Amazon Inc. Case Study


This Amazon Inc.’s case study closely mirrors many of the custom case studies that we write for our customers. From time to time, we ask writers to write case studies such as this one to demonstrate the type of services we offer. Whenever you want to buy academic papers online, https://www.termpaperchampions.com/ is the place to be. The question-answer format may help you understand the rationale for structuring the case study as outlined below.


Question

Analyse Amazon’s strategic position, and use this analysis to evaluate the suitability of Amazon’s corporate strategy

  1. Analyse strategic position in terms of strategic groups, market segments, and critical success factors.
  2. Analyze macro-environment through the PESTEL model.
  3. Evaluate the competitive environment through the Porter’s five forces model.
  4. Apply the notion of strategy capability (value chain, SWOT analysis)
  5. Explain and evaluate the corporate level strategy of Amazon’s through evaluation criteria: consistency, suitability, validity, acceptability, and feasibility.

Answer:

Amazons strategic position and corporate strategy

Contents

Introduction. 2

Amazon’s strategic position: strategic groups, market segments, and critical success factors. 3

Strategic groups. 3

Market segments. 3

Critical success factors. 4

Amazon’s macro-environment: The PESTEL model 7

Political factors. 7

Economic factors. 7

Social factors. 9

Technological factors. 10

Environmental factors. 11

Legal Factors. 12

Amazon’s competitive environment: Porter’s Five Forces Model 13

Threat of new entrants. 13

Threat of substitutes. 14

Buyers’ bargaining power 14

Threat of rivalry in the industry. 15

Suppliers’ bargaining power 16

Amazon’s strategy capability: SWOT and Value chain analysis. 17

SWOT analysis. 17

Strengths. 17

Weaknesses. 17

Opportunities. 17

Threats. 17

Value chain analysis. 18

Amazon’s corporate strategy: Consistency, suitability, validity, acceptability, and feasibility. 19

Conclusion. 20

References. 21

Introduction

Amazon Inc. is a company that sells products to customers through retail websites. The company focuses on price, selection, and convenience when serving its consumers. Amazon is also involved in the manufacture and sale of Kindle devices. Through the Amazon’s programs, sellers are able to sell their products through its websites as well as in their own-branded websites. Through these programs, authors, musicians, app developers, filmmakers, and other professionals get access to a platform for publishing and selling content (Mellahi, & Johnson, 2008). Amazon operates through two segments: international and North America. In the North American segment, attention is on websites that focus on the North American market. In contrast, the international segment targets subscriptions and consumer products sold by internationally-focused websites.

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Amazon started as the biggest online bookstore on earth (Mellahi, & Johnson, 2008). Today, it has grown to become the biggest store for a wide variety of products. This is demonstrated in the numerous ways in which the company has expanded its operations. Today, Amazon offers not just books but also music, movies, games, and electronics. It also offers items belonging to general merchandise categories such as home furnishings, auto parts, and toys. By simply visiting Amazon’s website, consumers are able to download e-books, films, and music to their computers and handheld devices, which include the Kindle, Amazon’s own e-reader. Amazon has also diversified into the areas of self-publishing, e-commerce platform, and online advertising. The aim of this paper is to analyze Amazon’s strategic position. Using this analysis, the suitability of Amazon’s corporate strategy is evaluated.

Amazon’s Strategic Position: Strategic Groups, Market Segments, and Critical Success Factors

Strategic groups

Amazon started as one of the major pioneering companies engaging in the sale of products over the internet. At first, the company operated simply as an online bookstore. Following success in this line of business, it diversified into many other services and product lines. Today, Amazon has grown to become not only a multinational e-commerce company but also the largest online retailer in the world.

To put Amazon’s strategic position into perspective, an analysis of various strategic groups falling within the company’s line of business is necessary. Strategic group is a management concept used for separating corporate entities within the same industry on the basis of similarity in business models or strategic combination. A dimensional grid is normally used to display a strategic group’s market position in relation to that of a competing company. The main strategic groups that belong to the same category with Amazon include eBay, target.com, Walmart.com, Overstock.com, and B&N.com. Of these strategic groups, Amazon is the largest company in terms of both sales revenue and range of products on offer. The company’s closest rival in this regard is eBay. B&N.com is the smallest strategic group going by the dimensions of both the range of products offered and sales revenue.

