Block 4 Collaborative analysis
External analysis (group A)
Internal analysis (group B)
Stakeholder analysis (group C)
Corporate-level strategy analysis (group D)
Competitive-level strategy analysis (group E)
Critical assessment of the analysis
Evidencing of contribution to groups
Reflection on group decision making
1. Group A analysis
Each member of team A used one of the many available frameworks to analyse the external environment of Amazon.com, focusing on the strengths, weaknesses, opportunities and threats facing the organisation. The findings of each member’s analysis were amalgamated to form the content of the following report. Using the following frameworks we have identified the SWOT factors facing Amazon.com: STEP, Strategic Group Analysis/Strategic Group Map, Porter 5 Forces, Porters Generic Strategies and Competitor Analysis. ANALYSIS
The far external environment STEP analysis has shown:
High barriers to entry for new competitors in the same cluster as Amazon.com, as there is a large investment in technology and marketing required in order to compete. Economic factors can affect the cost leadership approach of Amazon. Political issues are linked with sociological and therefore, are amplified for Amazon’s market.
The near external environment Porter’s 5 forces:
Supplier power is limited, as Amazon is potent customer, suppliers would not wish to lose them. Buyer power is low, as Amazon tends to offer the most competitive all round customer experience. The threat of substitute products is low due to the high barriers to entry, and there are no switching costs for customers (easy to buy from competitors) Amazon has joined forces with competitors (or hosts a web site for them) and therefore it can profit from their sales.
Strategic group analysis has shown that Amazon stands alone, with its nearest competitor being eBay. This tends to show that it is a market leader. Amazon is successfully implementing a cost leadership / differentiation strategy enabling it to increase its market share. This helps Amazon to continue as a market leader. Amazon’s collaboration with its competitors has allowed it to source new items and gain economic rents from its partners. Amazon’s cash flow cycle allowed it to receive money from a customer before it has paid its supplier giving the financial market more faith in Amazon allowing it to finance itself more easily. CONCLUSION
Team A has identified Amazon.com's key opportunities and threats through framework analysis. Growth, Technological, Collaborative and Flexibility opportunities enable Amazon to take advantage of changing STEP factors, conversely, Growth and Operations threaten Amazon's current and future position. Amazon has been able to use leverage within the market in order to persuade competitors to collaborate with them and therefore, gain economic rents from these partnerships. This has enabled Amazon to create intense market growth, which has both opportunities and threats and Amazon's response will determine its future success within these fluid markets. TEAM PROCESS
The activity was split into smaller tasks assigned to each team member in order to carry out our individual analysis reports on Amazon’s external environment, with each of us responsible for a certain framework. Due to our different availability, we were unable to organize teleconference meetings to make real-time decisions, and we communicate through asynchronous means on the Team A forum instead in order focused on coordinating our final report analysis, in which we used a consensus with qualifications approach. Appendix 1: SWOT
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References: 2. Leschly, S., Roberts, M.J. and Sahlman, W.A. (2003) 'Amazon.com - 2002 ', Harvard Business Review.
3. Viney, H., Winchester, N. and Boojihawon (2010). B301, Block 3 The Strategy Toolkit: The Open University.
4. Grant, R.M. (2008), Contemporary Strategy Analysis (6th edn), Oxford, Blackwell.
5. Porter, M.E. (1985), Competitive Advantage, New York, Free Press.
6. Lester, H. (2006), 'Creating a unique multi-channel customer experience ', London, Fifty Lessons Ltd [online], http://openuniversity.fiftylessons.com.libezproxy.open.ac.uk/viewlesson.asp?1=534 (accessed July 2009/2011)
9. Viney, H., Winchester, N. and Boojihawon (2010). B301, Block 3 The Strategy Toolkit: The Open University.
10. Leschly, S., Roberts, M.J. and Sahlman, W.A. (2003) 'Amazon.com - 2002 ', Harvard Business Review.
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