Case Study of Amazon Go Group

CM4607 – STRATEGIC MANAGEMENT FOR CONSTRUCTION

Group 5

Prepared By: Guided By:

Atharva Jadhav PCM22069 Dr. Abrar Ali Sayed
Disha Dave PCM22103
Jaivik Gandhi PCM22145
Krunal Barad PCM22174
Saiyam Shah PCM22300

Faculty of Technology
Kasturbhai Lalbhai Campus,
University Road, Navrangpura,
Ahmedabad-380 009 India.
www.cept.ac.in
Amazon Go CEPT University

1. Were Amazon’s diversifications through Amazon Go and Amazon Elements appropriate,

given the company’s resources and capabilities? Were such diversification risky strategic
moves?

Looking at the company’s resources and capabilities, Amazon should have not opt for
diversification through Amazon Go and Amazon Element. The company has a well-developed E-
commerce business working globally. Rather than trying out completely different, offline sector, it
shall focus more on further developing the existing online business.
Although Bedoz wanted to diversify, he shall try to visualize the long term profit. Also offline sector
has varied number of competitors. Thus Amazon shall focus on the core value of its business and
not disturb the business model completely. Due to diversification Amazon has lost many capital
cost in investing and paying rent for offline stores. Contrary to that Amazon could direct more
resources towards the expansion of the current business model.
Diversification was, in our opinion, a risky decision by Amazon. Entering the offline industry
without prior understanding of brick-and-mortar would be a little riskier. It may be difficult because
Amazon Go is exclusively focused on Prime members, but Amazon will be able to recover its
diversification plan like a pro with improved strategic decisions and great R&D. Furthermore,
Amazon's expanding customer devotion is a valuable commodity that may be used to leverage its
position and overcome risk. If Amazon could reduce the cost of membership, it would be able to
attract more consumers and compete more effectively with competitors such as Walmart.
So, in simple terms, Amazon's move into Amazon Go and Amazon Elements was a good idea
because they had lots of resources and customers. But it was also risky because they didn't know
much about running regular stores and had some tough competition. Plus, they needed to make sure
things worked well and people liked what they were selling. And going global added even more
challenges.

2. Can Amazon reproduce its online retail success in offline retail segments? Will it be able to
become one of the biggest offline retail players?

Recreating their online success in physical stores, as Amazon is trying to do, might be tricky. Even
though they have lots of customers and resources, running physical stores is quite different. If they
want to be one of the top offline retail companies, they'll have to compete with giants like Walmart
and Target. These big companies have been doing regular retail for a very long time and are
everywhere. Amazon's fancy tech approach with Amazon Go is cool, but it's still new. They need
to make it bigger and prove it's better than regular.
Amazon's Online Success: Amazon began as an online bookstore in 1994 but started selling all
kinds of things online later on. They became successful because they were really good at advertising,
managing their supply chain (getting products to customers), coming up with new ideas, and
focusing on making customers happy. By 2015, they were the most valuable online store in the
United States, even beating Walmart.
Amazon would not be able to reproduce the online retail success in the offline retail segment. The
idea is very niche and only prime members are allowed to purchase through Amazon Element.
The following are the challenges which Amazon will face in offline retail sector on contrary to the
online retail section:
No Experience with Real Stores: Amazon didn't have much experience running physical stores,
so moving into real stores was different from what they were good at (selling online).

1
Amazon Go CEPT University

Competition: Amazon Go and Amazon Elements competed with stores like Walmart and Target,
which were already good at traditional retail.
Possibility of Job Loss: Some people worried that Amazon's cashier-less technology could lead to
job losses, and this might cause issues with store workers and unions. It could also hurt Amazon's
image and business.
Keeping Quality and Efficiency: Running both online and offline stores and making sure
everything worked smoothly was hard as they grew bigger.
To sum it up, even though Amazon was great at online sales and had lots of resources, moving into
real stores was tricky. To be successful, they had to face challenges like competing with big players,
dealing with job concerns, and making sure things ran well. Whether they'd become a big player in
real stores depended on how they handled these challenges and adapted to the changing retail world.
The research paper doesn't give a clear answer on whether Amazon will succeed in real stores or
become one of the big players in that area. It depends on how well they use their strengths and deal
with the special challenges of real stores."

