ĐẠI HỌC KINH TẾ QUỐC DÂN

-------***-------

INTERNATIONAL BUSINESS 2
A1 : ANALYZE THE INTERNATIONAL BUSINESS
OPPORTUNITIES OF AMAZON

Group 1 – Quản trị KDQT CLC 62A

1. Phạm Trường Phúc -11206535

2. Lê Xuân Hòa - 11201548
3. Trần Quý An - 11200026
4. Nguyễn Toàn Tú - 11207336

Hà Nội, 2022
 INDEX

I. History of Amazon
II. Access readiness of the Amazon
III. Analyze Amazon’s international business opportunities
1. Amazon’s macro factors
2. Sector market analysis
3. Amazon’s competitive advantage
4. Fit of Amazon offering with market

IV. References

1
 I. History of Amazon

Amazon was founded in 1994 as an online bookstore. Its founder, Jeff Bezos,
moved to Seattle from New York City

In 1997, Amazon started selling music and videos online. It later expanded its
operations by acquiring the various book and accessory stores in Germany and the
UK. In 2002, it launched Amazon Web Services, which provided web statistics.

In 2006, Amazon launched its Elastic Compute Cloud. This cloud-based

computing platform lets users store and manage their data on the Internet. Later
that year, it launched Fulfillment, a service that enables individuals and businesses
to sell their goods and services online. In 2012, Amazon bought Kiva Systems to
automate its inventory management business.

Amazon’s International segment consists of Amazon’s retail business for

consumer products and subscriptions for internationally focused online stores. It
also includes export sales from those stores, but not those from North America-
focused online stores.

The segment reported an operating loss of $1.6 billion in Q4 FY 2021, a

significant deterioration from operating income of $363 million posted in the year-
ago quarter. Net sales for the International segment fell nearly 1.0% YOY to $37.3
billion, comprising about 27% of total net sales.

2
 II. Access readiness of the Amazon:

According to Amazon's successful international business, we can qualify Amazon

on the ninth scale on the Solberg’s table.

III. Analyze Amazon’s international business opportunities

3
4
 1. Amazon’s macro factors using PESTEL analysis

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.
● The Government supports 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

5
 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.
6
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:

7
 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 prices,
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

8
 2. Sector market analysis
a. Size and growth of internationl e-commerce
The global e-commerce market size was valued at USD 9.09 trillion in 2019 and is
expected to grow at a compound annual growth rate (CAGR) of 14.7% from 2020
to 2027. Increasing penetration of the internet is bolstering the smartphone-using
population across the world. Digital content, travel and leisure, financial services,
and e-tailing among others constitute a variety of e-commerce options available to
the internet accessing customer base that is gaining momentum with increased
internet usage. Hence, technological awareness among customers is expected to
have a positive impact on market growth. The growing importance of faster
browsing has led to the development of connectivity, thus leading to the
development of 4G and 5G technology.

b. Amazon Porter's Five Forces

Amazon is the giant and a market leader in the e-commerce industry. But its
position is always in danger because of the intense competition; hence, Amazon
works hard to maintain its brand image. It especially focuses on the customer
experience and making its products and services more user-friendly. So, let us
analyze Amazon Porter's five forces model to see how the industry affects
Amazon and how it deals with it.
 Competition in the industry (Strong force)
 The threat of new entrants (weak force)
 The bargaining power of suppliers(moderate force)
 The bargaining power of customers(Strong force)
 Threat of substitute products or services(Weak Force)

