Amazon Online business strategy and management

In the corporate world, it is evident that companies begin with a subtle and elegant strategy that brings an impact in the society. A corporation or an enterprise can have on inclusion and diversity that can extend beyond their manufacturing or headquarter facilities (Towse, 2013). Alongside other supply chain businesses and online retailers such as Safeway Stores Inc. and ConAgra Foods, Amazon displays an exemplary and unparalleled business in the field of international corporations as the best business websites. Amazon’s supply chain process is one of the world’s best supply chains and online shopping platform. Amazon under the management of able CEOs since its inclusion has observed and maintained a high standard of supply chain management to achieve the incontrovertible business standard in international trade.  

Q1. How well are the 5-forces identified and evaluated?

Porter’s five forces are significant tools for survival and maintenance of competitive advantage of any company. Amazon remains the best and leading online company due to the integration of the terms of this model. Although the company faces a lot of competitions and technicalities, for the company to keep thriving it is its mandate to remain resilient in the e-commerce (Towse, 2013). The strongest forces in this model include competition or competitive rivalry, substitution or threats of substitutes and customers or bargaining power of suppliers. The week factors include bargaining power of suppliers and threats of new entrants.  

Bargaining power of clients

Ray (2010) posits that over the years, the reputable chain supply company has been investing heavily in delivery time and reducing the delay of the products to win the customer's loyalty. On the same note, the management has strived to make the delivery faster by introducing drones and Dash that enabled users to place of primary household goods by just placing an order online. Furthermore, the tools are also effective other duties since they provide real-time data for more accurate information about when goods’ demand falls and rise. The simple but effective Amazon’s supply chain process has perpetuated the great growth. The process begins with a customer placing an order that ignites a red light in the store that shows the workers the product on demand and thereafter placing a barcode for dispatch.

 Subsequently, the product placed on a conveyor belt, which is then channeled to a contribution Centre. The Amazon has endeavored to provide the customers with high quality information to fully exhaust and satisfy the client’s needs. Therefore, in Amazon’s fight to remain the best online retain it must take care of low switching cost and availability of substitutes such as Walmart’s stores to keep their customers as bargaining power of buyers is a major determinant (Ray, 2010).   

Competitive rivalry

Online retail companies are always more aggressive, hence very competitive. For instance, Amazon’s greatest competitors are the Walmart, eBay, jet and craigslist, which essentially owns an expanding online business website. Hence, through strong governance, Amazon has employed a strategy to remain resilient in e-commerce by taking care of risks of low switching costs and possible substitutes.

The great company strength is seen in how it conducts its sales. The huge large party sellers, low-cost structure, and the largest merchandise selection are the fundamental pillars of the corporation’s strength (Hitt et al., 2017). Moreover, as the world’s leading retailer, it derives its strength from the three strategies and that differentiation, leadership, and focus. As a result, of these approaches, the company has reaped gains and helping the shareholders drive significant values from the enterprise. The strength of the business also lies on the competitive advantage they gain from leveraging information technology and the use of the same in e-commerce as well as the superior logistical and distribution systems thy have actualized over the years.

Bargaining power of Amazon suppliers

The sellers or the suppliers detect the availability of materials of supplies to the company. Because of a small population of the vendor, moderate size of suppliers as well as moderate forward integration the company faces the moderate intensity of suppliers bargaining power. The smaller number vendors is a problem to the enterprise due to monopoly hence, should initiate moderate forward integration to be equivalent to a fair degree of control the suppliers beholds in selling their products to the enterprise.

Threat of New Entrants  

A new entry of firms into the e-commerce reduces the amazon’s market share potentially. Therefore, for the company to remain towering high and overcome the threats of a new entrant, it must consider the setback or breeding grounds of failures. They should put into consideration the aspect of the high cost of brand development, low switching costs, as well as high economies of scale. Some factors such as the high eonomis of scale and low switching costs weaken the influence the new companies in the business of e-commerce.

Threats of substitutes

Substitute companies affect the industry environment of an existing company. In the case of Amazon, the industry external factor such as low switching costs, low cost of substitution and high availability of substitute magnify the intensity of the threat. The factors mentioned above facilitate the transfer of customers from the reputable company to its competitors. For instance, customers may decide to from another retailer such as eBay, jet, and craigslist other than buying from the Amazon.

Q2. How well are the firm’s resources and capabilities analyzed as sources of competitive advantage?                 

