BA (HONS) BUSINESS STUDIES
STUDENT NUMBER: 000790448
MANAGING STRATEGY (BUSI 1484)
ASSIGNMENT 2: THE AMAZON.COM CASE
DUE DATE: 15/02/2013
WORD COUNT: 1625
INTRODUCTION The internal environment of an organization is unique to the business. In analyzing the internal environment of amazon.com, the following models are used: i. ii. iii. The Competency Framework Porter’s Value Chain The Vrio
Amazon is rated as one of the top 10 most successful online businesses in the world (Chavey, 2012). THE COMPETENCY FRAMEWORK Some of the competences that amazon has are as follows; Amazon’s ability to maintain a customer-centric strategy without sacrifice on quality is a competency to the organization, not all organizations can have such a strategy and be able to sustain it without having either the customer or the organization lose out. Amazon had built the ultimate virtual salesperson at the customer’s fingertips, by leveraging off information from millions of customer transactions and online windowshoppers. This competency was very powerful and other organizations had failed to produce similar market data on such a large scale (Stockport, 2010). Technology advancements and innovations is clearly one of amazon’s strongest competences, amazon emphasizes upon continual investment in technology, and also its founder Jeff Bezos, is a competence to the organization. The staff at amazon is also a competence to the organization, as well as its ability to invest in the future. SOME FEATURES OF AMAZON’S STRATEGY OVER THE PERIOD IN THE CASE STUDY Customer Reviews; amazon’s ability to provide a feedback form for the customers has enhanced its achievement in customer satisfaction. This focus has translated to excellence in service with the 2004 American customer satisfaction Index, giving amazon.com a score of 88 which was at the time the highest customer satisfaction in any service industry, online or offline (Chavey, 2012).
Web pages which are tailored to individual preferences such as suggested options, recommendations and notifications, this is a feature on its technology strategy. Amazon also offers free shipping to its customers thereby encouraging increase in customer base, though this is critical to profitability, amazon has successfully managed to sustain this as a competitive edge. Making popular products available to its customers and having three distinctive groups of customers, this is also a feature of amazon’s marketing strategy. PORTER’S VALUE CHAIN ANALYSIS Using this model, only the primary activities will be expressly highlighted as the support activities will be accordingly explained in the analysis. INBOUND LOGISTICS: Amazon strategically aligned its business with already established businesses, e.g Ingram books in the industry at inception of the organization. It also had access to a large supply of computer software talent. Furthermore the state of Washington had a more favorable sales tax climate (Stockport, 2010). Being an online business, amazon requires staff that has this computer talent. This means efficiency in the delivery of product and services and the daily operations of the business. As above cited, Bezos set up his company in a sales tax favored region of the country, which helps in cutting down operating costs. We also see how the location of the organization enables it to procure various resource inputs. OPERATIONS: Being an online business amazon’s human resource capability has sustainably benefited the company into successfully transforming its resources into ready products and services. Undoubtedly, the technology advancement of amazon enables the organization to operate on a 24hr basis. Amazon uses market segmentation methods which are; physical and demographical, this enhances the operations of the business. OUTBOUND LOGISTICS: Amazon has 80 fulfillment centers in the world to handle all of its orders. Amazon plans to open at...