9
Competition in the industry (Strong force)
Amazon operates in a very competitive market, and the Amazon competitors'
analysis shows that the rivalry in the online retail market is increasing very
rapidly. The number of players in the market is increasing, and small-scale brands
and startups are making their place because of low switching costs. Amazon faces
throat-cut competition from Walmart, Flipkart, Alibaba, eBay, etc. However,
Amazon enjoys economies of scale and large investment options.
The threat of new entrants (weak force)
Amazon is a giant in the market, and it has a very strong brand image. Also, it
enjoys economies of scale and large warehousing and delivery facilities. Since it is
a large-scale company, it has a massive investment in eCommerce solutions,
customer services, logistics, and marketing. So, it is rather challenging for any
company to beat this brand image and make its prominent place in the market.
However, small-scale companies can grab a limited segment of customers because
10
of low switching costs. So Amazon Porter's five forces analysis shows that the
threat of new entrants is a weak force with no substantial setback for Amazon.
The bargaining power of suppliers(moderate force)
Suppliers control the availability of products for the eCommerce operations of
Amazon. Also, Amazon relies on the equipment and hardware components for
information systems in cloud services. In Amazon Porter's five forces analysis, the
bargaining power of suppliers is a moderate force. The contributing factors to this
force are small suppliers, moderate forward integration, and the size of suppliers.
However, Amazon dictates the supply chain because of its large business and ease
of switching suppliers.
The bargaining power of customers(Strong force)
The bargaining power of buyers in Amazon Porter's five forces model is medium
to high. Amazon's success is based on customer satisfaction and product quality.
Though switching costs for the customers are very low, substitutes have emerged
in large numbers. Customers have access to general information about products
and services that different suppliers offer, making it easy for them to find
alternatives.
Threat of substitute products or services(Weak Force)
Amazon Porter's Five Forces Analysis shows some forces in the threat of
substitute products and services. These forces are low switching costs, high
availability of substitutes, and low cost of substitutes. The low switching costs
mean customers can easily choose a customer without any extra cost. So, if they
buy from Walmart or Amazon, they do not pay any extra cost. Then many low-
scale substitutes offer low-cost substitutes. So, Amazon is continuously fighting
against these substitutes to maintain its leadership image. But Amazon's brand
image is a successful shield against these threats. Also, its infrastructure,
distribution, warehousing network, and service quality are hard to beat.

3. Amazon competitive advantage:

11
Primary Activities
Inbound Logistics:
Inbound logistics generally mean obtaining raw materials. However, since
Amazon usually does not produce its products. Fulfillment by Amazon service is
its inbound logistics, and it provides these services to vendors. Amazon stands tall
in the market because of its logistics and the efficiency of its delivery and returns.
It provides guaranteed services with responsibility for logistics, customer service,
and product returns. At the same time, efficient logistics infrastructure covers the
inbound logistics for Amazon value chain analysis.

Operations:
In general value chain analysis, operations include activities that convert raw
materials into finished goods. Amazon has different channels that are covered by
the operations. These segments are of different geographical locations, including
the North American segment and international segment. The third segment is the
Amazon Web Services(AWS). AWS encompasses computing, storage, cloud

12
infrastructure, database, and other services. These operations provide Amazon a
competitive advantage through services and operations.

Innovative and robust solutions add value to Amazon's profile. Cloud storage,
AWS, and cloud computing started as in-house solutions for the company itself.
However, its sophistication and robustness made it another business stream for
Amazon as they commercialized these solutions. So, the operations also provide a
competitive advantage to the company.

Outbound Logistics:
Outbound logistics involve storage, supply, and distribution of the finished
products. Amazon's outbound logistics revolve around the 175 fulfillment centers
all around the world. Amazon's fulfillment is supported by robotic technology for
inventory. Activities involved in storing, moving, and distributing finished
products. Amazon has various operations included in its outbound logistics.
Fulfillment by Amazon manages, stores, and ships the products in all orders. It
includes the shipping companies and Amazon's logistic system encompassing
planes, ships, trucks, and drones for efficient outbound logistics.

Apart from this, outbound logistics also involves the digital delivery of its
products. It includes digital format books, media, etc. Then another channel of
outbound logistics for the physical stores.

Marketing and Sales:

Of course, this great scale of marketing and advertising is spanned over different
channels, media, and a global reach and impact. It includes print and media ad
campaigns, sales promotions, events, public relations, and targeted customer
marketing.

13
Apart from direct and mainstream marketing, Amazon has other channels of
attracting customers to its brand. It uses attractive prices, fast delivery, and
Amazon prime services for marketing itself as a favorite brand.

Service:
Value chain analysis of Amazon shows that the services provided by the
organization play a vital role in acquiring a competitive advantage. It provides
premium services for the end customers and the vendors that eventually result in a
sleek and reliable business model for everyone. It provides full support, including
training, literature, and support facilities for vendors. At the same time, the end
customer can use Amazon Marketplace and prime services for more advantages.
After-sale service is another great endeavor from Amazon.
Support Activities
Infrastructure
Amazon is a giant in the business field, and no doubt, it couldn't bear its weight
without a firm infrastructure to carry the weight. Amazon has invested finances,
time, and efforts to build a scalable and reliable business model to provide its huge
size and market share. It includes offline structures like shipping, hiring, and
delivery. At the same time, the online support and digital solutions are nothing
less than the best.

