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Strategic management is the process of planning, monitoring, analysing and assessing all the necessary needs of an organisation in order to meet the goals and objectives it has formulated. With the help of the process of strategic management, the organisation is able to analyse the effectiveness of all the implemented strategies within the workplace. This report will focus on the strategic business issues within Amazon along with providing an overview of the strategic decisions that have led the organisation to the current position. It also describes the impact of strategic issues on the performance of the company.
The company is guided by four basic principles which include their expression on customers rather than the focus on competitors, passion for inventing new ideas, committing towards operational excellence and thinking about the long-term benefits of the company (Baboolal-Frank, 2021). With the evolution of their business structure over the years, there has been a constant responsibility of the organisation towards fulfilling the desire of their customers at a lower price, convenient service and better selection.
Being one of the largest E-Commerce platforms, the profitability within the company isn't guaranteed. There is a huge fluctuation in the profit generation of the company as this major factor is dependent on the sales structure of Amazon along with its profit margins, shipping cost and competition in the particular category. Keeping a continuous analysis of the changing performance and profitability of the market place in an accurate manner and in a timely way is quite challenging (Sadq, Sabir & Saeed, 2018). In order to understand the profitability segment of the company, the employees have to go about out a complex way to gather data and analyse it. If an individual is involved in running a hybrid program in Amazon between 1P and 3P along with running different campaigns of advertising, they have to focus on downloading reports from different interfaces so that they are capable of figuring out of way to merge the gathered data in a systematic and organised way in order to have a better understanding of their profitability (Applegate, Austin & McFarlan, 2016).
With the increasing competition in the market, certain industries on Amazon particularly that of electronics and nutrition supplements are very saturated. This makes it difficult for the company to enter the marketplace that is so competitive and secure a particular market share for itself. It has been often heard that increasing competition from the various new sellers in particular categories is a major challenge that brands often face (Cusumano, Gawer & Yoffie, 2019). So whether Amazon is reselling its product or competing by manufacturing their own products, it is very important for them to constantly be in the competition by performing a competitive analysis so that they can rigorously improve and evolve their strategy to stay ahead of their competition.
These factors led Amazon to focus on their product quality so that it can improve their organic ranking as well as search results along with their conversion rate in a significant way. The company has been continuously evaluating their product mix strategy so that they can manufacture and produce unique products and satisfy the demands of the customers. According to Sebastian et al., (2020), Amazon invests a lot of money in paid advertising strategy so that it can play sponsored product as of its manufactured products with the help of strategic keyword and bidding process which will help the company in driving traffic to their official website.
The business strategy of Amazon focuses on compiling all the ideas, innovations, partnerships, technological research along with the crucial strategies that are responsible in helping the company grow to such a huge level. Internet has been a huge factor that has contributed in the growth of Amazon but technological innovation, the marketing strategy and more importantly the business model that has been implemented by the organisation has been the major factors that have contributed in innovating the various aspects of the company that has helped them in such achievement and development in the current scenario (Betz, 2016). Since Amazon has acquired Zoox, it has left a significant impact on the logistics, food delivery domains and ride-hailing aspects of the company. The organisation has a huge diversified patent portfolio such as Cloud Computing which is one of the third biggest sources of revenue for the organisation. They have also started filing patent applications for other sources of revenue such as Speech Analysis (Alexa) and Augmented Reality. In terms of maintaining Logistics, the company competes with different companies of traditional logistics such as DHL and FedEx (Wu & Gereffi, 2018). With the help of its business model and crisis management strategies, the company has been able to come up with an action plan during the pandemic when every organisation in each sector was going through the global crisis. The futuristic plans and ideas of the company are one of the major pillars which enable them to think for the long term. It has showcased how Amazon has innovatively come up with various strategies and ideas when it comes to delivering simple items to their customers so that they have a better experience using the products and services offered by the company (Aversa et al., 2021).