Market segments

In terms of market segmentation, the initial target of Amazon was to become an online bookstore that would enable consumers choose from over one million titles. Books constituted the main segment. With time, the company diversified into other segments, primarily music, videos, and gifts. It also embarked on a clear geographical segmentation of its market, leading to the creation of the North American (domestic) and International divisions. Today, this strategic positioning and differentiation has enabled the company to take pride on being the world’s largest bookstore.

Today, Amazon’s products and services are broadly categorized into retail and non-retail segments. The retail segment comprises of books, movies, music, consumer electronics, tools and automotive, computer and office, toys and video games, home improvement, Kindly, clothing and jewellery, and sports and fitness. The non-retail segment includes commission-based selling, referrals, services to businesses, and Amazon Web Services (AWS).

To promote sales in each of these segments, Amazon has succeeded in finalizing several acquisitions. Some of these acquisitions include exchange.com, IMBD, musicfile.com, bibliofind.com, jungle.com, and planetall.com. These acquisitions also enable Amazon compete with other major online companies such as eBay, Google, and Apple. They have also enabled the company absorb employees and technologies into its IT operations. Another major advantage is that improvements in retail software services have been achieved.

Critical success factors

As an online merchant, Amazon.com has succeeded in entering into other business lines beyond books. The company has also made good use of alliances, strategic partnerships, and acquisitions to improve services and attract new customers (Kha, 2010). The efforts have brought about tremendous market achievement, competencies, competitive capabilities, and strategic elements that constitute the company’s critical success factors.

One of the most outstanding critical success factors for Amazon is e-business (Kha, 2010). Amazon’s founder was keen to study the book market before earmarking it as a starting point for the company. More importantly, he understood how the internet operates and keenly invested in the latest internet technology. The objective was to make online shopping easier, faster, and more rewarding to the customer. Jeffrey Bezos, Amazon’s founder, saw the ability by the World Wide Web to connect everyone with any product as an opportunity that was yet to be exploited (Kha, 2010). This meant that in the online setting, one could achieve things that were not achievable in the physical world. In this way, Amazon had acquired its first mover advantage. For example, it was possible to use a single store as a selling point for millions of books.

According to Chang (2010), the company has over the years gained the ability to achieve its goals as far as innovation is concerned. This has made Amazon to be touted not just as a retail company but also a technology company. In this regard, trick is for the company to adopt innovation as an ongoing strategy. This is for the simple reason that technological changes keep occurring all the time. Therefore, adopting innovation as an ongoing strategy is the best way of achieving sustainability in the company’s technological development. For Amazon to keep leading, it is compelled to keep innovating. One of the areas of leadership in innovation for Amazon is the adoption of collaborative filter technologies. Through these technologies, customers are able to evaluate books using a five-star rating system. At the same time, the technologies enable browsers to provide ratings for reviews depending on their helpfulness.

The company has endeavoured to create a friendly, straightforward web design and interface. The online payment system is also convenient, a factor that enables it provide a unique shopping experience to customers. In terms of web design, Amazon is widely viewed as the undisputed leader. Web pages are uniquely organized, elements of visual hierarchy are excellently portrayed, the interface is friendly, and the layout allows for easy navigation. The design also leaves room for customer differentiation.

Price is another major critical success factor for Amazon (Chang, 2010). The company has differentiated itself in terms of price by ensuring that products of the same quality as those of another company are offered at a markedly lower price (Chang, 2010). Moreover, sellers are exempted from paying any fees for listing their products; they need not pay any coin until their product is sold. To achieve this goal, Amazon focuses a lot on partnerships with wholesalers. In essence, the company makes efforts to connect to resources that give it access to scale as opposed to those that simply add internal physical mass.

The online bookstore enables the company to attain expansion more easily because it does encounter geographical constraints. According to Nicholas (2010), Amazon’s products are about 10 percent cheaper than those sold through brick-and-mortar bookstores. Moreover, as the order size increases, opportunities for cost-saving increase. In this regard, affiliates or independent sellers play a critical role as far as selling is concerned given that their sales constitute roughly 40 percent of the entire sales of Amazon.