Besides its backend management, the company also has a seamless customer
service and employee management infrastructure.

Human Resource Management

Amazon’s value chain analysis cannot be completed without its HR management
department. Amazon has its in-house employees, international employees,
contractors, and temporary workforce. Amazon has a firm infrastructure supported
by technology to ensure maximum cooperation between the firm and the

14
workforce. Its rewards program and the recognition of good work have gained
loyal employees and the least turnover.

Technology Development
Amazon has not only proved its success in physical merchandise but has also not
left the digital front unattended. The processes and solutions like cloud computing
and cloud storage that started as the company's processes to deal with its
operations worked so well that they have become industry standards.

Procurement
The sales and Operations (S&OP) process deals with the procurement for the
company. The inventory is managed through this system using forecasting and
just time inventory principles.
Amazon's competitive advantages compared to competitors:

-Large-scale web presence,

-IT capacity and scalability,

-Data and analytic capability,

-Relentless focus on the customer including the value that customer's place on
convenience,

-Overall technical capability and in particular the application of technology to

achieve business efficiency,

-Cash generation from the online retail business.

15
These advantages have been gained largely through continuous innovation and
development of the e-commerce part of its business model.

In the following sections, each of Amazon's core businesses will be discussed in

detail. It will be shown how each of them has its own business model and strategy,
whilst at the same time utilising the overall corporate competitive advantage and
thus achieving synergy with the other core business aspects.

4. Fit of Amazon offering with market

a. Amazon Objectives
As a worldwide company, Amazon aims to meet its mission statement year upon
year to satisfy its customers, “serve consumers through online and physical stores
and focus on selection, price, and convenience.”as stated in their mission
statement. Amazon’s main focus is always going to be about the satisfaction they
provide to customers as they are a for-profit organization, therefore as a company,
they most probably set aims to meet, if not exceed, profit year after year to
continue to strive to be the worldwide company they are and the services they
provide. As a company Amazon also aims to produce the best quality stock to
satisfy their customers on a daily basis and live up to the name they have been
given by the ‘Amazon Effect.’ The Amazon effect is an effect that Amazon has
had on all the company’s in the industry by
being the world’s best e-commerce company, to live up to this they need to set
themselves these aims to meet and impress the public. To meet these aims of
customer satisfaction, Amazon needs to provide the greatest convenience to
customers through their delivery services as a start and another being the website
continually being up to date with modern technology as this is what consumers
16
rely on from Amazon. This objective also helps Amazon to meet its goal of
exceeding profit, as with customer satisfaction, profit soon
follows. One aim and objective of Amazon would be profit maximization, this is
where Amazon will aim to make the most profit possible. For Amazon to meet
this aim they must provide a high amount of customer satisfaction in order for
consumers to use its services and purchase its products. This customer satisfaction
comes from the quality of the products they provide, the efficiency of using their
services, and providing great amounts of convenience to customers which all link
into the next aim and objective. Another aim for Amazon would be for them to
constantly upgrade their products and services to possibly attract new customers,
although upgrading products and services are positive for the business,
maintaining their ways of work which are already impressing the public is also
something they need to focus on. To improve/maintain their products and services,
they may want to bring in new staff who have expertise in marketing for example,
or expertise in newer technology which will also benefit the business. Lastly, the
most important aim for Amazon in my opinion would be staying ahead of the
competition they are faced with. Amazon’s competitors are also some of the
biggest companies in the world with Walmart being their biggest, currently,
Amazon is the world’s best e-commerce company and has been labelled with the
‘Amazon Effect’ to their
competitors. For Amazon to maintain the name they have been given by both the
‘Amazon Effect’ and being the world’s biggest e-commerce company, Amazon
should always be trying to stay one step ahead of their competitors whether that be
through their marketing or through bringing new product ranges they should
always be doing more than other organisations to attract the most customers and
customer satisfaction.

17
Clear Customer Experience Vision

According to the CSX framework, a clear Customer experience vision sets the
tone of what kind of experiences the organisation would like to give the
customers.

