This essay focuses on where Amazon company derives its competitive advantage and how it has evolved over time and strategies adopted by the company to maintain its market dominant position in the retail market industry in the United States.
Amazon's strategy is based on four strategic pillars. The strategies include a focus on the customer instead of competition focus, invention and innovation, commitment to excellence, and long-term thinking. Amazon's first strategy is customer-orientation. Customer orientation is based on the allegories; " Know thy customer " which implies that the business understands customers' needs and wants. " Maximize data " meaning that the business leverage on customer data and behavior to create a personalized customer experience. " Obsess with customer service " - built from the top-down, made a strong customer connection leading to more useful feedback to focus on what matters to the customer. Second, Amazon has been developed based on a passion for invention and innovation. Amazon is known to drive its innovation from the top strategy. Every idea is high value at Amazon, and the design and development department take them seriously. For Amazon, all ideas are vital and is viewed as a company's core asset. The managers promote the concept of ‘move quickly, experiment continually, and fail fast.’ Amazon is also a data-driven firm. Amazon is a risk-averse company, demonstrating that it is always ready to take the risk to try new things. Third, Amazon, Inc. is highly committed to excellence in its operations. The company maintains a high level of focus on having efficient and effective processes in enhancing its products, services, infrastructure.
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Amazon has evolved from a one-person business to a conglomerate. Amazon has, over recent years, pursued online commerce opportunities. The company started with books but expanded into Streaming Music, Videos and video games, Amazon Marketplace, Amazon web services, Clothing, Food, and smart devices. Amazon strategically acquires companies that gives it some strategic benefits. For example, Amazon bought Audible at $300 million that made it transform to the king of the eBooks company through kindle in 2008. Amazon further acquired Zappos as a strategy to boost in the shoe sales in 2009 and bought Kiva systems to increase automation in their fulfillment centers. Amazon acquired Twitch to strengthen Amazon Web Services, and Wholefoods adds to Amazon's new service. Amazon also introduced ways of making shopping convenient, for example, Amazon prime and robust delivery. The robust delivery systems saw amazon signing a partnership with the post office to deliver on Sunday, having same day shipping and next day delivery. Amazon further introduced new technology to make shopping easier. To make shopping easier, Amazon introduces 1-click to make shopping more convenient. Echo provides Amazon with consumer data and allows consumers to order without having to get on a computer.
A competitive advantage are factors that allows a firm to produce its goods and services more cheaply or manufacture much better-quality products than the competition. Competitive advantage gives a company an edge to generate more sales and gain better margins than the competitor. Amazon has been ahead of its peers on many fronts because of its competitive advantages. Amazon is highly adaptable company. Amazon's fulfillment centers are sources of competitive advantages, allowing the company to offer lower prices, fast delivery, and reliable servic e. Another critical Amazon competitive advantage is Market Share and Cash flow. Cash flow and financial strength allow Amazon to acquire companies that can make them more efficient; the company can also take losses to expand market share even further.
Amazon, like any other corporation of its size, has its shares of challenges. Bezos purchased The Washington Post in 2013 and has sparred with the now President Trump ever since. Trump's reelection campaign recently sued The Washington Post , in a defamation lawsuit revolving around two opinion pieces published by the paper. The reports raised concerns that President Trump had help from Russia to boost his campaign. The President has also publicly quarreled with Bezos and even interfered with Amazon's e-commerce business by doubling the firm's postal service rate and other companies to ship packages. Corona Pandemic has inhibited with Amazon both socially and economically. The sales have declined due to restricted socialization and movement by the government.
A distinctive competency refers to a company's quality or strength like resources or skills that separates it from its competitors to offer unique or superior customer value. A company acquires a distinctive competency with time, and it is something that is not easy to imitate. Amazon's unique competencies include its distribution and logistics , creating self-sustaining platforms, technologies, and brand recognition.
From day one, Amazon has intelligently crafted its strategies to be aligned with its core business objectives. The company strategies have played a critical role in shaping its distinctive competencies. For example, Amazon's focus and obsession with the customer rather than competitor focus and commitment to operational excellence have led to their emphasis on distribution and logistics. Amazon's passion for invention and long-term thinking focus led to creating self-sustaining platforms and long-term thinking.
Amazon is always in constant motion to improve its efficiency, increase reliability, and make the business better. This continuous improvement means that the company must be on a continual gear to discover and build new competencies. Amazon has displayed that it is always looking to be the most customer-centric company in the world.
While Amazon is always on heels to build new competencies, it still experiences barriers to imitating the distinctive strengths . There is always an ongoing innovation at Amazon; the company continues to invest in technology that provides even more services to its customers. Scale - They can continue growing by centralizing their focus on customers through all of their projects, hiring employees that fit their culture through their bar raiser evaluation. The company is also on the move to build its brand identity amongst the global customer.
There is no evidence that Amazon is finding it difficult to adapt to the changing industry conditions. Amazon does not find it challenging to adapt to changing industry conditions. The company has shown a knack for keeping ahead of the game primarily due to their long-term focus and preparing for changes they foresee. To remain at the top of the game, Amazon has invested in research and development. The company welcomes new ideas in its areas of operation, including cloud computing.
Amazon is currently the leader in its business. Complacency can make the company lose track, and other competitors take over the lead. Amazon must keep a constant tab on what the competitors are doing to remain at the top. There must always be a drive to push its technology to the next level. To always stay relevant and at the top, amazon must give a listening ear to the customer more than ever. Customer demands must be integrated into the services. Amazon, therefore, needs to keep focusing on customers as you develop new technologies or venture off into new industries. The company must also focus on reducing logistic and shipping costs by investing in developing drone technologies and automating fulfillment centers.
Amazon has been successful because of its strategy and competitive advantages. As discussed, amazon enjoys strong financial standing that enables it acquire strategic companies, the human resources are highly productive and innovative, and it takes advantage of technologies.