According to Wisner, Tan & Leong, (2016), for every success in or failure in a corporation, the management is always held accountable and responsible. The supply chain management of this high esteemed company has worked through thick and thin to bring the online shopping platform to where it is now. In the process, some business strategies, resources, and logistics have been put in place to realize this success.

Moreover, the Amazon great success in the global market has been perpetuating and made possible by the resources and capabilities the company beholds, despite the international trade challenges and internal business environment. Some of the weaknesses include the high debts accumulated since the company is still struggling to make the business profitable in developing nations (Towse, 2013). As a result, they face yet another problem of tax avoidance branding the company negative publicity. In the recent past, they have suffered products flops, the amazon’s Fire phone launched in the US was a big flop hence a significant loss to the company. Thus, because of unmatched capabilities and resources that the strong leadership has put in place the company has emerged victorious despite the challenges.

The excellent management of the components of the internal analysis has perpetuated the company success. Right from the company’s critical success factors capabilities and resources, SWOT analysis, distributive competencies, ROIC and competitive advantage model.

On the companies, key factors Amazon has employed excellent customer relation strategies such as broad selection of products. The online company sells a variety of products of different sizes and different brands; it gives a variety of books, unlike the other traditional e-commerce who only stocked up inventories (Ireland et al., 2012). In addition, another outstanding advantage of Amazon is their ability to sell the product at low process regardless of the quality this makes them win the loyalty of many customers hence increasing their profit margin. The company’s robust process of services or products delivery as a sign of efficiency of distribution is also the company’s stronghold. The superior supply chain, as well as the first mover advantage, makes the company maintain a high number of customers.

In addition, Amazon displays high distinctive competency in the field of e-commerce by displaying wonderful internal resources such as the earth’s biggest selection platform. It has a good will and fame due to the large, loyal client’s base and first move, coming first in the market as the online business in North America. Moreover, Amazon is capable of shipping the ordered product faster to their destination, as well as offering excellent customer service thus this put them in front of their compactors eBay, jet, and craigslist. The company’s capability of being innovative and making accelerated expansion in both geographic positions and services is a factor for its success (Ray, 2010). 

Over the years Amazon has endeavored to maintain good company reputation, good customer experience, safeguarding the Amazon empire, extended growth potential as a way of showing distinct competencies. As a result, the company has been able to widen its profit margin and maintain the loyalty of their customers.

More significantly, the Amazon as an online business has worked tirelessly to abide by terms of the competitive advantage model. The companies its years of operation has maintained efficiency, quality, good customer relationship, and responsiveness. In the day-to-day operation in their supply chain strategies and marketing, Amazon has displayed superior customer responsiveness as well superior quality in service delivery hence the success of the company.

The buying power of customer at times is influenced by the emotions the clients feel from the service provider or the seller. Amazon as a corporation has leveraged on this potential marketing strategy by displaying high values future in the value creation model. In its marketing mix, the company has endeavored to show high reputational values such as trust, simplicity, and responsiveness to their target groups (Ireland et al., 2012). Furthermore, they have been the forefront in organizing high values sales and promotions amounting to the good customer experience.  With all incredible strategy in the components of the internal Amazon has been able to maintain their empire as one of the reputable online selling companies in the entire globe.            

Conclusion

In conclusion, analysis of Amazon’s supply chain store is an excellent examination and a case study of the other company dealing in the field. The milestone Amazon has shown in the area of online shopping and supply chain is incontrovertible hence it stand out to be the world best platform in supply chain diversity. Despite the weaknesses and challenges, the company has been a solid competitive advantage in the corporate world due to the immense online business strategy and well management of the components of the internal analysis.         

 

 

 

 

 

Reference list

Hitt, M. A., Hoskisson, R. E., & Ireland, R. D. (2017). Strategic Management: Competitiveness & Globalization.

Ireland, R. D., Hoskisson, R. E., & Hitt, M. A. (2012). Understanding business strategy: Concepts plus. Mason, OH: South-Western Cengage Learning.

Ray, R. (2010). Supply chain management for retailing. New Delhi: Tata McGraw-Hill Education.

Wisner, J. D., Tan, K.-C., & Leong, G. K. (2016). Principles of supply chain management: A balanced approach. Boston, MA: Cengage Learning.    

Towse, R. (2013). Handbook on the digital creative economy. Cheltenham, UK: Edward Elgar.