Amazon’s vision statement is “To be Earth’s most customer-centric company,

where customers can find and discover anything they might want to buy online.”
The vision statement of the organisation reflects their customer centricity which
Jeff Bezoss has repetitively propagated ‘to stay focused on your customers instead
of your competitors’ (Rubenstein, 2020). The clear vision statement underscores
the following components-

18
 1. Be the best e-commerce company;
2. Provide customers the widest selection;
3. Offer the best pricings;
4. Create a seamless experience for the customers.

Along with the Vision Statement, Amazon’s Leadership Principles guide

amazonians in their day to day dealings whether it's a new project or a problem.
Leadership Principle-Customer Obsession has been its core value from the onset
where ‘Leaders start with the customer and work backwards. They work
vigorously to earn and keep customer trust. Although leaders pay attention to
competitors, they obsess over customers’ (Leadership Principles, n.d).

Customer in the Centre

The second strategy in the CSX framework is to keep the customer in the centre of
the conversation while creating the common service language.

Amazon is customer-centric and is driven by the core value of ‘Customer

Obsession’. Its mission to be Earth’s most customer-centric company requires it to
keep innovating, keep expanding its products and services and its reach. In 2005,
Jeff Bezos revolutionised the e-commerce business single-handedly by
announcing Amazon Prime-first of its kind membership program which provided
“all-you-can-eat’ 2 days express shipping of over a million items in stock.
Amazon Prime raised the bar of convenience for customers and the type of
products they were willing to buy online. Amazon Prime was a risky, expensive
and scary venture and it didn’t look good but Jeff went with his heart and intuition
keeping the customers in the centre of the conversation because he knew that
customers loved free shipping and if they subscribed it would garner the support
19
needed to make Amazon Prime a success (Rubenstein, 2020). Today, Amazon
Prime customers have over 100 million items available for fast and free one day or
same day shipping available to them with the 1- click setting. Furthermore, the
number of paying Prime members worldwide above 200 million (Number of
paying Amazon Prime worldwide 2015-2019).

Since its early days in the garage, Amazon has expanded its products and services
to cater from individual needs, households to organisations. Bezoss in Amazon’s
20th annual shareholder letter said “One thing I love about customers is that they
are divinely discontent,” and “Their expectations are never static – they go up. It’s
human nature.” This drives Amazon to continuously foresight into the needs of the
customers. As a result of the discontent customers looking for instant gratification,
Amazon has worked on many products/services. To name a few, they are:

● Amazon Prime
● Amazon Gaming Studio
● Amazon Business
● Amazon Video
● Amazon Web Services
● Amazon Luna -a cloud gaming service
● Amazon Electronics-Alexa, Kindle, twitch
● Amazon Digital Content-Music.

Amazon keeps innovating new products to wow the customers and that keeps the
customer experience optimum and retention high.

Another way that Amazon keeps the customer service experience seamless and
similar is by using the omnichannel marketing strategy. Omnichannel marketing is
20
an integrated approach to give the customer a unified experience irrespective of
how the customer connects with the product/service. For example, Amazon
customers can place orders through Alexa and receive the products the same day
at their doorstep.

Thirdly, customer complaints are taken seriously because everyone in the

organisation knows that Jeff reads the emails that come to his famous email
Jeff@Amazon.com and many times his executives are forwarded the email with a
single character-a question mark (Bort, n.d.). That single character email means to
investigate the issue and resolve it because Amazon is based on the core value of
‘Customer Obsession’. Jeff Bezoss says that “when the anecdotes and the data
disagree, the anecdotes are usually right” (Bort, n.d.) because customers give him
frontline insights. So customers are always at the centre of the conversation and
that elevates the experience for most of them.

21
Creating Service Experience Culture

The third strategy of the CSX framework is to create a service experience culture.
Organisational leadership needs to create a powerful customer service experience
vision, embed service language in the mindset of the employees so that they keep
matching the vision with their actions.

At Amazon, the culture to create CSX starts with Bezos’s himself as he says ‘I
love team inventing; it's my favourite thing…it’s a very fun process’ (Rubenstein,
2020). The culture of the organisation is based on innovation, risk-taking and
thinking big and bold so that the best customer service experiences can be created.
For example, Bing Gordan, one of the Amazon Board members always wanted a
loyalty program but a junior Amazon engineer named Charlie Ward pitched the
idea in a digital employee-suggestion box which resulted in the all-you-can-eat-
buffet of fast, free shipping (Rubenstein, 2020).

