Subject - Strategic & Innovation Management

Learning Diary
Submitted To :Dr Divya Vyas

Submitted By: Amrutha V, Harshita Thakur, Kratika Jadwani, Nidhi Chadha, Shweta Gupta
MFM SEM-3
 About Amazon
Amazon.com is an American multinational technology company
based in Seattle.

Amazon was founded by Jeff Bezos in Bellevue, Washington, on

July 5, 1994.

Amazon’s prime focus is on e-commerce industry and online

retail market. However, the company also focusses on live
streaming, cloud computing, and artificial intelligence.

It is considered one of the Big Four technology companies, along

with its main competitors Google, Apple, and Microsoft.

Amazon surpassed one of its biggest competitors Walmart in

2015 and became the most valuable retailer in the United States
by market capitalisation.
Amazon Mission
"Amazon is guided by four principles: customer obsession rather than competitor focus, passion for invention, commitment to
operational excellence, and long-term thinking. Customer reviews, 1-Click shopping, personalized recommendations, Prime,
Fulfillment by Amazon, AWS, Kindle Direct Publishing, Kindle, Fire tablets, Fire TV, Amazon Echo, and Alexa are some of
the products and services pioneered by Amazon."

Amazon Vision
Their vision is to be earth's most customer-centric company; to build a place where people can come to find and discover
anything they might want to buy online.

Amazon Values
Customer Obsession
Ownership
Invent and Simplify
Learn and Be Curious
Hire the Best
The Highest Standards
Amazon.com change in Mission & Vision
When it first launched, Amazon’s had a clear and ambitious mission. To offer:

Earth’s biggest selection and to be Earth’s most customer-centric company. Today, with business users of its Amazon Web
Service representing a new type of customer, Amazon says:

This goal continues today, but Amazon’s customers are worldwide now and have grown to include millions of Con-sumers,
Sellers, Content Creators, Developers, and Enterprises. Each of these groups has different needs, and we always work to
meet those needs, by innovating new solutions to make things easier, faster, better, and more cost-effective.
 SWOT Analysis- Amazon
STRENGHTS
Strong brand name : As a global e-commerce giant, Amazon has a strong position and successful brand image in the
market.
Brand valuation : Amazon is ranked at #2 position , with a brand value of $249 Billion.
Customer oriented : Amazon caters to a large number of customers for everyday needs at inexpensive prices. This has
made it a customer-oriented brand.
Differentiation and Innovation : Amazon frequently brings creative ideas and innovative additions to its product line and
service offerings like ambitious drone delivery service and Withings Aura Smart Sleep System. This creates a
differentiation from other companies.
Cost Leadership : Amazon doesn’t incur costs in maintaining physical retail stores by selling everything online. With
economies of scale, it efficiently controls its costs and lowers its inventory replenishment time. The company has formed
numerous strategic alliances with many companies like Evi Technologies, Thalmic Labs, Shoefitr, The Orange Chef etc. It
has a strong value chain system which also helps in maintaining a low-cost structure.
Largest Merchandise Selection : Amazon owns extensive product mix which attracts online customers to make their
majority of purchases from it rather than other online retailers.
WEAKNESSES
Easily imitable business model : Online retail businesses have become quite common in this digital world. So imitating
Amazon’s business model for rival firms is not difficult. A few businesses are even giving Amazon a tough time. These
include Barnes & Noble, eBay, Netflix, Hulu, and Oyster etc.
Losing Margins in Few Areas : In few areas such as India, Amazon has faced losses. It’s free shipping to customers can
be one of the reasons that expose the risks of losing margins in some markets.
Product Flops and Failures : Its Fire Phone’s launch in the US was a big failure while its Kindle fire device didn’t even
grow well.
Limited brick-and-mortar presence : Amazon owns very limited physical stores. This sometimes hinders to attract
customers buy things which are not sellable on online stores.
Employee Treatment : The employees also said that they were forced to work overtime without pay. On top of that, the
employees were met with timed bathroom breaks and constant video surveillance in order to maximize the workflow of the
facility.
Unfair use of third party data : Engaging in unfair trade practices undermines trust and increases legal risks. Amazon is
facing antitrust charges in the European Union for collecting and using data from third-party to compete against them
Workplace Conditions: Amazon has also been on the news about their facilities conditions. Some of its employees voiced
their frustrations about the bad conditions in which they had to and continue to work.
OPPORTUNITIES
Amazon can gain the opportunity to penetrate or expand its operations in developing markets.
By expanding physical stores, Amazon can improve competitiveness against big box retailers and engage customers with
the brand.
Amazon has the opportunity to improve technological measures and organizational policies to reduce counterfeit sales.
One case of counterfeit sales came into light when Amazon sold a fake My Critter Catcher. The product was sold for $1
less than the original product.
More acquisitions of e-commerce companies can increase the company’s market share and reduce the competition level.
Launch of electric rickshaws in India : Amazon pledges to make a positive impact on the environment. With this vision
in mind, Amazon plans to deploy 10,000 electric rickshaws for delivery in India by 2025.
Personalized Shopper Service Hits Big : Amazon recently launched its incredible personal shopper service exclusively
for Prime members. So, if you have an Amazon Prime subscription, you can opt for the personal shopper experience giving
you access to the company’s team of professional stylists and fashionistas.
Plans to Enter the Crypto Stratosphere: There are a lot of speculations and rumors floating around the crypto
ecosystem. However, there have been reports by mainstream media outlets that Amazon does indeed plan to make a move
into cryptocurrency, stating that the company has developed a big appetite for digital currencies and blockchain. If the
retail giant does step into crypto-space and accepts virtual currencies as a payment option, there will be massive
opportunities for small businesses in the future.
THREATS
Government regulations can also threaten the business proceedings of Amazon in some critical countries. Amazon does
not ship to Cuba, Iran, North Korea, Sudan, and Syria.
Increasing cybercrime can affect the network security system of the company.
Fake Products : The increase in counterfeiting and fake products threatens Amazon’s profits. The company recently filed
a lawsuit against New York-based online retailer for allegedly counterfeiting Valentino shoes, a luxury Italian shoe brand
offered by Amazon.
Economic Recession : Amazon is not immune to an economic recession. If economic uncertainty worsens, it can impact
Amazon’s sales.
Fake reviews : Amazon has an overwhelming amount of fake reviews, and the problem has worsened in recent times due
to the pandemic. Product reviews are a critical indicator of quality and authenticity, and customers rely heavily on reviews
to make purchases.
Links to exploitative labor : Amazon is one of three retail giants facing scrutiny from the US State Department for
maintaining supply chains and labor sources associated with human rights abuses. This exposes the ecommerce giant to
reputational, economic, and legal risks.
Porter’s Five Forces Analysis of Amazon
1.Threat of New Entrant – LOW