The payment process is convenient because it is Amazon itself that handles all payments. There is no requirement for sellers to establish different payment accounts like in the case of eBay (Chang, 2010). At Amazon, the ordering process is based on a one-click procedure. In this way, customers do not need to go through the hassles associated with checkout payment systems during the ordering process. This business model created a convenient shopping experience that starts and ends at Amazon’s website.

Amazon’s Macro-Environment: The PESTEL Model

Political factors

In terms of the political environment, the government or the political body might influence Amazon’s operations. A case in point involves government’s decision to impose laws and regulations aimed at influencing the way online businesses are carried out. This may have a negative impact on Amazon’s business model. On the other hand, a government that promotes a culture of reading books may have a positive impact on Amazon’s business model. Such a move would lead to an increase in demand for books. In today’s information age, many people would opt to buy books online. In this case, Amazon would most likely be the first online book store of choice.

Economic factors

Online business continues to provide numerous opportunities and will continue doing so in the foreseeable future. According to Phana & Vogel (2010), online companies continue generating billions of dollars in sales annually. Being an online company, Amazon.com might also benefit by tapping into some of these opportunities. However, online business is not immune from the economic crises that have become common in today’s world of globalization. The e-commerce industry is particularly vulnerable to turmoil (Casey, 2007).

Today, internet retailers continue to face intense competition, making it difficult for them to gain a larger market share. The number of competitors is extraordinarily largely because of low switching costs and ease of entry. The greatest strategic benefit for Amazon is that it is among the existing multi-channel online retailers that pose stiff competition to online startups. To survive, Amazon must keep promoting efforts that will lead to the establishment of a competitive advantage as far as e-commerce strategy is concerned. Through strategic positioning, the company can succeed in beating competition and maintaining consistency, suitability, acceptability, and feasibility as an online bookstore and general merchandise retailer. An important component of this strategic positioning involves the ability to continually build a sustainable competitive environment in which value for customers, the firm, and its shareholders is created.

On the negative side, many people see internet business as a dangerous venture that has driven many startup companies to extinction. In the mid-2000s, hundreds of online businesses collapsed (Chang, 2010). Examples include Etoys, Boo.com, Webvan, and Onsale (Chang, 2010). Moreover, many more continue to cling to existence. The collapse of these online firms left the dreams of many entrepreneurs, venture capitalists, consumers, and shareholders shattered. The entrepreneurs who started these online businesses perceived a future where the market would be revolutionized, creating new frontiers of wealth creation.

In 2003, Amazon’s founder, for the seventh year, still faced the ever-growing challenge of convincing shareholders that the long-term approach he had adopted, that of offering the lowest prices to customers, was the best way of bringing about long-term value. He also argued that it would create quality customer experience. The challenge of convincing shareholders kept growing because the company profit margins had started falling below those of traditional brick-and-mortar companies. Sales for the company had increased from $3.9 billion in 2002 to $5.2 billion in 2003 (Ratnasingham, 2006). This growth resulted from the lucrative partnerships that Amazon had entered into with Target, Drugstore.com, and Circuit City (Ratnasingham, 2006). However, critics continued to  grumble because the company was yet to post a substantially profitable year. This demonstrates the numerous challenges that online companies encounter as far as the economic environment in the e-commerce industry is concerned.

Sales of books might be adversely affected by a sluggish economy or a low GDP rate in various countries. During an economic crisis, few people would be interested in buying books. At the same time, such a downtown in a country’s economic fortunes may lead to layoffs, downsizing, and retrenchment. In a country or region where the rate of unemployment is high, people would tend to decrease expenses on items such as books. This would have a direct negative impact on Amazon’s sales. Similar effects may be experienced with regard to income distribution. Amazon.com may benefit through access to information on income distribution as this would greatly inform the company’s decisions as far as pricing of books and other products is concerned. Pricing products competitively is one of the biggest steps towards suitability, sustainability, validity, and acceptability of Amazon’s business model.

Social factors

Amazon.com is likely to be affected by differences in social practices of customers from different parts of the world. This is a major challenge that managers of online companies have to encounter in their day-to-day operations. The cultural values and beliefs as well as social practices tend to change from one geographical region to the other. In some regions, there is a strong belief in the importance of reading books. In such regions, the company might be optimistic about prospects of gaining a large market share. In other regions, such a culture does not exist, meaning that demand for books offered for sale through Amazon might be low. To address this uncertainty, the best thing for Amazon is to diversify into other products. This is precisely what the company has been doing in recent years. It has been diversifying into other products such as music, videos, electronic items, toys, and household items.