The company has also been aggressively harnessing its acquisition and merger strategy. All these mergers have helped the company in strengthening its operations and core e-commerce business activities. The company has also invested huge amounts of money in technology which has helped in meeting the needs of the employees and increasing their productivity with the help of advance implementation of cyber security player and Do.com (Broos & Marcos Ramos, 2017). The company has also acquired the grocery giant Whole Foods which has been a huge step for the company in terms of surrendering in grocery business in the E-Commerce platform as well as opening doors to new and enhanced opportunities. The company has also been measured experimenting with the various initiatives of fintech and interns on becoming a prominent player in the segment of fintech. In India, the company acts as a huge source of granting loan to the various e sellers and suppliers for the purpose of expanding their operational aspects as well as managing the seasonal spikes (Arnett, Goldfinch & Chinta, 2018). With its strategic planning and implementation, the company has been able to make big moves in markets that are emerging. The company also comparatively announced its expansion in the marketplace of electronics and appliances. It can be said that Amazon is one of the fastest growing e-commerce platforms that are operational in the Middle East.
The company has also trivially changed its investment Strategies and have introduced channelizing their investment in industries such as auto and transport, media and mobile. According to Zhou et al., (2020), they also made a huge sum of investment in the UK based Yodel Delivery Network for the purpose of expanding their logistic network in the UK. It can be said that the business strategy implemented by Amazon is one of the cost effective strategies that helps the company in remaining in position along with maintaining that position. It has provided the company with an advantage and competitive edge and helped them in growing business and expanding their operations across the globe. Amazon wonderfully enters new markets and niches at a frequent level. This helps the company in keeping up with the pace and changing trends of the business environment (Wegmann et al., 2018). They have also been working towards enhancing their core business structure as well as strength in the Amazon ecosystem. The senior leadership of the company engages themselves in deriving maximum amount to benefit from each aspect and components of the companies ecosystem so that they can strengthen their relationship between all the major components that are operational in the company. The company has never compromised on its customer obsession because they are usually customer centric. All their business activities and strategic planning are focused on satisfying the needs of the customers so that they can make a huge customer base as well as provide immense satisfaction to the customers through their offers and discounts along with the experience they provide to them (Grab, Olaru & Gavril, 2019). They have planned their strategies in such a way that it does not bother Amazon with their competition. Instead they work on their competitiveness as well as the innovative factors which have helped in creating competitive advantage for the company.
Their business strategies are formulated and implemented by the leaders and managers of the company who are highly talented and skilled in terms of attaining those business goals. the employees of the company take huge overloads which sometimes make them sacrifice their work life balance (Harracá, 2017). They insist on deep diving into the factors that create an enhanced experience for the customers and believe in studying the changing trends in the customer behaviour so that they can meet them effectively. As the company aggressively expands their range of products and services within the ecosystem of Amazon, it is not suitable for them to classify its business operations within a limited industry (Arnett, Goldfinch & Chinta, 2018). The business strategies and models implemented within the company focuses on expanding their activities across the globe by focusing on Revenue generation and long term growth of their profitability.
With the help of Analytical Decision making and expertise decision making, Amazon has been able to generate customer satisfaction. Amazon is an organisation that totally focuses on building the image of the brand based on aligning its operational activities on customer satisfaction. It can be said that Amazon is customer centric. The employees and the management of the company work hand in hand towards becoming one of the most customer friendly companies on the entire planet. The brand has invested in advanced technologies and invested in them so that they can enhance their logistics applications along with improving their web services by fulfilling their capacity in different departments (Athey & Luca, 2019). Apart from this, the Strategy followed and implemented in the company is totally driven by the source of its competitive advantage which is fully focused on technology. The strategic decisions made by the company are based on its mission and vision along with its objectives which has helped in providing the company with the position that it has in the competitive marketplace (Tan & Carrillo, 2017). As the organisation has been able to provide higher quality products and services to its customers, therefore, it has been able to increase its sustainability in the marketplace.