No doubt it is easy to start an online retail store or an e-commerce website on the internet, but it would be difficult for any
brand to take on a giant such as Amazon.
It would require massive investments in warehousing, distribution, marketing, making user-friendly website, customer service,
logistics and many more

Switching Costs: It is easy to enter the e-commerce industry, and also it is easy to gain competitors, customers, because of
the low switching costs in the market.

Economies of scale: Amazon has an advantage over other brands on economies of scale because of the reputation of being
the largest internet retailer in the market.

Customer Loyalty: Amazon gets the advantage of being the first big player in the e-commerce industry.
2. Bargaining power of buyers – HIGH
Amazon highly emphasises on customer satisfaction and aims in providing high value to its customers.
Amazon runs a customer-centric approach in its e-commerce business. It guarantees that the company’s products are of
high quality and, received on time.
Customers generally have high bargaining power because of the intense competition in the e-commerce industry.
Customers tend to be price sensitive. If Amazon does not provide its customers with high-quality service at the best price,
they will go for its substitute in the market.
The advantage for Amazon is its capability of providing high range product with millions of choices for its customers at
minimum cost with the best customer experience.
It is difficult for any other brand to reach this level. So, it becomes tough for the buyers to find such level of experience
elsewhere.
3. Threat of substitute – HIGH

Amazon competes with substitutes in the online retail as well as with the offline retail market.
The biggest hurdle that Amazon faces is low switching cost in the industry, as customers can easily change from Amazon
to other retailers.
As Amazon does not sell unique products, and most of the products are retail products, so giving the best customer
experience becomes a necessity for the company.
And a single bad experience will drive the customers away from Amazon because of the easy availability of substitutes at a
cheap rate.
Thus, the High threat of substitute in the porter’s five forces analysis of amazon shows that Amazon highly focusses on
customer experience to attain success in the online retail industry.
4. Bargaining Power of Suppliers – LOW TO MODERATE

Suppliers provide Amazon with the products that it needs for its e-commerce business.
The influence of suppliers in the e-commerce business is more because without them, the retailers will not be able to serve
their customers.
But Amazon is the most prominent player in the industry and has the upper hand over its suppliers.
No doubt there are many suppliers working with Amazon, but they must follow strict rules and regulations laid out by
Amazon.
If Amazon sells a product whose suppliers are in small proportion, then the power suppliers increase moderately, because
there is less competition among the suppliers.
Amazon strictly emphasises on the ethical working of its suppliers, and it is tough for the suppliers can even think of the
forward integration in the supply chain.
So, based on the porter’s five forces analysis of Amazon, the external factors show us that suppliers have low to moderate
power in the industry.
5. Competitive Rivalry – MODERATE TO HIGH
Amazon competes against strong competitors and, the rivalry in the online retail industry is high.
Because in recent years, the number of players entering the industry has increased with many retailers, small scale brands,
and startups are starting to sell their products online.
The main competitors of Amazon are Walmart, Flipkart, Alibaba, eBay and many more. All these players give intense
competition to Amazon.
Low switching cost and readily available substitutes put more pressure on Amazon because customers can transfer from
one to retailer to other at low cost.
So, Amazon invests a large amount of providing high-quality products and services to its customers and gains advantage
on other players.
Because no other player in the market can invest such a large amount as Amazon does. So, Amazon has consistently
retained its position of being the market leader of the e-commerce industry.
Amazon - Ansoff's Matrix
The Ansoff matrix is a strategic planning tool that
provides a framework to help executives, senior
managers, and marketers devise strategies for future
growth

Each box of the Matrix corresponds to a specific

growth strategy. They are:
1. Market Penetration – The concept of increasing
sales of existing products into an existing market
2. Market Development – Focuses on selling
existing products into new markets
3. Product Development – Focuses on introducing
new products to an existing market
4. Diversification – The concept of entering a new
market with altogether new products
1. Market Penetration
Market penetration encourages organisations to sell their existing products to their existing markets. Amazon has been using this
strategy since its inception. In fact, it uses it very aggressively by employing a number of marketing techniques such as
advertising on multi-media, and sales promotions. The two actions of Amazon that count in market penetration are:

Big billion sale

Amazon prime membership

2.Product development
Product development is the next strategy to be analysed in the Ansoff Matrix in Amazon. Amazon started as an online bookstore
in 1997. Since then, it has been adding new products in its portfolio aggressively. In fact, it now sells virtually everything on its
site. Not only books, Amazon has developed many more products as follows:
Web series
Private labels (solimo, amazon basics)
Alexa
Kindle
Amazon Firestick
Amazon Pantry
Amazon Go
3. Market development
Market development is about exploring new markets to sell the current products. Amazon has developed a massive number of
new markets over the years. Its products are shipped to over 100 countries and territories outside of the United States (Delfino,
2020). Its biggest markets are the USA (home market), the UK, Germany, and Japan (Coppola, 2021). It also has focused on
the following things for market development:

Inviting sellers to sell on website

Website for India in hindi
Also available in different regional languages

4. Diversification
Diversification is a very risky strategy as it involves developing new products to sell to new markets that were never catered
for. Amazon understands the challenge and has invested billions of dollars to implement its diversification efforts. They have
diversified their brand in the following areas:
Clothing Payments
Books Groceries
OTT Electronics
Cloud services Medical
Telecom
 BCG Matrix
The Boston Consulting group’s product portfolio matrix (BCG
matrix) is designed to help with long-term strategic planning, to help
a business consider growth opportunities by reviewing its portfolio
of products to decide where to invest, to discontinue, or develop
products. It's also known as the Growth/Share Matrix.
The Matrix is divided into 4 quadrants based on an analysis of
market growth and relative market share, as shown in the diagram
on the right.