Furthermore, the leadership principles of Amazon continuously guide Amazonians

to create Customer Service Experience. Some of the Leadership principles that
directly or indirectly customer experience are

1. Customer Obsession (direct impact on CSX);

2. Think Big (direct impact on CSX);
3. Bias for Action (direct impact on CSX);
4. Invent and Simplify (direct impact on CSX);
5. Deep Dive (direct impact on CSX);
6. Ownership (direct impact on CSX)
7. Learn and be Curious (direct impact on CSX);
8. Deliver Results (direct impact on CSX);
22
 9. Frugality (direct impact on CSX);
10.Earn Trust (direct impact on CSX);
11.Insist on the Highest Standards (direct impact on CSX);
12.Leaders are Right. A Lot (indirect impact on CSX);
13.Hire and Develop the Best (direct impact on CSX);
14.Have Backbone. Disagree and Commit (direct impact on CSX);
15.Strive to be Earth's Best Employer (indirect impact on CSX)
16.Success and Scale Bring Broad Responsibility (Paulise, 2021)

In conclusion, Amazon’s vision and culture of customer-centric innovation

encourages all Amazonians from top-down to continuously create optimum
customer service experiences because Amazon is ‘Customer Obsessed’.

b. Amazon International business experience

International ecommerce is something that many businesses aspire to but that few
have truly mastered. Unsurprisingly, Amazon is one of those that has become
synonymous with global success. In Loqate’s International Retail Index, Amazon
is in the top spot, but what is it that makes Amazon the marketplace giant
that everyone knows and loves? Let’s take a look at the key things that businesses
can learn from the colossal retailer about going global.

Understanding the online world

Interestingly, Amazon has a relatively small physical presence. However, their

online presence is so enormous having taken complete advantage of the rise in
online shopping. With years of experience in ecommerce, the team at Amazon has
23
honed its skills over the last two decades, and continues to influence many
retailers around the world. Whether it’s through the wide selection of products it
sells or the technology it uses to improve the user experience, Amazon continues
to stay one step ahead of the rest, remaining the masters of the online world.

Dedicated research

The teams at Amazon spends a lot of time researching the markets they are
considering entering into. This means having a great understanding of seasonality,
holidays, tax, regulations, lifestyle, and much more. Amazon is king when it
comes to going global but acting local - which means that they are able to
successfully sell to non-domestic shoppers, while delivering a local experience
thanks to local knowledge, language and advice via team members.

Regional Advertising

According to the gargantuan business, Amazon advertises widely in the regions

that they are extending into. This means starting from scratch, using local
knowledge to create effective campaigns, and understanding the most effective
way to advertise in each country and territory. This is a great way to build interest
and grow loyal customer bases and has shown to be extremely effective in
countries such as China and India.

Delivery options

When it comes to online delivery, Amazon is the winning choice for many, and in
fact, the retail giant delivers to over 200 markets and territories worldwide. And
24
not only does Amazon deliver to so many countries and territories, but the
company also offers a great range of delivery options that are now influencing
many other retailers. For example, ASOS now offers a delivery option similar to
Amazon Prime, in which shoppers pay a small fee that allows them to receive
unlimited next day delivery. Amazon is also way ahead when it comes to quick
delivery, offering sub-90 minute delivery in many markets through Prime Now -
catering to shopper convenience.

Smooth checkout

Delivery to so many countries and territories can have its challenges if you don’t
have the technology and data to make fulfillment possible, but Amazon has this
covered. They use international address verification to ensure that shoppers
around the world can quickly and easily enter their billing and delivery address
details into the checkout without frustration, and ensures that the international
address data that is captured is accurate and can be delivered to the correct
address.

Amazon’s global store enables both domestic and non-domestic customers to

conveniently purchase products imported from the US, providing a seamless end-
to-end shopping experience, and their success looks likely to rise even further due
to their dedication to implementing great technology and researching the market.

