Strategic Management Paper Example: Case Study Analysis on Amazon

Paper Type:  Case study
Pages:  5
Wordcount:  1132 Words
Date:  2022-10-23

Amazon is one of the competent participants in e-commerce. It has managed to capture market strength through monitoring and adhering to consumer taste and preferences. It is known as the world largest online retailer as well as the online retailing pioneer. Majorly, it initiated as an online bookstore. Later, it diversified into all other tradable goods online. Further, it has proven to be an international e-commerce trader now by offering various combinations of local products, worldwide delivery as well as a logistics platform.

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Amazon has leveraged technology to a certain degree. It is thus using it as its competitive advantage over other e-commerce traders. Additionally, it has enhanced the economies of scale in its operations thus minimizing the costs of operation as it leverages the synergies across the internal and external drivers aiming at copying its trading strategies.

Besides technology being a critical competency in Amazon, the principle of strategic alternatives presented must adhere to the policy of them being supplementary and complementary in its core competencies. Amazon's key competency matrix table depicting competitive scope against competitive advantage can be demonstrated as shown below:

In the e-commerce trade, for instance, once Amazon tries to have unrelated diversification, this implies that it either merges or integrates with a different firm or includes a new product in its trade. To an extent, combining with other unrelated or uncompetitive firms is a form of diversification but does not bring about competitive advantage to Amazon. The aspect has been attributed to a specific reason. It is merely because it creates no impact on demand or the supply contrasted to its close competitors. Similarly, it brings no new effort to the market system which could trigger more market strength. VRIO depicts certain elements that include value, rareness, imitability, and organization. As such, VRIO analysis refers to a technique which is analytical as well as brilliant for evaluating the firm's resources hence identifying its competitive advantage over its competitors.

It is evident that VRIO will enhance a temporary competitive advantage for a firm since most of the consumers prefer organizations with more valuable goods. In this way, it will also be possible for it to be copied or closely competed by close competitors. In the case of diversification, the firm will enjoy the benefits of competitive advantage due to the supply of complementary goods and services. When a firm integrates with relative firms, it minimizes the competitive advantage since supplementary commodities decline due to similar firms offering similar services under one roof hence no competition.

On the other hand, BCG analysis refers to Boston Consulting Group. It assists in grouping a portfolio of products and services on sale in a model referred to as BCG matrix. The model is useful in making long-term plans, comparing trade opportunities and deciding where to invest in or what to venture with as well. Moreover, BCG system helps in to examine and differentiate product portfolios which are profitable and the less valuable. It further comprises four quadrants identified with a Cash cow, Stars, Question marks, and Dogs.

Cash cows refer to portfolio bringing in more revenue while Star represents a portfolio with high market share. Besides, Question marks depict a portfolio with limited market share but have the potential to grow while Dogs epitomize the portfolio with least sales and no identifiable market share.

Amazon like other firms has cloud computing services. Amazon Web Services (AWS) is a secure cloud service platform, which offers various services such as the storage of database and content delivery among others. All these functions facilitate the growth of the company. It explores the degree to which consumers leverage Amazon Web Services cloud products and solutions to develop with sophisticated applications. All these have assisted in enhancing flexibility, the scale, and reliability.

Seemingly, AWS has enhanced growth in market strength as a result of an increase of competitive advantage through cloud computing. Therefore, it would be depicted that AWS are interrelated to Amazon's core business since it helps in marketing of its products, gaining market strength as well as competitive advantage over close competitors hence maintaining the top trader in the e-commerce. Additionally, it will enhance increasing of more value since its sales are diversified across a large consumer level. New consumers, in this case, will then prefer Amazon due to the elements of its value, market outreach and strength as well.

However, it has been demonstrated that some investors are requesting Jeff Bezos to eliminate AWS as an indented entity. It would not be an ideal recommendation for that to be done due to its relevance in creating Amazons good reputation on the e-commerce, gaining of market value as well as competitive advantage over its close competitors. Consequently, once Jeff Bezos follows the investors' request, the policy shall make Amazon lose market value at first and later face the competitive market which will force it to drop down the price hence a decline in expected profits level. Unfortunately, gaining market strength as a new firm in the market shall take AWS more time compared to when it would have initially offered services to Amazon.

In comparison, Amazon has been more competitive than Alibaba and Walmart. To maintain its competitive nature against its close competitors, Amazon can support its website services. Cloud computing services have upstaged, up scaled and made Amazon gain more market power through an increase in the volume of sales which came as a result of consumer diversity. Advantageously, Amazon has more value in the market sectors once an analysis is done among various consumers. Relatively, once Amazon plans to invest more in advertising its products as well as marketing itself, it will sail more into the market compared to Alibaba and Walmart. Analytically, most of the consumers like Amazon branded their products. Consequently, when Amazon chose to play the strategy of offering a lowly priced product or giving an incentive of about 0.05 % as a discount in every price of a product, it would sell at a rate slightly below the market price. The price would be low such that all other firms will end up adopting Amazon's strategy especially because it has the most significant market power. As such, this makes Amazon remain the market leader both in strategy choice and market strength.

Conclusion

In the end, an ideal recommendation would be for Amazon to maintain its strategies in the market unless its close competitors are deciding to change the policy of operation. Change in its approach without competitors being altered will trigger market interruption. Otherwise, Amazon is still the price leader as well as the leader in value and market power. However, in the long run, Amazon should change strategies to avoid being copied by its close competitors. In this way, its approaches will be unique as compared to other competing organizations.

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Strategic Management Paper Example: Case Study Analysis on Amazon. (2022, Oct 23). Retrieved from https://proessays.net/essays/strategic-management-paper-example-case-study-analysis-on-amazon

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