Dogs: These are products with low growth or market share

Question marks or Problem Child: Products in high growth
markets with low market share
Stars: Products in high-growth markets with high market share
Cash cows: Products in low growth markets with high market
share
BCG Matrix of Amazon

Star Question Mark

Cow Dog
1. Prime Video - Prime Video is getting close to surpassing Netflix in popularity, according to new data. In 2022, Netflix lost 2%
in streaming video market share in the U.S. in Q2, according to JustWatch, and now accounts for 21% of the domestic
streaming market. Amazon gained 1% during the same quarter, reaching a market share of 20%. Netflix once wanted to become
HBO before HBO became Netflix. Now, it seems like Amazon is becoming Netflix before Netflix has a chance to become more
like Amazon’s video empire. Hence, it falls under the star category.
2. Amazon Pay - Amazon Pay registered 0.8% of the UPI market share in 2021 registering transactions worth INR 60,962 Cr. On
the other hand, in October 2021, Paytm recorded transactions worth INR 80,508 Cr. Once again, PhonePe led the UPI numbers
with INR 3.94 Lakh Cr transactions. Google Pay maintained its second lead with INR 3.03 Lakh Cr transactions. Next in line
were Paytm (with transactions worth INR 88,094 Cr); Amazon Pay (with transactions worth INR 6,641 Cr) and WhatsApp Pay
(with transactions worth INR 188 Cr). Amazon Pay has been rated #4 Software in Payment Processing and its market share is
4.96% and is a cash cow for Amazon.
3. Amazon Kindle - With indie books (published without ISBNs), the Amazon market share accounts for 83% of US ebook
purchases. The rest is almost entirely shared between Apple Books, Barnes & Noble, Kobo, and Google Play Books. Amazon
Kindle is the Cash cow for Amazon
4. Amazon Music - Spotify controls 31% of the global music streaming
market, more than double that of its nearest rival. Apple Music has a 15%
market share, Amazon Music and Tencent Music each have a 13% market
share. YouTube Music is the fastest growing service for the second year in
a row now with an 8% market share. Although the music industry is
growing, but due to the growing competition, Amazon music is currently
in the Question Mark category
5. Amazon AWS and Cloud - Right now, AWS market share is about 10.79% of the web hosting industry. It has become
one of the second leading Web hosting software providers after GoDaddy and fall under the Star category

6. Amazon Drive - Amazon Drive will be discontinued on 31st October, 2022 and will be removed from iOS and Android app
stores but people will be able to download thier files by the end of 2023. Therefore this will fall under the dog category currently.
7. Amazon Business - According to 2021 stats, Amazon's marekt share is as large as 40%, making it undoubtedly the most
prominent online retailer in the US which is the reason why Amazon business falls under the star category
8. Amazon Alexa - Amazon is a leading vendor in the global smart speaker market, having a market share of 26.4% in the third
quarter of 2021 and hence is a star category product for Amazon. Google is its closest competitor with a share of 20.5%.
9. Amazon Go - Amazon, in 2019, plans to close 68 brick and mortar bookstores, pop-ups and shops carrying toys and home
goods in US and UK. Amazon now wants to focus more on its grocery markets and departmental stores
10. Amazon Luna - Luna was announced on September 24, 2020, and falls under the Question mark category as it has a strong
potential to grow.
Mission of W :
In 2001, Aim of W was to fill the gap by providing contemporary Indian ethnic
wear in organized retail format.

By 2022, they plan to grow nationally and globally while also cater to a large
group of people through both retail and e-commerce presence.

Vision of W:
At first W wanted to become the most preferred fashion brand for modern Indian
woman.

Today, It is the first fashion brand which caters to Indian women sizes in 7 sizes
instead of 3.
Mission of Provogue
In 1997, Provogue's mission was to make beautiful cloths so that their
collection attracts people from around the world.

By 2020, the company plans to tap the potential in mini metros

through formats of studios which are of 500 square feet in size. It
plans to have 272 studios all over the country from the present 32
stores.

Vision of Provogue
In 1997. Vision of Provogue was to evolve into a retail-centric group
of branded businesses focussed on customer needs.

By 2025, The brand will be taken to countries like Sri Lanka,

Bangladesh, Hong kong and Singapore.
 Integration Strategies
Vertical Integration

Vertical integration means that a firm assumes control over more stages in the value chain.
Amazon has been taking vertical integration to a whole new level. The operational model of Amazon is to do vertical
integration using its scale. First Amazon starts using the services itself. Over a period of time, Amazon builds operational
efficiencies in these services. Once these services have a competitive advantage over similar other services, Amazon
offers them to other corporations and users. This model has been wildly successful and has been instrumental in making
Amazon the giant that it is today.

Examples :
1.Amazon Web services : Amazon has also developed one of the best cloud computing ecosystems. Amazon’s business model
has traditionally relied on the use of computing technology to gain better insights into customer behavior. As a result, Amazon
acquired a lot of storage space, databases and created other applications for its own use.