The strategic decisions taken by the company has helped them in dealing with all the resource capabilities in a harmonizing wave considering all the threats and opportunities that the company might encounter. This enhanced the customer experience as the services provided by Amazon to its customers are of high quality, reasonable price, reliable shopping and so on. One of the major factors that have contributed to the enhanced customer experiences is that the company caters their product on display to each of the consumers on an individual level (Berg & Knights, 2021). Amazon has further integrated state-of-the-art technology into its operational business model. For example, Amazon Eco is a device that is operated with the help of a voice command and is helpful in terms of playing music, conducting research as well as checking the weather and so on. Around 22 million units of this product have been sold by the company making it an exceptional source of revenue (Athey & Luca, 2019). This can be one of the significant examples which have proven that the organisation is extremely popular among its customers as they help the organisation and add to the goals of Amazon by offering them convenience in shopping.
Amazon also works towards helping their customers with their queries and complaints. They have kept a separate page for customer service where different categories are provided so that the customers can choose from there. The company has also gained a huge amount of success by going beyond the online Marketplace and branching out into various other forms of business. For example, Amazon had recently opened an Amazon fresh grocery store which helped the company in creating and selling their own brand of products and snack food which has helped them in expanding their market further along with generating a huge amount of profit outside Amazon.com (Tan & Carrillo, 2017). Not only that, the company also provides its customers with regular discounts and provides a huge amount of products and services at reasonable prices.
With the help of this strategic decision-making within the organisation of Amazon, the company has been able to facilitate learning within the organisation along with improving their performances and outcomes. There were also significantly being able to reduce their probability of failure in strategies and competitions. It has also helped the company in making the business intelligence report so that they are able to study and predict the future trends and align the activities in such a way to mitigate those (Berg & Knights, 2021). The strategic decision making process is one of the most important techniques and tools that has helped the organisation in driving business growth. The strategic decisions formulated and implemented by the organisation have helped in the company being able to make good decisions which has been able to help them in achieving certain objectives. They have also been successfully able to translate into actions which have been helpful to them in terms of increasing their organisational efficiency. It can be significantly said that the ability of the company to make the right decisions is one of the major factors that is crucial in nature which is helpful in determining success and failure of the company (Tan & Carrillo, 2017). The way in which Amazon has been able to strategically make its decisions has been helpful in providing the organisation with strategic position in the marketplace.
Strategic surveillance pertains to long-term planning and objectives that facilitate a corporation to influence capacities, boost vacancies, and increase athletic benefit. While strategic supervision has several benefits, such as lessening opposition to alter and facilitating affiliation, it also has drawbacks. The strategic supervision procedure is complicated, time expending, and impossible to implement; it compels intelligent planning to prevent pitfalls (Athayde et al., 2019).
As we can understand in their comprehensive chart to peddling on Amazon in the year 2020, Amazon has greatly accomplished its career. Over the preceding 25 years, the corporation has given rise to the market a large variety of inventions and creations that have shifted e-commerce permanently. From a buyer's viewpoint, these inventions guarantee that Amazon is the niche to purchase anything and everything we want (Elias et al., 2021).
Strength - Amazon's corporation improvement procedure is problematic, particularly since the corporation competes in three important enterprises. Amazon has a lineage of precisely experimenting with indications and accordingly doubling down on what chores. As a corporation that is not surprised or shocked by disappointment, it subsidizes wealth to formulate a property or assistance even if the commodity is in danger of disappointment.
The abrupt proportion of data from Amazon has about its consumers is mental-boggling (Silva et al., 2021). Scarcely does Amazon utilize this data to enhance its undertakings and commodity contributions, but it furthermore pedals it to advertisers throughout the Amazon DSP strategy. Customers understand and have a liking for Amazon, and Prime partners are highly enthusiastic about the corporation. A current poll by the Consumer Intelligence Research Partners also abbreviated as CIRP exhibits that further than 100 million nations in the United States have accounts in Amazon Prime. CIRP calculates that 58% of Prime members reimburse the entire $119 annual expense, 36% stipends monthly, and the persisting 6% have a free prosecution (Lai, Liu & Xiao, 2018).