Technological factors

Today’s pace of technological advancements is very fast. At Amazon, technology is one of the key pillars of business operations. The company’s top executives must always keep track of changes in technology to maintain the relevance of their business model. For instance, IT systems need to be upgraded frequently in order to ensure the suitability and security of the company operations. Without proper upgrades, timely response to the requests made by customers may not be achieved, leading to lack of customer satisfaction.

As a technology-oriented company, Amazon needs to keep adopting the latest technology all the time as a way of gaining competitive advantage. One of the ways through which Amazon has endeavored to gain competitive advantage through technology is the use of One-Click Shopping. The company has even patented this innovation to prevent competitors from copying it. The design of the company’s website is also of exceptionally high quality.

Over the years, numerous regulations governing the technological environment have been introduced. Failure by Amazon to comply with these regulations may jeopardize its operations. In many cases, laws governing technology tend to vary from one country to the other. For example, U.S. cyber laws are in some ways different from China’s cyber laws. Amazon might need to understand China’s cyber laws to be able to comply with them.

On a positive note, Amazon is in a position to exploit the numerous business opportunities that keep emerging in the world of technology. To do this, Amazon needs to embrace technological innovation. Leadership in innovation would guarantee acceptability and consistency in the company’s operations. The company would be in a position to set the pace in technological developments affecting e-commerce. In this way, very few disruptions in customer service would be encountered in the process of shifting from one technology platform to the other. By adopting an innovative approach, a company such as Amazon is able to anticipate and plan for such future disruptions beforehand.

Today, technology has emerged as one of the leading drivers of globalization, which in turn, has revolutionized the way business is done. Amazon’s operations are an embodiment of the gains made by large corporations through globalization. It is true to say that globalization has created endless opportunities for Amazon to expand its scale of operations to cover a global market. Globalization has created wider delivery areas for Amazon. The ability to cover these areas calls for the use of the right technology, manpower, and overall business strategy.

Environmental factors

One of the most critical environmental factors for Amazon.com is population growth. The world’s population continues to grow steadily and is expected to maintain this trend in the immediate future. This growth translates into an increase in the size of the global market. The demand of this expansive market is also expected to increase as well. This presents Amazon with a business opportunity to widen the coverage of its market in different parts of the world.

Attention should be on not just population in general but also the population age mix. For an online company like Amazon, the age of the population might have some far-reaching implications as far as demand is concerned. The choice of books and other products sold by the company such as music and videos is greatly determined by the age of the customers. For example, in a region with a high population of children, the best strategy would be for Amazon to focus primarily on the sale of children’s books. Similarly, the company might want to invest heavily in marketing teenage magazines in areas where teenagers constitute the largest demographic in the population.

Literacy rates also have an influence on the extent to which people are inclined to buy books. Similarly, different educational groups tend to seek different types of books. In this case, the best thing may be for Amazon to target its marketing strategies on specific groups such as schools, learning institutions, and professional associations. In today’s competitive online business environment, it is important for a company to target specific groups in order to increase chances of widening its target market. This is a challenging undertaking even for a successful online company such as Amazon. It requires  prudent, innovative, and creative use of technology and marketing strategies. In this front, Amazon is yet to achieve the level of consistency that is sufficient to ensure sustainability.

Legal Factors

Amazon has on many occasions been affected by laws and regulations governing e-commerce in different parts of the world. The company has also been affected by lawsuits arising from partnerships with other firms. E-commerce is a new industry, meaning that many grey areas are yet to be ironed out as far as legal aspects are concerned. Moreover, laws governing online business operations vary from one country to the other. Furthermore, by trading in books, music, and videos, Amazon became vulnerable to the controversies, ambiguities, and intricacies surrounding laws governing intellectual property.

In 2004, a lawsuit was brought against Amazon.com by a firm by the name Toys “R” Us (Casey, 2007). This company alleged that Amazon had allowed competitors to start selling products on the website that are exclusive for sale by Toys “R” Us. In this lawsuit, Toys “R” Us sought to either terminate the agreement it had entered into with Amazon or collect returned fees amounting to $200 million (Casey, 2007). Amazon held the view that the lawsuit did not hold merit and that it was at liberty to sell all products as long as the company did not end up competing with Toys “R” US (Casey, 2007). Later on, Amazon opted to launch a countersuit in which it would receive $750 million in return for the termination of the contract (Casey, 2007). This lawsuit illuminates the fragile nature of legal aspects particularly in the e-commerce industry where companies rely heavily on partnerships, mergers and acquisitions to survive.