2.Delivery services : Amazon has recently announced its intention to launch its delivery business. This has sent the shares of
companies like UPS and FedEx into a tizzy. After all, Amazon is the master of innovation. It has been working on
technologies like drone deliveries to reduce the cost of its operations
Horizontal Integration
Horizontal integration is a merger between two companies operating in the same industry. These companies are
usually competitors and merge to gain higher market power and economies of scale. Other motives include a larger
customer base, higher pricing power because of increased market share, and lower employment costs, as the top
management of the merged entity, is lower than the two merging entities combined.
 PESTEL analysis
PEST analysis is a strategy carefully designed for business growth and expansion. Similar to SWOT analysis, this
framework provides companies a general overview of their strengths and weaknesses analyzing various factors
that determine the success of the particular organization.
In this Amazon PESTEL analysis, it gives the detailed explanations of why Amazon can stand out in such fierce
competitions from six perspectives.

Background of Amazon
Amazon is an e-commerce giant that has made it big in the retail market. Over the years, Amazon has expanded
its business and has also been involved in cloud computing, digital streaming, and more. The firm has made its
mark on e-commerce. Despite having a stable position in the market, this multinational technology company
deals with increasing competition in the field. Amazon PESTEL analysis helps the company to study the remote
macro-environment and steadily deal with the competition. It also helps them identify their drawbacks and work
on improving customer experience.
 Amazon PESTEL Analysis
The various factors that PESTEL analysis includes are- Political, Ecological, Social, Technological, Economical
and Legal
 Political Factors:
The government, its policies, and its rules determine the growth of an
organization in any given state or country. It includes tax rules and
regulations, corruption, foreign trade policy, labor law, and all these
components are the political factors of a PESTEL analysis.

It studies the government intervention and the scope of the industry at

flourishing in that particular area.
Governmental support cybersecurity and smooth operation of e-commerce,
which favors Amazon's business. Moreover, the political stability of
developed countries works in favor of Amazon.
The growing popularity of the online retail business is a result of
governmental encouragement. However, this growing industry of online
retailing can also prove to be a risk for Amazon facing tough competition
from big brands, especially foreign companies making their way into online
retail.
 Ecological Factors:
Challenges like pollution, climate change have raised more concern
about environmental factors. The ecological factor examines if the
company stands a good chance of thriving considering its ecological
sensitivity. Companies that focus on environment-friendly products
and services, utilize renewable energy, and think about a sustainable
future have an additional benefit.

According to PESTEL analysis, Amazon has growth opportunities

assessing its ecological factor. Its increasing interest in environmental
programs, promotion of business sustainability, and low-carbon
lifestyle and waste management strategies could enhance its growth
opportunities.
 Social Factors:
Understanding consumer behavior leads to an understanding of the
need and demand of products. Primarily it is determined by the
socio-cultural background of a place. Social factors like people's
cultural change, education level, population help companies assess
the potential market.

Amazon depends on technology to replace employees. The rate of

decreasing job opportunities can be a threat for the company in
terms of social factors.
On the other hand, the growing tendency of online shopping and
increased consumerism will benefit the company. Easy availability
of products and doorstep delivery are some reasons behind the
popularity of Amazon among the young ones and aged people for
whom leaving home is a concern.
 Technological Factors:
Technological advancement is another crucial factor in determining an
organization's strengths and weaknesses. Automation, technical
innovation, change, and technical awareness are the factors that help
companies to plan for their future intelligently. It guides them to adopt
new technologies, plan their manufacturing, logistics, and distribution.

The expansion of operations of Amazon has led it to face challenges even

from the technology firms. Amazon's innovative and creative ways to
reach out to its customers are unparalleled. They are ever exploring new
and effective ways of shipping and delivering packages.
The live chat option makes them easily accessible. Therefore, Amazon
has plans to hire more people for technological advancement. It will help
them to ensure a better customer experience.
 Economic Factors:
Economic factors are directly related to the company's revenue.
It includes unemployment rates, interest rates, raw material
costs, and more. This factor gives the company an idea about the
consumer's purchasing power and plans price, products, and
services accordingly. It directly influences the company's
profitability.

Though Amazon has extended its services worldwide with the

help of government aid, the taxes remain a constant challenge
with its ever-changing number, especially in Asian countries.
The large variety that Amazon offers attracts consumers even
when they are not seeking something expensive. In developing
countries, economic stability has growth opportunities for
Amazon.
 Legal Factors:
Legal factors similar to political factors deal with rules and
regulations. Organizations must abide by the laws such as industry
regulation, health & safety of the employees, consumer law, and
more to have thorough knowledge about the dos and don'ts of
operating in a particular area.

While expanding its wings worldwide, Amazon abides by the rules

and regulations. It focuses on cybersecurity, keeping the safety of
the consumers in mind.
Efforts such as complicating the environmental protection
regulations have helped it to strengthen the brand image. Besides
this, changes in the import and export policies will lead the
company to face challenges from the competitors easily.
Key Takeaways

For competitive advantage, companies must carry out PESTEL analysis on an interval of 6 months to measure
the effectiveness of their strategies in the changing environment. Through PESTEL, the company can identify
its threats and determine the opportunities assessing all the macro-environmental factors. Amazon PESTEL
analysis points out the key issues that might pose a problem in it also helps in producing strategies that will
help achieve its long-term goal. At the same time, it highlights the factors such as technological and social that
will help the top player to hold its place in the online retail market.

Use EdrawMax Online to create a PESTEL analysis diagram, or create any other diagram with ease! There are
massive PESTEL templates and symbols to choose from, and creating a PESTEL analysis diagram could be
really simple. Also, you can find substantial PESTEL templates in our template community to have a quick
start.
 Strategic Innovation?
Strategic Innovation is the creation of growth strategies, new product categories, services, or business models that change
the market and generate significant new value for consumers, customers, and the organization. Strategic Innovation takes
the road less traveled – it challenges an organization to look beyond its established business boundaries and to create
possibilities in an open-minded and creative environment. It has been seen that focusing on the short-term aspects typically
yields short-term results, however, firms seeking to make significant breakthroughs identify both, big and innovative ideas.

