AMAZON STRATEGY ANALYSIS

Amazon Strategy analysis

Amazon Strategy analysis

Amazon, The E-Commerce success story

Amazon was born in the year 1994 by Jeff Bezof on the rapid growth of the World Wide Web. The company has its headquarters in Seattle, Washington DC. The firm is now, the largest name on the globe in E-commerce and the biggest online retailer. It is a big provider of the services of cloud computing, with its headquarters in the United States, Japan, Canada, France, United Kingdom, Austria, Spain, China, Germany and Italy, whereas, soon to be commenced in Sweden, Netherlands, Brazil and Poland. The business had a market capitalization of $ 29.4 billion, by the year 2008. However, the age of innovation and rapid technological development certainly affects the effectiveness of corporate and business strategy (Cao et al, 2000, pp. 15-36). Businesses are tending to shift online, and therefore, Amazon faces following issues:

The effect of global financial crisis

Heavy Investment in technology and its sustainability as a competitive edge

Being a 'customer centric ' business, to what extent should Amazon cater to its customer needs to all three groups

The application and reliability of the general business model for the coming five years.

The Amazon business strategy

A strategy, precisely a corporate strategy is the detailed plan of ways to achieve the desired position and vision by a firm. It essence develops from the root of corporate mission and vision of the business. Any business strategy is secondary to corporate strategy. It outlines particular management initiates and functions; a firm would develop and implement, to get to the overall corporate strategy. The business strategy combines assets and ideas to get the desired results (Currie, 2004, pp. 25-34).

The corporate strategy of Amazon began with becoming the largest book Store, which later converted to “the store where customer could buy anything with a capital”. The purpose of its existence revolves around providing convenience to customers. The illustration of Amazon business strategy is given as under;

The Amazon's business strategy is centralized around growth that branches out from lower prices, that emerges from the lower cost structure. It is based on offering lowest possible prices and widest range of specified products (Sweeney, 2001, pp.8-13). The goal is to provide enhanced customer experience through continuous improvements. This leads to increase in customer traffic on the website, the people who post their products for sale, and therefore, helps customer in selection and convenience of buying. The strategy has three fundamental pillars further discussed as under;

Selection: Amazon attempts to offer the largest range of products in each category for making customer selection easy, and worthwhile. It uses Amazon software, as well as, the respective cloud computing service to do that.

Price: Amazon has committed itself to lower prices driven from firm's lower cost structure. However, it ensures to sustain the quality on consistent basis.

Convenience: the purpose of the company is to devise a customer experience that emerges from customer convenience.

The business strategy of Amazon is customer-centric strategy, and therefore, caters to three ...