Amazon’s Competitive Environment: Porter’s Five Forces Model

Threat of new entrants

In the world of online companies, the threat of new entrants remains high. This is simply because it is cheaper for any entrepreneur to establish an online bookstore than to start a physical bookstore. Any person with the technological knowhow and resources can set up a website similar to that of Amazon and start offering products at competitive prices. Moreover, it is easy for an established physical bookstore to exploit the advantage of expanding its operations to the internet. Such a business would have the advantage of having acquired some experienced through physical bookstore operations. For example, BarnesandNoble.com started as a physical bookstore business (Chevalier, 2008). Upon launching an online bookstore, the company suddenly transformed itself into one of Amazon’s main competitors (Chevalier, 2008). Other online companies that started their operations as physical bookstores include BookSense.com, Borders.com, and BookSite.com.

Nevertheless, there are some areas within the online store business where the threat of new entrants is low. For example, it would be extremely for a rival company to replicate the unique, costly information system being used by Amazon. The company’s One-click shopping technology is patented, meaning that it cannot be replicated by competitors. Additionally, Amazon is in a unique position as far as brand recognition is concerned. The company has already created a very strong online presence, to the extent that the public instinctively associates the buying and selling of books online with Amazon.com. Most of the company’s fiercest rivals such as eBay and Barnes and Noble have not succeeded in building such a competitive advantage.’

Threat of substitutes

In Amazon’s online business model, the threat of substitutes is always high. Many customers may prefer to buy books from the brick-and-mortar businesses where they have already formed close links. Such physical stores may seem more attractive to customers particularly if they have already succeeded in building a brand name. One of the few instances when the customer may be unwilling to switch to other products is when certain aspects of Amazon shopping are exclusive to this company by virtue of the power of patents. Moreover, some switching costs may be incurred, such as the requirement for the customer to enter his particulars all over again to be able to purchase a book from another website.

 

Buyers’ bargaining power

The bargaining power of buyers in this industry is high. Buyers tend to be assertive when buying items from Amazon.com because the same items may be on offer in rival websites at lower prices. More importantly, some upcoming online bookstores may be offering free (and in most cases limited) access to book, thereby creating a major disincentive for a customer to purchase the entire book for Amazon.com. A customer might not bother to buy the entire book if the content of the pages he is interested in is being provided free of charge in another website.

The same case applies to the other items to which Amazon has been diversifying its operations such as music, videos, and electronics. Today, online customers can buy music and videos from numerous websites that offer very low prices. Other websites even enable visitors to download the music free of charge in the hope of popularizing their websites and later on turning visitors into future customers. Furthermore, since these online companies have been in the business for a longer time, they pose a serious threat in terms of the quality of services provided. In many cases, Amazon is compelled to offer prices that are below the market average just to attract customers. This move creates discontent among shareholders, who have continued to express concerns about the viability, feasibility, suitability, and acceptability of this model.

Threat of rivalry in the industry

The degree of industry rivalry is very high in the online business. This is the case because the industry is crowded with competitors. Many online bookstores have sprung up. These bookstores are in direct competition with physical bookstores. Similarly, most online and offline bookstores have diversified their businesses into the sale of other products just like in the case of Amazon. For an online enterprise such as Amazon, the greatest degree of rivalry is posed by established physical bookstores. These bookstores tend to have greater brand recognition and a wider customer base.

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The company’s diversification efforts into the music industry have also led to new frontiers of rivalry. The level of rivalry in the online music industry is even higher than in the book industry.  Rival music companies such as CDNow have responded by putting in place mechanisms that make it more difficult for Amazon to gain a significant market share (Clay, K & Krishnan, 2011). CDNow has an upper hand in these efforts by virtue of its greater brand recognition (Clay, K & Krishnan, 2011). At the same time, Amazon’s rivalry with eBay reached new heights following the former company decided to venture into the auction business. Consequently, Amazon has failed to achieve outstanding success on the online auction business. From these examples, in most of the sectors in which it operates, Amazon faces a high degree of rivalry.

