Professional Documents
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Amazon
De Montfort University
Group: Evington
Executive summary:
This report is conducted to examine Amazon’s strategy and factors that may affect on the
company before and after Covid-19 was escalating around the world. Report will include
overview of the Amazon, what happened to the company during the pandemic and what factors
4. Revenue sales
7. Conclusion
8. References
Amazon is one of the biggest companies of online purchase segment. It was found in 1994 as
a college textbook online platform. Due to the main constant offer over their evolving includes
better price, convenience and better selection, company has evolved into the corporation.
Amazon offers for their clients 4 main segments as devices and services, Amazon web services,
delivery and logistics and entertainment. Devices and services segment is contained of such
products like Alexa, Echo, Fire tablet, Kindle, Fire TV, Blink and Ring. These product
inventions are made by Amazon with the aim of combining both devices and services in one and
make technologies more accessible with a bigger value for the clients. Amazon web services is
the world’s largest cloud computing service which lets startups, leading companies and
customers to securely store and use their data instead of owning servers and data centers.
Amazon also offers delivering goods from their platform which combines various categories of
products from different stores, orders can be delivered by robots (Scout), airplanes and cars to
the doorstep. This segment is one of the most successful and demanding in Amazon, especially
due to the current situation with Covid-19. It is convenient for customers to shop online and get
their products without going out to the specific store, in addition Amazon Prime allows to have a
opportunity to access music, videos, games, streams on Twitch platform, TV shows and movies
(Amazon, no date). This report will discuss strategy of Amazon before and after situation due to
Covid-19 and examine effects of the pandemic on the structure of work and income of the
company.
The CEO and founder of Amazon Jeff Bezos has his mane strategy of continuous evolution
and exactly this evolution of offering various products and services online gave the opportunity
to the company to expand and build the company into franchises. Amazon has a generic strategy
of cost leadership in a broad market segmentation, also known as a Type 1 Strategy. The
definition of Type 1 strategy is when a company offers various services in the large market and
socioeconomic background (“Strategic Management”). Amazon follows the strategy totally, they
have a broad market segment globally and big range of products, the same situation with the
socioeconomic background. Although, this strategy has been effective for Amazon, but most of
their competitors can not imitate this strategy within their businesses. Because Amazon is
offering and adapting vast categories of products and services fast enough to have high interest
of customers and still make a big profit. Along with the cost leadership strategy company utilizes
differentiation, which is having more services and products than the competitors and delivering
these services in a fast pace. The third strategy that Amazon has is unrelated diversification, they
started entering existing market by offering textbook and now they have over 80 labels in
partnership, also one of the next segments that they enter is pharmacy. The company is in a
constant grow and has seen a substantial growth in revenues since 2016, there is a 27.66%
increase in revenues every year. Even though Alibaba is not at the level of Amazon, it is still one
of the largest competitors of Amazon along with the Walmart in the industry of online shopping
Covid-19 affected negatively on the global economy and caused crisis, more than million
people around the world died due to the virus. Lockdown in almost all counties due to the
pandemic affected different segments of businesses as well and e-commerce companies were not
an exception, lots of companies had to stop working because of the losses. However, Amazon
company managed pandemic without shutting down and made more profit in revenue, than
before. Consumers turned to the Amazon first for the essential products during Covid-19 like
hand sanitizers, face masks and disinfectants because of the empty shelfs in the stores due to
pandemic crisis. CommerceIQ stated that between February and March the toilet paper sales
increased up to 186% in Amazon, medicine for cough and cold increased to 862% from year to
year. While in the U.S. widespread unemployment was detected, Amazon was hiring more
people to manage orders from shoppers and deliver as fast as they can. So, they hired more than
175,000 new workers between March and April and in the three months they ended up hiring
36,400 more people. Amazon had to follow the rules to stop extreme fast spreading virus among
the workers in the warehouse, so they demanded from the workers distance, wearing face mask
and testing for the Covid-19 constantly (Palmer, 2020). At the end of July 2020 Amazon
announced that it had doubled its quarterly profits to $5.2bn in comparison with $2.6bn at the
same point in 2019. This shows that net sales were increased up to 40% (Harris, 2020).
Moreover, in September of 2020 Amazon introduced in their marketplace Luxury stores, which
is a long-lasting digital platform for luxury fashion. This platform was created in collaboration
with Luxury stores, also because of the Covid-19 pandemic. Because most of the luxury stores
were not digitally prepared to the pandemic, so they needed a platform for the further existence
In conclusion, Amazon before Covid-19 was already big company, especially on e-commerce
segment with its own mane strategy which is cost leadership. The company was always evolving
in their products and services to offer for the consumers lower price, fast delivering and big
range of goods. This strategy allowed Amazon to stay actual in all times and grow every year,
also even due to the pandemic company was working with its clients because of the increased
demand on essential products. This situation played a big role on Amazon’s net sales growth in
References:
2. Flamand, Olivia J.; Wisher, Aaron; and Riley, Shannon, "Strategic Plan: Amazon"
https://scholarworks.umt.edu/utpp/309
3. Harris J., (2020). How Amazon became a pandemic giant-and why that could be a threat
amazon-became-a-pandemic-giant-and-why-that-could-be-a-threat-to-us-all
4. Palmer A., (2020). How Amazon managed the coronavirus crisis and came out stronger.
CNBC. https://www.cnbc.com/2020/09/29/how-amazon-managed-the-coronavirus-crisis-
and-came-out-stronger.html
5. Watanabe C., Akhtar W., Tou Y., Neittaanmäki P., (2020). Fashion-driven textiles as a
https://www.sciencedirect.com/science/article/pii/S0160791X21001202