3. As the first mover in its shopping technology, will Amazon Go be able to succeed in the long
term?

In the long term, Amazon Go might succeed as a first mover in its shopping technology because
Amazon Go, with its great R&D and strategic innovation & management, has developed a niche for
itself by avoiding red ocean markets and therefore making itself desirable. Furthermore, Amazon's
strong hand in technological advancements and creation has aided them in taking a strategic leap
ahead of other competitors that is not only difficult to rapidly copy but has also provided them with
a future lead. Furthermore, the image of providing simple, time-saving shopping would attract more
Prime subscribers, resulting in long-term success.
As the pioneer in shopping technology, Amazon Go has undoubtedly secured a competitive edge
by introducing cashier-less shopping experiences. Nevertheless, its prospects for long-term success
hinge on various factors and its adept handling of ongoing challenges:
Expansion: Expanding the Amazon Go concept to more locations and larger establishments can
pose significant challenges. Ensuring the technology's reliability and efficiency as it scales up is
pivotal for sustained success.
Regulatory and Labour Considerations: Addressing regulatory obligations and potential
workforce displacement due to automation presents ongoing hurdles. Amazon must navigate these
issues adeptly to safeguard its reputation and operational continuity.
Technological Advancement: Technology evolves swiftly, and Amazon Go must stay adaptable
and incorporate new innovations to remain pertinent and competitive.
Global Expansion: If Amazon Go intends to expand internationally, it must adapt to diverse
markets, cultures, and regulatory landscapes, which can introduce distinct challenges.
Profitability: Long-term profitability is pivotal. Amazon Go must strike a balance between the
expenses associated with implementing and maintaining cashierless technology and revenue
generation.
In summary, while Amazon Go's early mover advantage positions it favourably, the sustainability
of its success hinges on its capacity to conform to evolving market dynamics, surmount challenges,
and sustain a culture of continuous innovation. The trajectory of Amazon Go will be shaped by its
adept handling of these considerations.

2
Amazon Go CEPT University

4. Being the first mover in a “checkout-free” convenience store, how can Amazon Go maintain
its competitive advantages in the long term? How can Amazon avoid failures such as the
diaper brand it introduced in 2014 and make Amazon Elements successful? How should
Amazon differentiate the products it offers via Amazon Elements from the products of other
suppliers on its platform?

As the first checkout-free convenience store, Amazon Go can sustain its competitive edge since it
has a time advantage, which it can exploit to attract and keep consumers. Amazon relies on customer
loyalty; therefore, if it can effectively use its time advantage in strategically innovating and
managing current scenarios to provide enhanced customer shopping experiences by continuously
working on feedbacks, it will help to generate greater customer equity and become a leading player
even in the offline market.
Amazon can keep away from disappointments, for example, the diaper brand it presents in 2014 and
make components more effective is by doing a beta testing on Amazon Components, for example
giving results of Amazon components as free examples and mentioning inputs from clients and
working on the item. Once, the item is totally refreshed by the client requests, it could then send off
on the lookout. This will not only contribute to the success of Amazon Elements, but it will also
contribute to the development of a favourable brand image for Amazon, thereby attracting customers
and fostering their loyalty.
Amazon should differentiate the products offered through Amazon Elements on its platform from
those of other sellers by creating a separate and exclusive section for Amazon Elements products.
In addition, it should create an emotional story for each product and post it on social media to create
brand awareness for Amazon Elements. In addition, some systems, such as discount offers or brand
loyalty points, can help attract customers and choose Amazon items over products from different
brands.