A Critical Evaluation of Amazon’s Strategy, Strategic Choices, Structure, Systems and Culture

Topics: Strategic management, Amazon.com, Business model Pages: 31 (7550 words) Published: July 14, 2011
UNISA GRADUATE SCHOOL OF BUSINESS LEADERSHIP

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Code for paper/module/courseMBA 721 & 722

Year02

Assignment number 01

Student numberGroup 1

Word count NA

Tutor:Andre Vermaak
|Online Residential School |

Amazon.com

A critical evaluation of Amazon’s strategy, strategic choices, structure, systems and culture

Authored by: L. Gounden, C. Hendrikz, R. Ligault, M. Louw, P. Mathopa, A. Omer, S. Patamadai & V. Pillay

Date: September 22, 2008

TABLE OF CONTENTS

1Introduction5

2Q1. STRATEGY5

2.1THE EXTERNAL ENVIRONMENT6
2.1.1MACRO ENVIRONMENT6
2.1.2Industry environment9
2.1.3Competitive dynamics10
2.2The Internal Environment11
2.2.1CAPABILITIES AND RESOURCE ANALYSIS11
2.2.1.1Capabilities Audit13
2.2.1.2Appraisal of Resources and Capabilities14
2.3Section summary15

3Q2. STRATEGIC CHOICES16

3.1MARKET OPPORTUNITIES16
3.2STAKEHOLDERS19
3.3CAPABILITIES & RESOURCES19
3.3.1ORGANIZATIONAL CAPABILITIES20
3.3.2Resources21
3.3.2.1Tangible21
3.3.2.2Intangible21
3.3.2.3Human21
3.4Innovation22
3.4.1MARKETING22
3.4.2Technology22
3.5Section summary23

4Q3. STRUCTURE, CULTURE, SYSTEMS AND ABILITY TO DELIVER THE STRATEGY24

4.1ORGANIZATIONAL STRUCTURE24
4.2CULTURE25
4.3SYSTEMS26
4.4ABILITY TO DELIVER STRATEGY26
4.5SECTION SUMMARY27

5CONCLUSION27

6BIBLIOGRAPHY27

LIST OF FIGURES AND TABLES

Figure 1 - Macro Environment factors6
TABLE 1 - MACRO-ENVIRONMENT FACTORS FOR AMAZON8
FIGURE 2 - PORTER'S 5 FORCES MODEL (PORTER, 1985)9
FIGURE 3 - PORTER'S COMPETITIVE ADVANTAGE MODEL (PORTER, 1985)10 FIGURE 4 - A FRAMEWORK FOR ANALYSING CAPABILITIES & RESOURCES (GRANT, 2008:157)12 TABLE 2 - RESOURCE AUDIT FOR AMAZON.COM13
FIGURE 5 - AMAZON'S VALUE CHAIN (ADAPTED FROM PORTER, 1985)13 FIGURE 6 - APPRAISING THE STRATEGIC IMPORTANCE OF RESOURCES & CAPABILITIES (GRANT, 2008:139)14 FIGURE 7 - AMAZON'S COMPETITIVE ADVANTAGE & SOURCES OF CHANGE17 FIGURE 8 - RBV & CAPABILITIES FOR AMAZON (ADAPTED FROM GRANT, 2008)20

Introduction

Traditionally the relationship between strategy formulation and implementation has often been hierarchical and structured around industry dynamics. The evolution of the Internet and e-commerce has dissolved a number of boundaries that apply to the physical world – national borders, time zones, business hours and importantly, time to respond. The principles of securing and maintaining competitive advantage depend even more on technology than did an earlier generation of businesses. The pervasive nature of technology has affected a number of areas – who the customers are, the information to which they now have access, what value is delivered to them and how, the value chain, nature of industry relationships and more.

Amazon was one of a number of technology-based businesses which took advantage of their inherent source of competitive advantage – knowledge of technology and a sense of how to possibly generate revenue streams. At the same time, this was a new industry of its own in the making and a lot of experimentation was undertaken as businesses made their way forward. Amazon’s business model and its constant refinement brought about a new view of relationships among organizations, strategy, and superior performance.

The following sections evaluate Amazon from the viewpoint of these elements, their relationships, what could possibly have been done differently and why. The principal thinking for conducting the evaluation has been Rumelt’s (1991) four tests; however, the specific models and frameworks used to conduct the tests are...
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