AMAZON: STRATEGY ANALYSIS

Amazon: Strategy Analysis

Amazon: Strategic Analysis

About Amazon

Amazon is the biggest retail store of the United States. It is the biggest E-commerce firm in America, with its extensive range of products and wide regional presence. The headquarters of Amazon are located in Seattle, Washington DC. The firm was named after the biggest river in the world, 'Amazon', with the vision to become world biggest bookstore, however, the business shifted from mere book selling website to an online store with numerous categories and product ranges customers (Adair, 2010, pp.53-64).It has websites and physical presence in many countries. Since, the business idea was highly appreciated by the customers, firm has to shift its corporate strategy from becoming the biggest online book store to become the place where customer could get anything against the capital. In the year 2008, the firm stood at a market capitalization of $29 billion. The success of Amazon is attributed to the founder Mr.Jeff Bezof, who captured the future outlook of 'world wide web', since 1994 (Richards, 2006, pp. 133-154).

Business strategy

The business strategy of any firm is under its corporate strategy. It is defined as the long term plan and course of action that serves the attainment of corporate strategy. However, the business strategy of Amazon is now deviating from the corporate strategy, and therefore, Amazon is not able to achieve its desired goals (Korudi, 2003, pp. 53-69). This is not merely because of the excessively dynamic environment of the IT market, but also internal gaps and flaws. The business strategy of is discussed as follows;

The Amazon Business Strategy Cycle

As per discussed in the case study, the business strategy is centred on growth that leads to fulfilment of corporate strategy. The strategy has three key features that lead to implementation of business strategy, the three pillars of business strategy are:

Price: Amazon tends to operate in extremely cost-effective margins, so that, it gives customer lowest prices to buy. The store has a very low fixed cost, and meagre other costs to adhere to the business strategy.

Convenience: Amazon is a customer-centric firm, therefore, it revolves around approaches that please customer and provide them with an exquisite shopping experience that ranges from product selection to product delivery.

Selection: the website provides extensive range of selection in all categories for customer to make the best possible choice with their requirements and demands (Zhang, 2007, pp. 80-90).

As shown in the diagram, the strategy of Amazon is centred towards growth. The strategy focuses on lower prices, that is, branching out from lower cost structure of the overall business activity. The lowering in the prices makes more traffic being pulled into the website, and therefore, more sellers of the products. The traffic of customers and sellers of different products lead to create an exquisite customer experience for each product. Therefore, the experience is focused to be an online shopping paradise. The website traces customer feedback for perpetual improvement and betterment, in order to, respond to the most dynamic market of technology with ...