Suppliers’ bargaining power

Suppliers’ power remains relatively high in the online business. However, this applies predominantly with regard to electronics. This is because of Amazon’s inability to purchase these products from the manufacturers such as Panasonic, Pioneer, and Sony. The tendency by Amazon to sell its products below market prices made the customers triggered an outcry from the customers of distributors. For this reason, distributors stopped channeling their merchandise directly to Amazon. In contrast, suppliers’ bargaining power in the book sector at Amazon remains low. This is primarily because of the ability by Amazon to stop depending on Ingram, the main distributor. This phenomenon has also been contributed to by the automation of five of the company’s distribution centers within the United States.

Amazon’s Strategy Capability: SWOT and Value Chain Analysis

SWOT analysis

Strengths

First, Amazon benefits immensely from new skills gained through acquisitions. The company’s IT system is strong and unique. Moreover, the company has succeeded in offering a wide range of products at low prices. Moreover, Amazon has a strong brand image, which enables compete favorably with rival companies.

Weaknesses

The main weakness is lack of product differentiation. Another weakness is low profit margin. Moreover, the large base that the company has established in terms of product lines has created a tendency by the company to lose focus. This makes the company vulnerable to actions of rival companies keen to reduce its ability to break into certain markets.

Opportunities

Amazon has an opportunity to venture into the global market. It also has an opportunity to invest in online movies. Another opportunity is in the expansion into the technology service market. The company is in a good position to exploit this opportunity because of its excellence in the area of IT systems. Amazon also has an opportunity to promote growth in its cloud computing business.

Threats

The main threat is that Amazon depends on vendors to succeed in its online business. Moreover, the threat of fierce competition should not be overlooked. Additionally, the threat of various governments constitutes a major concern for the managers and shareholders at Amazon. This threat is likely to increase in the future as Amazon seeks to expand its business globally, thereby creating the need to transcend boundaries operating under different governments.

Value chain analysis

Amazon’s value chain is unique in many ways. By ordering directly from distributors, the company avoids the need to maintain large overhead and inventory levels. Prospective authors are contracted to print a specific number of books depending on demand (Korfiatis, 2012). The first run printing may range between 5000 and 50,000 copies (Korfiatis, 2012). However, in the case of best-selling authors, hundreds of copies may be printed in the first run (Korfiatis, 2012). In essence, the products that Amazon offers for sale on its website are routinely received from publishers, manufacturers, partners, and distributors.

In terms of Porter’s (2006) value chain, the main aspects include inbound logistics, operations, and outbound logistics. Others include marketing sales and customer service. Additionally, the support activities that contribute to value chain include procurement, human resources management, technology development, and firm infrastructure. According to porter (2006), value chain analysis is an excellent tool for defining the business strategy of a company. On this basis, the value chain analysis of Amazon portrays a picture of a business that is performing similar activities in different ways.

There are many examples that demonstrate Amazon’s strategy of performing similar activities in different ways. For example, Amazon started building an online bookstore when all other businesses were building brick-and-mortar bookstores. Moreover, Amazon endeavours to achieve the goal of being the most customer-centric company. To achieve this goal, the company focuses on the “customer service” and “marketing and sales” components of the value chain. There is also emphasis on growing larger, particularly with regard to the range of products offered. This explains the company’s tendency to partner with existing companies as well as launching new ones. It is also for this reason that Amazon has not been focusing too much on operations and inbound logistics.

Amazon’s Corporate Strategy: Consistency, Suitability, Validity, Scceptability, and Feasibility

The corporate-level strategy of Amazon focuses on using new approaches to perform similar business activities. Amazon has been consistent in the use of the element of radical adjacency. Through radical adjacency, the company is able to go beyond conventional business practice and to seize opportunities available in adjacent markets.

In terms of suitability, the most ideal aspect of the company’s corporate strategy is the use of a new business platform. The facilities and rules that Amazon uses to manage and organize its e-commerce platform are suitable for use in today’s information age. This platform is characterized by the apps community, a reviewer database, and the Amazon Marketplace. Through this marketplace, vendors are able to sell their merchandize through Amazon. At the same time, the company continues to excel in the area of self-publishing and digital rights management. To enhance the brand visibility and validity of this platform, Amazon has linked it to the device known as Kindle (Loebbecke, 2010). However, writers are compelled to go through numerous glitches to have their book published in a perfect manner through Amazon.

