Future Group & Amazon: A Business Alliance Gone Wrong - Essay Sample

Introduction

The founder and chief executive officer of Future Group, Kishore Biyani, together with Amazon's Founder and Chief Executive Officer, Jeff Bezos, formed a business Alliance between their two companies in 2014. Amazon opted to sell the clothing brands for Future Groups coupled with retailing the latter's categories of goods. The Alliance, albeit started on an optimistic note, by 2016, some conflicts arose between the partners over discounts on the disputes on whoever would bear the costs. Were the partners able to solve the conflicts? The research would, therefore, underscore the partners' abilities to resolve their disputes coupled with the realms of the alliance delivery of values to the two companies, independently and interdependently

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By then, India had seen an emergence of its retail industry as the largest sector of its economy, which registered a Compound Annual Growth Rate (CAGR) of 7.45% by 2000. By 2014, India had seen an exceeding growth in its general gross domestic product. The retail industry in India, therefore, attracted many investors, albeit the Indians had stringent rules that restricted the investors from different regions from selling to Indian consumers nor investing in Indian retail businesses. Amazon did not follow the right strategy nor had the appropriate mode of entry in India. However, it made a soft launch in 2002 in the quest of dusting out a property it earlier bought in the U.S., Junglee, which it launched in Indian to compare the website prices. The website users were to compare the prices of items, both online and offline. Amazon, therefore, used the Junglee in testing the waters and testing the Indians' online habits as it waited on regulations. In so doing, Amazon, therefore, made the right decision in entering India in 2003 since it already had Indian employees who were handling their businesses. In spite of India's strict regulations that were hindrances to Amazon, they were able to maneuver their way in by changing the business model and establishing a single market place between the sellers and buyers through their Junglee website.

Amazon and Future Group made the right decision concerning selecting each other as Alliance partners owing to the market outlook of their complementary strategies and the need for diversification and the need for an opportunity for growth in the retail markets of India. Future Group provided for India synergies in foreign direct investment policy in the distribution of both companies, coupled with the opportunity for Amazon to enter the fashion market and to popularize in the e-commerce industry. Amazon, on the other hand, provided an opportunity for future groups to leverage its technological innovations and investments through safe payments and fast deliveries in the use of the products of Future Group.

Partners in Alliance should be aware of the various risks involved like Amazon and Future Groups, which underscored fewer profits owing to the alignment in prices between sales in high discounting and the physical stores. Additionally, besides the mighty and strong competitors that they faced, they had the challenges of mistrusts between each other, and the e-commerce industries still face criticism from Biyani. Similarly, they had the problems of the alliance negotiations that proved ineffective following the future corporation terms and conditions that were poorly negotiated. Similarly, there has been limited offerings by Amazon following the lockdown of Amazon with Future Group brand that prevents them from selling their products coupled with slow integration of brands of Future group. Finally, government legislation also provided a hindrance to the alliance by limiting online platform sales, thus reducing the price limit margins to safeguard the risks and consequently forcing other brands to use their services. Partners in Alliance should, therefore, renew and renegotiate all old contacts for protection against such threats in the future.

For the Amazon-Future Group partnership, I would recommend a demonstration of proficient partner expertise of customer portfolio to achieve their target of 60 billion within three months. I would also recommend Amazon's need for market penetration on their advanced knowledge, coupled with their online market penetration as an indirect way of marketing their stores that are offline with offline situations. Similarly, I would recommend for an exclusive online exclusive from competition between online and offline sales. Moreover, I would also recommend for the avoidance of competition between the partners on the realms of both online and offline selling since Future Group depends on Amazon on profit negotiations on market sales and exclusive online collection. That would mean that unsold items offline should be transferred to Amazon's online stores for discounts and promotions. The implications of my recommendations would be to promote and discount all items in retail industries together with strengthening their collaboration through experience and time. That would also create a neutral and open marketplace.

Finally, the Amazon- Future Group deal as an exclusive online platform for brands on Amazon's markets in India, an arrangement built for customer service. The partnership was able to penetrate India through their effective strategies of Junglee in spite of India's strict regulation. The association has endured a vast majority of risks, among other ineffective negotiations, mistrusts among each other, competition among external factors, stringent government regulations, and fewer profits. The Alliance partners, therefore, need to penetrate their online market by demonstrating their proficiency coupled with avoidance of competition between each other since they are interdependent.