25
c Amazon resources

Amazon is the leading e-commerce brand of the world. However, apart from that,
it is also a leading cloud player. In the recent years, it has enjoyed fast growth in
its revenue and customer base. Both its e-commerce and cloud business are seeing
faster growth. The company has built strong trust and brand equity. Apart from
everything, Amazon is a customer centric and innovative brand. The company
invests major sums each year in research and development so as to grow its range
of technology offerings and improve its platform. The leadership position of
Amazon comes from several sources and the company has maintained its edge by
focusing on every aspect of business including marketing, customer service,
technological innovation and more things.

Take a look at the resources and capabilities of Amazon that have helped it
achieve a leading position in the market and retain its competitive edge.

Brand equity:-

Brand equity is among the leading strengths of any technology brand. For a major
brand to retain its leading position, it is essential to win consumers’ trust. Brand
equity is build over time. However, Amazon has successfully built strong brand
equity in its life span through its focus on customer service and product quality.
The high level of trust that its consumers place in it has become a leading reason
behind its success in the global marketplace. Higher brand equity means higher
trust, higher sales and higher revenue as well. Revenue of Amazon reached $232.9
Billions in 2018.

Customer loyalty:-

Since its foundation, Amazon’s focus has remained on customer service. Strong
focus on customer service has resulted in higher sales and fast growth in
popularity. Today, it is a leading technology brand apart from being the leading e-
retailer. While Amazon has a great pricing strategy, it also has focused on serving
26
customers well, leading to higher customer loyalty. Its diversified product
portfolio is targeted at various customer segments. It has a large and loyal base of
middle class customers. Higher customer loyalty means higher sales and revenue
while marketing related pressure on a brand is also low. Moreover, Amazon has
always focused on customer convenience and through investment in technological
innovation, it has continued to improve the level of service it offers on its e-
commerce platform. The result is that Amazon is the e-commerce platform of
choice for both sellers and buyers.

Global presence:-

Amazon is a global brand that offers its products and services online in nearly
every corner of the world. Its global presence is also an important reason that the
brand has been able to achieve high level sales and revenues. Amazon mainly
delivers its services online. However, it has established a large network of
warehouses around the world in several countries to make delivery around the
world easier. The company also allows sellers from various countries to sell their
products online through its ecommerce platform. In this way, the company has
managed a strong and impressive global presence which in turn has proved
beneficial for its bottom line.

Technological innovation:-

Technological innovation is also a key reason behind the fast growth and global
popularity of Amazon. Apart from its ecommerce platform, the company has
brought a large range of cloud based services for web developers and enterprises.
Amazon invests a large sum each year in research and development. The company
is among the leading investors in R&D in the entire technology industry. It is also
among the main reasons behind the fast growth of Amazon. It has continued to
grow its range of cloud based services and the level of customer service over
years. This has led to growth in popularity and demand for Amazon. In 2018, the
company spent $28.84 Billion on Research and development.
27
Product range:-

Amazon being the leading e-commerce brand of the world offers a very large
range of products online. Apart from them the company also offers a large range
of cloud based services and technology products meant for developers and
enterprises. Amazon’s AWS segment delivers cloud based products and services
for developers and enterprises. Apart from that its e-commerce platforms sells
millions of products and the company has also brought its own range of products
including several Alexa enabled devices as well as Kindle tablets and other several
more products.

Marketing:-

Marketing is also a key source of competitive advantage for Amazon. Amazon

uses marketing for growing demand and sales as well as for branding purposes. In
this regard it uses several marketing channels including email marketing as well as
other marketing channels like affiliate marketing and online advertising. Amazon
also spends a fortune every year on marketing. In 2018, the company spent
$13,814 million on marketing.

28
 REFERENCE MATERIAL
https://www.edrawmax.com/article/amazon-pestel-analysis.html

https://www.globaldata.com/data-insights/retail-and-wholesale/market-
value-of-global-e-commerce-2082924/

https://www.edrawmax.com/article/amazon-value-chain-analysis.html

https://www.edrawmax.com/article/amazon-porters-five-forces-
analysis.html

https://www.notesmatic.com/amazon-resources-and-capabilities/

https://www.linkedin.com/pulse/customer-service-experience-lessons-
from-amazon-kiran-deep-sandhu?trk=pulse-article_more-
articles_related-content-card

https://www.studocu.com/en-us/document/sacred-heart-university/
business-statistics/amazon-and-how-they-achieve-aims-and-
objectives/19009999

29