost leadership controversies

Opportunities SO Strategies WO Strategies

1. Grow operations over 1. Fresh services by 1. Aggressive PR

the web into new Amazon in SA and campaign
markets MENA 2. Amazon mini-stores
2. Develop presence 2. Amazon Kiosk book 3. Companies being
physically store sold Ad spaces
3. Options to pay online 3. PayPal payment

Threats ST Strategies WT Strategies

1. Internet security 1. Invest in state-of-the- 1. Web services and

2. Entry barriers to the
market being low
3. Strategic partnerships
and business alliances
art online security products as well as
systems Information
2. Products being technology
delivered on the 2. Programs for
same day community outreach
3. Expand partnerships by Amazon
with manufacturers, 3. Sellers being listed
publishers and Media fees
of Kindle
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SPACE MATRIX

SPACE FACTORS SCORE AVERAGE COORDINATES

Financial Position (FP)

Flow of funds +4

Profitability per share +2 +2.7

ROI +2

Stability position (SP) -1.0

Pressure from competitors -6

Barriers to entry into market -4 -3.7

Changes in technology -1

Competitive Position (CP)

Share of the market -1

Loyalty of customer -2 -1.3

The know-how in technological -1

fields +4.4
Industry Position (IP)

Potential of growth +6

Stability of the financial status +5 +2.7

Potential of profits +6
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Boston Consulting Group Matrix (BCG)

HIGH 1.0 Medium 0.50
Low 0.0

DIVISION REVENUES PERCENT PROFITS RELATIVE INDUSTRY

REVENUES MARKET GROWTH
SHARE RATE (%)

North $ 34,813 57% $8620 0.90 +15

America

International $26,280 43% $6502 0.70 +20

Total $61,093 - $15,122 - -

HIGH +20

INDUSTRY SALES GROWTH RATE

(Percentage)

STARS II Question Marks

I MEDIUM 0

CASH COWS III DOGS IV

LOW -20
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Internal-External Matrix (IE)

Strong Average Weak

3.0 to 4.0 2.0 to 2.99 2.0
3.0 1.0 to 1.99
THE EFE TOTAL
4.0 WEIGHTED SCORES

High I II III
3.0 to 4.0

Medium V VI
IV
2.0 to 2.99

Low
VII VIII IX
1.0 to 1.99

1.0

Grow and Build

• Integration
• Market infiltration
• Market growth
• item creation
• Reverse, linear, lateral
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Grand Strategy Matrix

RAPID MARKET
GROWTH
Quadrant 1

1. Global expansion
2. The industry's saturation
3. Product design
4. Forward incorporation
5. Reverse integration
6. Sixth, horizontal integration
WEAK 7. Associated diversity STRONG
COMPETITIVE COMPETITIVE
POSITION POSITION

SLOW MARKET
GROWTH
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Quantitative Strategic Planning Matrix (QSPM)

#1 New
Amazon
services in SA, #2 Paypal #3 Amazon
and MENA payments mini-stores

Weigh
Key Factors t AS TAS AS TAS AS TAS
Opportunities
1. Extend your internet business to
other countries 0.2 4 0.8 4 0.8 2 0.4
2. Create a tangible presence 0.1 1 0.1 1 0.1 1 0.1
3. Payment alternatives through the
internet 0.2 4 0.8 4 0.8 1 0.2
Threats
1. Online safety 0.2
2. The market entrance hurdle is
minimal. 0.1
3. Business ties and strategic alliances 0.2 4 0.8 4 0.8 2 0.4
Total 1
Strengths
1. Efficient distribution system 0.2 3 0.6 1 0.2 3 0.6
2. Dominance in online retailing 0.1 3 0.3 4 0.4 1 0.1
3. Cost Leadership 0.25 3 0.75 1 0.25 3 0.75
Weakness
1. Operating on slim margins 0.2 3 0.6 1 0.2 1 0.2
2. Exclusive online presence 0.15 3 0.45 4 0.6 3 0.45
3. Amazon controversies 0.1
Total 1 5.2 4.15 3.5
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Conclusion
Amazon needs to grow into the more affluent places. A viable technique is growing its cloud-
based offerings through AWS. Such development also shouldn't result in critical blunders, such
as the unveiling of the Kindle Fire. In this way, it may grow for growth and profit while
maintaining control over its core competencies.
Apart from that, Amazon can capitalize on the growing transportable company while also
focusing more on its Kindle digital books segment. Given that earnings from its Kindle division
was noticeably greater than that from its other businesses in the most recent couple of quarters, it
provides for reasonable business process. Complementing this with diverse trade could boost its
output in the long run.
In light of the investigation done on Amazon.com, it is enthusiastically suggested that they take
on the accompanying methodology:
They ought to lay out new tasks universally to give items and administrations in South America,
North Africa, and Middle East as well as extending current activities in Europe and Asia.

Pros Cons

Capture developing economies High initial investments

Capitalize on exponential growth of internet Foreign laws and regulations

users

First-mover advantage Need to develop new strategies alliances and

partnerships

Increased revenue to balance slim margins

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Reference
QuerySprout (2022). Amazon Target market (Age, Gender, Demographics, Salary + More).
https://querysprout.com/amazon-target-market/
Grace Baldwin (March, 2020). The Strategies Behind Amazon’s Success.
https://www.omniaretail.com/blog/the-strategies-behind-amazons-success
Samuel (October, 2021). How many Employees does Amazon have?
https://howigotjob.com/business-model/how-many-employees-does-amazon-have/
Mark Hall (April, 2022). Amazon.com. https://www.britannica.com/topic/Amazoncom
Mathew, S., & Varia, J. (2014). Overview of amazon web services. Amazon Whitepapers.