Strategic Innovation calls for a holistic approach that operates on multiple levels. First, it blends non-traditional and
traditional approaches to business strategy, deploying the practices of “Industry Foresight”, “Consumer/Customer Insight”
and “Strategic Alignment” as a foundation, and supplementing them with more conventional approaches and models.
Second, it combines two paradoxical mindsets: expansive, visionary thinking that imaginatively explores long-term
possibilities; and pragmatic, down-to-earth implementation activities that lead to short-term, measurable business impact.
Strategic Innovation can thus be defined as a framework of interdependent content, process, and context dimensions,
the application of creativity and innovation to strategic management enabling strategic differentiation and competitive
advantage, challenging conventional logic and redefining the company’s business model, creating new markets and
value improvements for customers and the company itself. Strategic innovation leads to either: new business models
(including a new value chain architecture), or new markets (either by creating new ones or reshaping existing ones),
or increased value for both the customer and the company, or a combination of these three.
 Dimensions of Strategic Innovation

The Strategic Innovation framework weaves together seven dimensions to produce an assortment of outcomes that
drives growth. The dimensions include:

A Managed Innovation Process

Strategic Alignment
Industry Foresight
Consumer / Customer Insight
Core Technologies
Organizational Readiness
Disciplined Implementation
1. The Managed Innovation Process covers the sequence of activities
from the beginning of a scheme through implementation combining
traditional and non-traditional approaches to Business Strategy. As a
team-based framework, the approach includes part information
exchange, part exploration, part mediation, part creative invention, and
part improvement thereafter. The Innovation process is divided into
two broad modes of thinking: Divergent and Convergent.

Divergent thinking lies at the heart and is open-minded, probing,

and curious, deploying non-traditional, creative thinking and future
visioning techniques. If not impatient for short-term success then
the divergent mode opens the door to the possibility of identifying
breakthroughs.
Convergent mode includes the traditional business tools,
techniques, and data analysis, potential opportunities are looked
into and prioritized, refined, and then often moved through a
formal decision-based stage-gate procedure until the most
promising ones are implemented.
2. Strategic Alignment is the process of engaging a short-term leadership team, a broad cross-section of the
organization, and key external stakeholders in the development of a shared vision. Strategic Alignment can be of two
types: Internal Alignment and External Alignment. In the case of the Internal Alignment the Internal Team of the
Organization will drive an innovative initiative while in the case of External Alignment, the team has to gather
insights from partner organizations by formally making them a part of the co-creation process. This is called an
Extended Team which includes representatives from the organization’s supplier, channel, manufacturing, or
packaging partners.

3. Industry Foresight is a top-down approach that explores the drivers, trends, enablers, and dislocations within one
or more industries. By this step an organization can develop a compelling, proprietary view of the future, enabling it
to then define a well-grounded and pragmatic participation strategy.

4. Customer Insight is a qualitative, bottom-up approach that leverages insights into the behaviors, perceptions, and
needs of the current and potential consumers/customers by involving them as true partners in the innovation process.
Though Consumer /customer participation in corporate strategy is not very usual, there is a tremendous opportunity in
involving consumers/customers ( and suppliers and other external stakeholders etc.) as true partners in the innovation
process by adopting a Customer / Consumer Insight approach. This approach is not limited to Consumer / Customer
but can be extended to channel partners, employees, investors, early adopter non-users, etc.
5. Core Technologies – After having a clear idea of a Consumer Customer’s needs it is not only essential to consider
the organization’s technologies but also other capabilities that are integral to success. Such competencies include
intellectual property or patents, unique relationships with suppliers and partners, brand equity, speed, and operational
agility, or unique business process. Innovation must have a tight link to core competencies. The significant
opportunities by partnering, outsourcing, or acquiring new technologies and competencies must be considered for
innovation.

6. Organizational Readiness has its importance in the innovative or convergent stage. It mainly refers to the ability
to act upon and implement innovative ideas and strategies and to successfully come to grips with the operational,
political, cultural, and financial demands that will follow. Organizational Readiness has three dimensions:

Cultural Readiness – Cultural readiness refers to the mindset and norms that allow individuals and teams to think
imaginatively, take prudent risks, and seek out, create and introduce innovative solutions.
Process Readiness – Process readiness refers to the general business process and practices that enable functional
groups to operate effectively and collaborate toward a common goal.
Structural Readiness – Structural readiness refers to the organizational structures and technologies that support
innovation as well as levels of flexibility to assign qualified staff to high-priority projects.
7. Disciplined Implementation includes transition to specific projects or programs, technical product development
and design, brand development, building a business case, developing marketing and channel strategies, defining
evaluation criteria, developing new business processes, hiring and training, and establishing feedback loops for
continuous improvement to the innovation process.
 The Blue Ocean Strategy of Amazon
Ocean, when remains blue, seems soothing to businesses but it is the most
complicated milestone to achieve.
In a blue ocean mostly Monopolies dominate due to their unmatchable
product/service capabilities, value propositions, product differentiation and
relatively low pricing achieved after the economy of scale.
Amazon created its Blue Ocean with Kindle where competition became
irrelevant due to the value offered at the unmatchable price.
For now, AWS(Amazon Web Services) complements the Blue Ocean
Strategy of Amazon where competition is catching up but still, Amazon
remains the topmost Cloud Services Company.
Certainly, you need capital, R&D, workforce to get a Blue Ocean of your
own but the most important aspect “Intent” makes the going easier.
 The Red Ocean Strategy – Amazon

There is no bloodshed in the blue ocean but the Red Ocean is all
bloody and messy with the cut-throat competition. Here the market
decides the price which is irrelevant to the value provided and every
player tries to beat the competition with low pricing and push
marketing strategies.
Blue Ocean was already bad for many as Amazon had the monopoly
there but when Amazon entered the Red Ocean as well every other
giant started to sharpen their knives.
BEST STRATEGIC DECISION TAKEN BY AMAZON

Amazon.com, Inc. is an American multinational technology company which focuses on e-commerce, cloud
computing, digital streaming, and artificial intelligence. It has been referred to as "one of the most influential
economic and cultural forces in the world", and is one of the world's most valuable brands.