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In terms of acceptability, focus should be on the Amazon ecosystem. In the Amazon ecosystem, success is strongly tied to the ability by the company to scale business in such a way that value is created to all the parties involved (Filson, 2011). These parties include merchants, publishers, reviewers, writers, and app developers (Filson, 2011). The business strategy also creates an information market that brings together journalists, commentators, and analysts (Filson, 2011). This has created a scenario where thousands of companies have pegged their future on the success of Amazon’s corporate strategy. This element of shared value makes the company’s corporate strategy appear acceptable.

In determining the feasibility of Amazon’s corporate-level strategy, attention should shift to the leadership values of the company’s leaders. By embracing the value of radical adjacency, these leaders have demonstrated their willingness to veer away from the old management theory that emphasizes on the notion of core competency (Mudambi, 2010). In the context of a platform that allows for shared value, customer focus, and the ability to jump into new opportunity that emerge in new markets, Amazon’s business model becomes feasible and acceptable in today’s age of e-commerce.

Conclusion

In conclusion, Amazon is strategically positioned as the largest company in terms of both sales revenue and range of products on offer. This strategic positioning will continue to enable the company build on its ability to gain new skills through acquisitions and strategic partnerships. Today, the company’s corporate-level strategy emphasizes on radical adjacency. This approach will continue to be suitable, feasible, and acceptable as long as it enables the company tap into emerging opportunities in new markets. Success in this aspect will depend largely on the company’s top leadership. The leadership must maintain focus on the value chain that focuses on customer service. This will enable Amazon achieve the goal of achieving shared value and higher profit margin.

 

References

Casey, R 2007, ‘The impact of e-commerce industry turmoil on amazon.com: A strategic perspective’, The Internet Business Review, vol. 2, no. 1, pp. 1-18.

Chang, V 2010, A Review of Cloud Business Models and Sustainability, Heinemann, London.

Chang, V 2010, Cloud business models and sustainability: Impacts for businesses and e-research, Routledge, London.

Chevalier, J 2008, ‘Measuring Prices and Price Competition Online: Amazon.com and BarnesandNoble.com’, Quantitative Marketing and Economics. Vol. 1, no. 2, pp. 203-222.

Clay, K & Krishnan, R 2011, ‘Prices and Price Dispersion on the Web: Evidence from the Online Book Industry’, The Journal of Industrial Economics, vol. 49, no. 4, pp. 521–539.

Filson, D 2011, ‘The Impact of E‐Commerce Strategies on Firm Value: Lessons from Amazon.com and Its Early Competitors’, The Journal of Business, vol. 77, no. 2, pp. 108-121.

Kha, L 2010, Critical success factors for business-to-consumer e-business: Lessons from Amazon and Dell. University of California Press, Berkeley.

Korfiatis, N 2012, The Impact of Readability on the Usefulness of Online Product Reviews: A Case Study on an Online Bookstore, Harvard University Press, Boston.

Loebbecke, C 2010, Innovating for the Mobile End-User Market: Amazon’s Kindle 2 Strategy as Emerging Business Model, Blackwell Publishing, New York.

Mellahi, K & Johnson, M 2008, ‘Does it pay to be a first mover in e-commerce? The case of Amazon.com’, Management Decision, vol. 38, no. 7, pp. 445 – 452.

Mudambi, S  2010, ‘What makes a helpful online review? a study of customer reviews on amazon.com’, MIS Quarterly archive, vol. 34, no. 1, pp. 185-200.

Nicholas, D 2010, ‘E-textbook use, information seeking behaviour and its impact: Case study business and management’, Journal of Information Science, vol. 36, no. 2, pp. 263-280.

Phana, D & Vogel, D 2010, ‘A model of customer relationship management and business intelligence systems for catalogue and online retailers’, Information & Management, vol. 47, no. 2, pp. 69–77.

Porter, M 2006, Strategy and society, Harvard University Press, Boston.

Ratnasingham, P 2006, ‘A SWOT Analysis for B2C E-Commerce: The Case of Amazon.com’, International Journal of Cases on Electronic Commerce, vol. 2, no. 1, pp. 1-26.


 

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