Introduction
Jeffrey Bezos established Amazon in July 1994 as an online bookstore that later diversified selling items such as music, video games, DVDs, and clothing. The idea to set up his own company came at a time when he was an employee at DE Show in New York. After reading that the internet had recorded a growth of 2300 percent in 1994, Jeff started thinking of taking advantage of the growth and settled on books. He opened his first store in a garage in the city of Seattle, and thus Amazon was born. Within the first month of founding, Amazon retailed books to all States in America and exported to more than 45 countries in the world. Jeff had a clear vision on how to achieve growth through leveraging on the internet, and within five years of operation, he was named "person of the year" by Times magazine in 1999 ("Understanding Amazon.com's History and Corporate Culture", 2020) . By the year 2000, the company had already added consumer electronics, home improvement products, toys, and games, among others. The company added a cloud computing product that offered cloud computing and storage services. Other trademark products include Kindle, a book purchase and reading application, and publishing company Amazon publishing and in more recent past delivery services through drones. The paper analyses the strategies Amazon has adopted as it continues to grow over the years and explores the company's missteps, and the policy that the company should take in the future to maintain its competitive edge.
Amazon sacrifices short term profits for long term sustainability of its business model. The long-term perspective enables Amazon to target better performances in the future through sacrificing short term goals and ensuring the company faces any short-term risks associated with the strategy. An example is the Amazon Web Services, which was founded in 1996 as a start-up providing storage services but has since grown into a million-customer web services provider. In the words of Bezos, "We are comfortable planting seeds and waiting for them to grow into trees, we do not focus on the optics for the next quarter; we focus on what is good for customers…" ("Amazon.com case study | Smart Insights", 2020) Jeff maintains that he will continue to make long term investment decisions to gain market leadership with little thoughts about short term gains or share price reactions. It took Amazon web services more than ten years to reap benefits with millions in customers and acceptability by big corporates like Johnson and Johnson, Airbnb, McDonald's, among others.
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Jeff Bezos has always maintained that Amazon is a customer-focused company and not competitor focused and always aims at achieving customer satisfaction by being ahead of customer needs and preferences. The strategy is improving customer experience through the provision of low-priced merchandise, convenience, and a variety of products (Keller, 2020) . Besides, Amazon has a strong focus on maintaining customer loyalty on the basis that a loyal customer makes repeat purchases. Moreover, Bezos continues that they are not satisfied unless customer satisfaction levels hit 100 percent.
Another critical strategy of Amazon is focusing on factors and features that rarely change. Basing a strategy on changing factors like competition puts a company on a reaction rather than innovation mode. Jeff maintains that variety, low prices and faster delivery to customers is critical in business and are factors that are likely not to change in a long time.
Application of new technology in all its spheres of operation has given Amazon a competitive edge, and it's a crucial strategy that enables the company to maintain market leadership. Technology has been adopted in every vital area of business, including decision making, product processing, and integrated into all processes. Jeff says that innovation must not be all about new ideas but finding creative ways to serve customers ("Amazon.com case study | Smart Insights," 2020) . Kindle application was revolutionary, and no more books are sold through it than hard copy ones. Other technologies include Amazon Echo that enables customers to shop and check out without queuing.
A journey to success has not been smooth to Jeff Bezos and Amazon. The long-term strategic approach has caused Amazon a few problems in the past. In the early days of Amazon, Jeff made risky moves for the company, such as investing in new warehouses that had stock prices drop with huge margins. Other investments by Amazon that failed to pick up such as LivingSocial, in which it lost $175 million. Amazon had bought its competitor in Living Social, which was loss-making business and dented Amazons earnings as it registered a loss of $ 274 million net in 2012. Also, the struggle between Amazon and Apple after Apple demanded a 30 percent commission on application purchases, which Amazon tried to bypass. The move made iPhone users having to make a two-step move to read books, download first, they read using Kindle.
More recently, the company has faced challenges in finding a new location to build a new headquarter. Though some cities offered incentives, others argued it should be Amazon coming up with offers on how it will impact on the town (WSJ, 2020) . Besides, the company has faced criticism on how it treats its staff with allegations that it fires staff via an app and does not keep pregnant employees. The company has been accused of listening to recordings made by customers on the Echo product, which is unethical.
Continuous innovation is a critical strategy in meeting customer requirements and improving their experiences. The company will continue to adopt artificial intelligence, such as robotics, to hasten delivery times. Acquisition of competitors in the cloud computing business will grow Amazon web services market share and improve on cash flows. Expansion to the emerging and underexploited markets continue to provide Amazon with an excellent opportunity for growth. There are possibilities that Amazon could enter the fintech business as it trials the issuing of loans to online sellers to improve their portfolios in India.
Conclusion
Jeff Bezos found Amazon in 1994 after resigning from a well-paying job in Wall Street to take advantage of the growing internet. He figured out the best idea was to sell books and settled in Seattle, and Amazon opened its door for the first time. Since then, Amazon has grown into the biggest corporation in the world, with revenues of more than $200 billion in 2019. The tremendous growth has been accomplished through the stewardship of Jeff Bezos, who adopted various strategies aimed at creating value by leveraging mainly on technology. Key strategies include sacrificing short term gains for long term sustainability. Amazon Web services established in 1996 as a cloud computing technology at a time little was known about cloud computing but currently is the among the best in the business with millions of customers. Besides, Amazon maintains a deep focus on customer experiences and being step ahead in terms of needs. Focusing on customers encourages innovation and continuous improvement rather than being competitor focused, and these values do not change in a long time since customers will always need quick delivery, low prices, and variety. Though these strategies have enabled Amazon to achieve tremendous growth, there have been handles along the way. The company lost a considerable sum on Living Social, a competitor it acquired and immediately drained its money and never recovered. Also, through the risky moves by Jeff made Amazon take a dip after he bought warehouses based on long-term strategy but created ripples that almost caused its shares to crash.
Moreover, Amazon had a scuffle with Apple regarding commissions on sales made through Kindle on Apple phones. Apple discontinued the link after Amazon refused to pay, and that creates an inconvenience for its customers. There are also allegations of stifling employee rights, and cases of mistreatment have been recorded. Projections show Amazon will continue to grow through continuous innovation, especially in artificial intelligence. Expansion into the emerging markets remains an area of interest for Amazon as it continues to assert as a global corporate with possible diversification into fintech business.
References
Amazon.com case study | Smart Insights . Smart Insights. (2020). Retrieved 30 May 2020, from https://www.smartinsights.com/digital-marketing-strategy/online-business-revenue-models/amazon-case-study/
Keller, C. (2020). Amazon's Business Strategy & Leadership In Online Retailing . Profitworks.ca. Retrieved 30 May 2020, from https://profitworks.ca/small-business-sales-and-marketing-resources/blog/marketing-strategy/543-amazon-business-strategy-leadership-online-retailing.html .
Understanding Amazon.com's History and Corporate Culture . The Balance Careers. (2020). Retrieved 30 May 2020, from https://www.thebalancecareers.com/amazon-com-company-research-2071316 .
.WSJ, C. (2020). Amazon's inevitable missteps becoming a problem for its products, services . Business-standard.com. Retrieved 30 May 2020, from https://www.business-standard.com/article/international/amazon-s-inevitable-missteps-becoming-a-problem-for-its-products-services-119051200015_1.html .