Amazon is one of the world’s biggest and also, without any doubt, one of the world’s leading retailers. Also,
Amazon remains ahead in the e-commerce market in the U.S. and in the rest of the world.

Jeff Bezos, the founder of Amazon, started the venture as an online book retailer on July 5, 1994, but the
business has expanded over the years to sell almost anything one can think of and is now one of the most
valuable companies in the world.
AMAZON CHANGED THE WORLD
 PROBLEM TURNED INTO OPPORTUNITY

Amazon went public in 1994. It began selling music and videos in 1998, and began international
operations by acquiring online sellers of books in the United Kingdom and Germany.

The main issue was the consumers saw amazon has a brand for buying books and music and not has a
one stop shop for all the products initially.

Along with exponential growth comes expansion of the range of competitors, Amazon had to expand
into more verticals, its sheer number of competitors had exploded, and they were attacking Amazon in
ways that are both big and small.

That is when amazon came up with Amazon Prime

Amazon Prime is one of these innovative and visionary thoughts that became action. Launched as a loyalty program
in 2005, Amazon Prime has made it both easier and cheaper to be a customer at Amazon. In a relatively short time,
Amazon Prime changed Amazon from being a traditional transaction-based e-commerce business to a unique and
successful subscription business.

When Amazon Prime launched in 2005, it was introduced as an annual membership providing members paying 79
USD a year, free two-day delivery on more than 1 million of Amazon’s different products. Now, 17 years later, a Prime
membership costs 99 USD yearly or 10.99 USD monthly, but in return, the selection of products – still delivered with
no cost – is now more than 15 million. In accordance, the Prime that we experience today contains far more benefits
for customers than it did 17 years ago. 200 million users so far.
 AMAZON PRIME – THE WORLD’S MOST SUCCESSFUL SUBSCRIPTION

BUSINESS?

The Development of Prime Amazon Prime began as a service that

offered its customers free two-day delivery. Since then, Prime has
been continuously developed and expanded, and today the
service is much more than just free delivery.

Free two-day delivery- This was where it all started. For six years,
Prime was solely a free two-day delivery service and it was, for
the subscribers, a genuine success. It was possible to get free
delivery with your purchase, if you ordered for more than 25 USD
and was not a Prime subscriber - but as a Prime subscriber you
could order anything you wanted without paying for the
transportation. Of course, you indirectly paid for the load - in the
form of the yearly payment - but at the end most customers
saved more on the free transport than he or she paid in the
subscription sum.
 THE MAIN STRATEGY

The long-term strategy behind Prime Even though the current Prime program appears to be a huge success for
Amazon, the company is far from finished with developing and transforming the future of the retail industry in
the US and around the world.

The development of Prime, as we know it today, is just the first step in a strategic plan that aims to
fundamentally change the relationship between e-commerce and physical stores.

The second step in Amazon's strategy has been an expansion of the already large and complicated machine of
logistics. In the US, Amazon already has more than 100 large fulfilment centres, i.e. huge warehouses and
distribution centres from where Amazon can reach all major populated areas in the US within a few hours’
drive. Outside the US, Amazon has more than 50 fulfilment centres, mainly in Europe. The plan is that these
distribution centres should operate the majority of Amazon's customers with a same-day delivery service.
 PRIME FREE- SAME-DAY DELIVERY

According to a report from Business Insider, it has been expected that the market for same-day delivery in the US
would explode in the coming years. Unsurprisingly, Amazon has beaten this speculation to the punch by already
implementing a free same-day delivery for Prime members in eligible zip codes in the US and other countries.

The "Holy Grail" in e-commerce is same-day delivery - that is, when the goods are delivered to the consumer the
same day that he or she ordered them, and often within a few hours after ordering. Therefore, the biggest change in
the relationship between e-commerce and physical stores has been expected to happen, when the time that passes
from the customer orders a product until it is delivered is so short that it is not worthwhile for the consumer to pick
up the product himself or herself. Amazon is currently contributing to this change and is trying to change the
distributing model.
 PRIME INSTANT VIDEO
The video service competes with some relatively big
players including Netflix, Hulu and HBO.

Prime Instant Video is a huge success, especially with

reference to getting users to subscribe to Prime or getting
users to continue to stay with Prime As for the video
service's importance in relation to the rest of the service,
some studies show that members, who watch videos on
the streaming service, renew their membership far more
often than those, who do not use the video service, and
that those who use the streaming service during their 30-
day trial period are more likely to convert to the full
version of Prime.

Recently, Amazon Prime Video has become available to

all Amazon users, as a standalone option for 8.99 USD a
month after a 30-day free trial. In this way, Amazon
directly challenges competitors like Netflix, who offers its
standard service for 9.99 USD a month.
Amazon Cloud Drive is Amazon's "cloud storage"; Amazon's response to Dropbox. Here, users
can store files from their computers, so that it has a backup and so that the computer memory
does not get filled up. In addition, as a Prime user one gets just that extra thing - you get an
unlimited photo storage with Amazon Prime Photos. This photo storage service was added to
Prime in 2014 and the service gives Prime users a direct backup of their images on their
phones, which is also unlimited, and which reportedly receives the vast majority of image
files.
The photo storage gives all users of Amazon Prime a sensible reason not to use Dropbox, and
in this way, increases its own lever on the different customer segments.
 AMAZON DASH

The Dash Button is one of the most recent initiatives launched

by Amazon, which is a WiFi connected button that, when
pressed, instantly purchases or reorders a product from
Amazon. The Dash Button is linked to a product of your choice,
so that when you are running low on products, such as washing
powder for your washing machine, toilet paper, dishwashing
tablets, coffee, hand lotion you simply press the button.
Essentially, this service is exclusively for Prime members, and
seems as another attempt for Amazon to handcuff its
members into its Prime subscription service.