Amazon has a powerful attitude in any recent market it arrives in. Amazon has been prepared to influence its accepted trademark distinction, which gives raise to it such a danger to current markets. Amazon presently has a 31% demand share in Germany and 47% in the United Kingdom. Correlated to different global merchandisers, Amazon's logistics network is distant senior, which is one of the crucial paths Amazon, can accomplish its objective of becoming the most buyer-centric corporation on the globe. Amazon has subsidized largely in its logistics strategies, from diffusion centres near large towns to progressed automated networks that enhance efficiency. Despite its quantity, Amazon can give rise to sharp judgments to resist it forward. The corporation has various built-in strategies that maintain squads and determinations uncertainty and rapidly. The well-known network is the two-pizza statute, which maintains difficulty solving squads minor and executes judgment making (Arnett, Goldfinch & Chinta, 2018)).
Weaknesses - Just because Amazon is very huge doesn't imply it's inaccessible. The corporation furthermore has numerous shortcomings that render it susceptible. Amazon is a widespread corporation. It regulates a media enterprise that generates elevated quality TV sequences and pictures, a cloud-founded web provider, and an online merchandiser, all given rise to concurrently. This may be an objective for Amazon to monopolize numerous enterprises, but it furthermore restricts the corporation's proficiency to concentrate on one strategic objective. In some classifications, brand value is further crucial than others. The corporation Amazon has conventionally under accomplishment in these classifications where branding issues, such as style and homewares (Denning, (2018)).
Correlated to contestants like Target and Walmart, the company Amazon has an additional restricted brick-and-mortar existence. But that's altering as Amazon maintains a technique of transitioning from genuine performer to Omni channel monster. Amazon commenced this voyage with its accession of Whole Foods in the year of August 2017, its initial incursion into grocery marts. The corporation also formally declared that it will un-wrap its cable of grocery supplies, independent from the Whole Foods convoy (Baboolal-Frank, (2021)).
Opportunities - Alexa has been Amazon's strategic gesture to maintain customers latched into Amazon's procedure even worldly. While both functions of Alexa and Amazon Echo improve the corporation's goal of transmitting tremendous knowledge, the absolute courage for these properties is to give rise to the ordering procedure seamlessly (Gambon & Rist, (2018)).
Amazon's absolute objective is customer data, but that is not Dr. Evil's agenda to monopolize the nation. Amazon glimpses client data as a clue to transmitting additional significance to its clients. That is partially the impetus behind the development of Amazon's particular tag that is Amazon Basics. What commenced as an Amazon alternative for accusing cords and ordnance has broadened into a diversity of commodities, encompassing kitchen appliances. Nowadays, Amazon comprehends the whole procedure of a consumer from registering for an Amazon invoice, spotting an ordinance, and obtaining a commodity. Nonetheless, formerly the commodity is in the consumer's residence, the corporation ignores how the customer utilizes the crop. The closest they can give rise to is a study review (Athayde & Silva-Lugo, (2018)).
Threats - One of the enormous warnings Amazon will confront taking off forward is the endless discussion about what is confidential versus what is civil data. Despite its strength and power, Amazon is accountable to the statutes and restrictions of the nations in which it governs. Any comprehensive legislation reforms inaugurated in these nations could damage the corporation's proficiency to regulate. An instance might be modern data secrecy restrictions. If important overhauls imply Amazon can't receive as much customer data, it could damage the company. In additional pinnacle cases, antitrust constitutions could compel corporations to disband their industries to strive (Mahajan, (2020)).
The strategic issues that have been identified previously leave the direct and indirect impact on the performance and effectiveness of the organisation. As it is a well-known concept that strategy is one of the essential components of the management to which help the organisation in formulating a game plan for the purpose of strengthening their position as well as pleasing the customers and achieving various performance targets. If there are any strategic issues within an organisation, it results in impacting the decision making process of the company and has a negative influence on the financial performance of the organisation (Suoniemi et al., 2020). It has been significantly noticed that the issues faced within Amazon is leading the company into generating less profit for the operational aspects to run smoothly which might impact the quality and outcome of the services offered by the company to its customers. This can result in the decline in the loyalty of consumers because organisations are not able to manage their strategies and meet the requirements of the customers on the basis of their p
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