This service is about ultimate convenience for consumers, who

can choose between more than 40 brands, such as Air Wick,
Ariel, Dettol, Vanish, Gillette, and Nescafé.
 PRIME DAY

Prime Day was launched by Amazon Prime its one-day sale event, Prime Day, which is meant to reward Prime
subscribers with exclusive deals ranging from deals on electronics, such as tablets, TV and laptops to clothing,
shoes, jewellery, kitchenware and so on. Strategy here was to sell out the old stocks as well as Trendy products.

Amazon Prime Day 2016 was supposedly the ‘biggest day in the history of Amazon.

Amazon has shipped 60 per cent more products worldwide compared to Prime Day 2015, with a 50 per cent boost in
its home territory of the US.
Amazon Prime Air is all about air delivery via drones. The project seems viable, since 86 per cent of
Amazon’s parcels actually weigh less than a drone can carry. For Amazon, it would provide an opportunity
to economise the person delivering the packages. For the subscriber, it would not just be a great
experience to have your package delivered through the air, but in the long run it would probably also be
the fastest delivery. Amazon prime Air has been helpfull in the Covid times.
 AMAZON FRESH/ PRIME FRESH

Amazon's entry into the market for groceries this means to

achieve the strategic goal which called AmazonFresh.
AmazonFresh and PrimeFresh AmazonFresh is a service that
delivers groceries - and other items - directly to the customers’
doorstep the same day as the goods are ordered or the following
morning. A assortment of about 100,000 items are offered in
certain postcodes in the US and now in other countries.

The goal of PrimeFresh is of course the obvious: To get

customers, who are used to buy once or twice a month, to buy
once or twice a week or, if possible, even more often. The
mission appears to succeed, because just as with Prime, Amazon
is experiencing that members of AmazonFresh are not only
buying more, but also more often than non-members, just as
PrimeFresh members purchase more than the regular Prime
members.
 CONCLUSION

Amazon uses "bundling" as a key strategy by adding more and more services and more and more content to
Prime. Besides delivery, members also have access to music, movies, data storage, and much more as part
of the subscription. It is no coincidence that the number of Prime members has grown explosively in recent
years, where total services of Prime has also risen.

Amazon uses a very deliberate strategy that concerns tying members even closer to the services and
providing customers with an experience of value-for-money. Once the many services are being used, it is
much harder for the customer to leave the services again. For example, research shows that new Amazon
Prime members, who use video service in their free trial period converts in higher rate than those, who do
not use this part of the service. So the many built-in services help both in terms of new sales, conversion
and retention.

Market Share of amazon has been increasing due to the fact that they have taken the best strategic
decisions and business ideas and innovations and first mover advanatge has always been Amazon's goal.
 The initial success of Amazon was lightning quick as without taking any help from the press for
promotions, it was still able to sell books across 45 countries in just two months.

From starting up as an online marketplace for books, it went on expanding its offerings. Now
Amazon sells almost anything and everything on its platform and has a presence in 200+
countries. It has more than 40 subsidiaries under its umbrella which includes the likes of
Audible, Twitch, IMDb, and Amazon Web Services.

Amazon India is the largest online smartphone channel with a 47% market share. Amazon is
offering 168 million products to its customers in India.

Competitors:
Ali baba : Bulk orders for cheap prices
Flipkart : Bought online e-commerce to india but amazon gives best user experience
Walmart: It has more product diversification related to consumer goods as compared to Amazon
AMAZON CHANGED THE WORLD
 PROBLEM TURNED INTO OPPORTUNITY

Amazon went public in 1994. It began selling music and videos in 1998, and began international
operations by acquiring online sellers of books in the United Kingdom and Germany.

The main issue was the consumers saw amazon has a brand for buying books and music and not has a
one stop shop for all the products initially.

Along with exponential growth comes expansion of the range of competitors, Amazon had to expand
into more verticals, its sheer number of competitors had exploded, and they were attacking Amazon in
ways that are both big and small.

That is when amazon came up with Amazon Prime

Amazon Prime is one of these innovative and visionary thoughts that became action. Launched as a loyalty program
in 2005, Amazon Prime has made it both easier and cheaper to be a customer at Amazon. In a relatively short time,
Amazon Prime changed Amazon from being a traditional transaction-based e-commerce business to a unique and
successful subscription business.

When Amazon Prime launched in 2005, it was introduced as an annual membership providing members paying 79
USD a year, free two-day delivery on more than 1 million of Amazon’s different products. Now, 17 years later, a Prime
membership costs 99 USD yearly or 10.99 USD monthly, but in return, the selection of products – still delivered with
no cost – is now more than 15 million. In accordance, the Prime that we experience today contains far more benefits
for customers than it did 17 years ago. 200 million users so far.
 AMAZON PRIME – THE WORLD’S MOST SUCCESSFUL SUBSCRIPTION

BUSINESS?

The Development of Prime Amazon Prime began as a service that

offered its customers free two-day delivery. Since then, Prime has
been continuously developed and expanded, and today the
service is much more than just free delivery.

Free two-day delivery- This was where it all started. For six years,
Prime was solely a free two-day delivery service and it was, for
the subscribers, a genuine success. It was possible to get free
delivery with your purchase, if you ordered for more than 25 USD
and was not a Prime subscriber - but as a Prime subscriber you
could order anything you wanted without paying for the
transportation. Of course, you indirectly paid for the load - in the
form of the yearly payment - but at the end most customers
saved more on the free transport than he or she paid in the
subscription sum.
 THE MAIN STRATEGY

The long-term strategy behind Prime Even though the current Prime program appears to be a huge success for
Amazon, the company is far from finished with developing and transforming the future of the retail industry in
the US and around the world.

The development of Prime, as we know it today, is just the first step in a strategic plan that aims to
fundamentally change the relationship between e-commerce and physical stores.

The second step in Amazon's strategy has been an expansion of the already large and complicated machine of
logistics. In the US, Amazon already has more than 100 large fulfilment centres, i.e. huge warehouses and
distribution centres from where Amazon can reach all major populated areas in the US within a few hours’
drive. Outside the US, Amazon has more than 50 fulfilment centres, mainly in Europe. The plan is that these
distribution centres should operate the majority of Amazon's customers with a same-day delivery service.
 PRIME FREE- SAME-DAY DELIVERY

According to a report from Business Insider, it has been expected that the market for same-day delivery in the US
would explode in the coming years. Unsurprisingly, Amazon has beaten this speculation to the punch by already
implementing a free same-day delivery for Prime members in eligible zip codes in the US and other countries.

The "Holy Grail" in e-commerce is same-day delivery - that is, when the goods are delivered to the consumer the
same day that he or she ordered them, and often within a few hours after ordering. Therefore, the biggest change in
the relationship between e-commerce and physical stores has been expected to happen, when the time that passes
from the customer orders a product until it is delivered is so short that it is not worthwhile for the consumer to pick
up the product himself or herself. Amazon is currently contributing to this change and is trying to change the
distributing model.
 PRIME INSTANT VIDEO
The video service competes with some relatively big
players including Netflix, Hulu and HBO.

Prime Instant Video is a huge success, especially with

reference to getting users to subscribe to Prime or getting
users to continue to stay with Prime As for the video
service's importance in relation to the rest of the service,
some studies show that members, who watch videos on
the streaming service, renew their membership far more
often than those, who do not use the video service, and
that those who use the streaming service during their 30-
day trial period are more likely to convert to the full
version of Prime.

Recently, Amazon Prime Video has become available to

all Amazon users, as a standalone option for 8.99 USD a
month after a 30-day free trial. In this way, Amazon
directly challenges competitors like Netflix, who offers its
standard service for 9.99 USD a month.
Amazon Cloud Drive is Amazon's "cloud storage"; Amazon's response to Dropbox. Here, users
can store files from their computers, so that it has a backup and so that the computer memory
does not get filled up. In addition, as a Prime user one gets just that extra thing - you get an
unlimited photo storage with Amazon Prime Photos. This photo storage service was added to
Prime in 2014 and the service gives Prime users a direct backup of their images on their
phones, which is also unlimited, and which reportedly receives the vast majority of image
files.
The photo storage gives all users of Amazon Prime a sensible reason not to use Dropbox, and
in this way, increases its own lever on the different customer segments.
 AMAZON DASH

The Dash Button is one of the most recent initiatives launched

by Amazon, which is a WiFi connected button that, when
pressed, instantly purchases or reorders a product from
Amazon. The Dash Button is linked to a product of your choice,
so that when you are running low on products, such as washing
powder for your washing machine, toilet paper, dishwashing
tablets, coffee, hand lotion you simply press the button.
Essentially, this service is exclusively for Prime members, and
seems as another attempt for Amazon to handcuff its
members into its Prime subscription service.

This service is about ultimate convenience for consumers, who

can choose between more than 40 brands, such as Air Wick,
Ariel, Dettol, Vanish, Gillette, and Nescafé.
 PRIME DAY

Prime Day was launched by Amazon Prime its one-day sale event, Prime Day, which is meant to reward Prime
subscribers with exclusive deals ranging from deals on electronics, such as tablets, TV and laptops to clothing,
shoes, jewellery, kitchenware and so on. Strategy here was to sell out the old stocks as well as Trendy products.

Amazon Prime Day 2016 was supposedly the ‘biggest day in the history of Amazon.

Amazon has shipped 60 per cent more products worldwide compared to Prime Day 2015, with a 50 per cent boost in
its home territory of the US.
Amazon Prime Air is all about air delivery via drones. The project seems viable, since 86 per cent of
Amazon’s parcels actually weigh less than a drone can carry. For Amazon, it would provide an opportunity
to economise the person delivering the packages. For the subscriber, it would not just be a great
experience to have your package delivered through the air, but in the long run it would probably also be
the fastest delivery. Amazon prime Air has been helpfull in the Covid times.
 AMAZON FRESH/ PRIME FRESH

Amazon's entry into the market for groceries this means to

achieve the strategic goal which called AmazonFresh.
AmazonFresh and PrimeFresh AmazonFresh is a service that
delivers groceries - and other items - directly to the customers’
doorstep the same day as the goods are ordered or the following
morning. A assortment of about 100,000 items are offered in
certain postcodes in the US and now in other countries.

The goal of PrimeFresh is of course the obvious: To get

customers, who are used to buy once or twice a month, to buy
once or twice a week or, if possible, even more often. The
mission appears to succeed, because just as with Prime, Amazon
is experiencing that members of AmazonFresh are not only
buying more, but also more often than non-members, just as
PrimeFresh members purchase more than the regular Prime
members.
 CONCLUSION

Amazon uses "bundling" as a key strategy by adding more and more services and more and more content to
Prime. Besides delivery, members also have access to music, movies, data storage, and much more as part
of the subscription. It is no coincidence that the number of Prime members has grown explosively in recent
years, where total services of Prime has also risen.

Amazon uses a very deliberate strategy that concerns tying members even closer to the services and
providing customers with an experience of value-for-money. Once the many services are being used, it is
much harder for the customer to leave the services again. For example, research shows that new Amazon
Prime members, who use video service in their free trial period converts in higher rate than those, who do
not use this part of the service. So the many built-in services help both in terms of new sales, conversion
and retention.

Market Share of amazon has been increasing due to the fact that they have taken the best strategic
decisions and business ideas and innovations and first mover advanatge has always been Amazon's goal.
 References
https://www.aboutamazon.com/
https://research-methodology.net/amazon-ansoff-matrix-2-2/
https://bstrategyhub.com/swot-analysis-of-amazon-amazon-swot/
https://thebusinessprofessor.com/en_US/business-management-amp-operations-strategy-entrepreneurship-amp-
innovation/vertical-and-horizontal-integration
https://www.comparably.com/companies/amazon/mission
https://www.marketing10.in/porters-five-forces-analysis-of-amazon/
https://www.wpoven.com/blog/aws-market-
share/#:~:text=Right%20now%2C%20AWS%20market%20share,hosting%20software%20providers%20after%20G
oDaddy