Marketing Report

Published: 2019-02-06 17:32:33
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Amazon.com as a global company specializing in internet retail shopping services

 

Amazon.com, Inc. is a global company specializing in internet retail shopping services. It was started in July 1994 by Jeffrey P. Bezos with its headquarters in Seattle, Washington. Currently, it is the largest internet based retailer globally regarding market capitalization and sales. In its initial operation, it offered online bookstore and later diversified in selling jewelry and toys, furniture, food, apparel, video games, electronics, audiobook, mp3 and video streaming and downloads, software, Blu-rays, DVDs and CDs Amazon has worked on various marketing strategies that have made it unique from competitors (Amazon.com, 2017). Lately, it is producing consumer electronics and provides cloud infrastructure services. It has positioned itself as a low-cost retailer that offers various range of products and services making it a unique internet retail business (Reuters, 2017). Its able management team has maintained a healthy competition preserving its competitive advantages.

Amazon operates separate retail websites for the United Kingdom and Ireland, Mexico, India, China, Japan, Australia, Netherlands, Spain, Italy, Germany, Canada, France and the United States where its headquarters are based. It also offers international shipping to various countries for certain products. Throughout the years, Amazon has made numerous mergers and acquisitions to expand its services together with merchant partnership agreements. The company operates the domain amazon.com website which has registered a high number of visitors (Amazon.com, 2017). For instance, from 2016, Amazon attracts over 130 million customers on its US website per month. To maintain its competitive edge and its presence in the United States, Amazon should incorporate book publishing and movie production services (Reuters, 2017). According to the company strategic goals and internal and external environment, the new service can improve its competition by creating and maintaining its advantages in a marketplace. This strategy is aimed at This article discusses Amazon's strategic management with a focus on the company's competitive advantage and its customers.

Amazon Movie and Digital Books Production in the United States

Through its global strategy as the one that was put in place between 2009 and 2013, the company can effectively utilize its resources and strategic capabilities to produce movies and publish books (Amazon.com, 2017). The strategy would lead global dominance in movie and book offers by developing and using technology, acquisitions, and alliances as it increases the range of products and services which they produce at relatively low cost. The strategy would also entail expanding its customer experience. Effectiveness in operations alone cannot achieve a sustainable competitive advantage. By producing its movies and publishing its books, Amazon operational effectiveness would be improved and will be able to carry out similar activities better than its competitors who are increasing daily. Through its able processes such as benchmarking, outsourcing, convenience, and reengineering, the company can be a major competing giant. A sustainable competitive advantage can only be achieved by performing similar activities but in a unique style (Jackson, Joshi & Erhardt, 2003, 832). This is the strategy to be used as the company will issue its own digital books and movies where the competitors would not be able to achieve. Amazon will be able to stand as a distinctive group that is hard to imitate and with internally consistent operational systems. By producing its own movies and will reduce the number of second party products and be able to provide a variety of unique items which portray its brand in different categories ((Leigh & Pershing, 2006, 1097).

One of the greatest opportunity for Amazon's strategic management is growth. As a global company, Amazon should focus on being a customer-centered company that offers a broad range of products and services that are affordable and meets their needs. As its website has a feedback forum for customers, it can preview some of them to produce movies and publish books by observing customer needs. This will increase its sales, improve customer experience, enhance the number of clients and sellers who use the company's websites. As its CEO and chairman Bezos highlighted, the company enjoys its brand name which steadily serves customers by enhancing their experience (Thompson & Strickland, 2003, 564).

When it established its global strategy, Amazon identified three pillars. First was affordable pricing the second was wide selection pool and the third was product and service convenience (Reuters, 2017). By establishing its movie production line and digital book publishing, the company will be able to offer these products at a relatively low price without compromising the quality. This will be possible as it will not encounter the high fee of accessing these books and movies set by production companies. Amazon is known to provides a broad range of retail products and services. By producing its own films and publishing its own digital books, the company would increase their products as it can also access second party movies and books. With its own production, the customer selection would be improved (Leigh & Pershing, 2006, 1094). The third strategic pillar is customer satisfaction which increases their loyalty to the customers. Amazon will be able to implement its customer reviews and online feedback quickly without necessarily passing the information to the third party.

Business Level Strategy of the company 

The company should use Business Level Strategy (BLS) to identify its obligations and measures to secure a sustainable competitive advantage. This is by exploiting the core competencies in the online retail industry. Amazon can implement the integrated cost differentiation strategy on movies and digital books to gain a competitive advantage. It will realize efficiency and uniqueness with affordable product value. The company would engage in critical and supportive activities making it possible to pursue differentiation and low cost simultaneously.

Amazon threat comes from the stiff competition from eBay and Netflix. Such occurrence necessitates making sure that customers remain loyal to Amazon. This can be maintained by ensuring affordability and differentiated products. Most of the Amazon customers are sensitive to a price increase. Additionally, increasing the company reliability and uniqueness of its products would go a long way in improving their loyalty. By having its movies and digital book production, the company can lower its price and increase its uniqueness and reliability in case a product substitutes emerge in the market. Unique products at an affordable cost provide substantial barriers for potential entrants in the market. Differentiation spontaneously leads to the high-quality components (Crossan, Fry and Killing, 2004, 72). Cyber crime is another threat to the online retail business. Amazon should keep stringent measures that counteract cybercrime attacks against its online operations. This will improve its customer loyalty.

Amazons inception vision was to become the world biggest and the best online bookstore. However, this has changed, and its current goal is to be the world's best customer-centric retail business. It aims at producing a website where consumers can search, find or discover various products they want to buy online. This cannot be easily achieved with the company reliance on products from second parties. Consumer centric goal can only be achieved by making sure that there is assurance of customer services and products. After identifying customer needs, the company should figure out how to provide them. Innovation strategy is about identifying essential commodities within its retail business and producing them (Hitt, Ireland & Hoskisson, 2010, 324). Such plan would help Amazon serve its four distinct customer groups including enterprises, seller customers, consumer customers and developer customers.

Internal and external environment

When focusing on Amazon internal and external environment, one has to focus on its operations and resources. In addition, they include its weaknesses and strength compared to its competitors. Amazon has various internal resources which can be used to maximize its productivity which results in increased performance. By producing its own movies and digital books, it will improve its effectiveness and efficiency in providing these products. Amazon should continue expanding and utilizing its internal resources so as to produce high-quality products and services to its existing global market at an affordable cost. The competition and threats it faces or in entering new markets can be curbed by establishing extensive research and development programs such as movie and digital book production (Bernroider, 2002, 563). These products are some of which bring back a lot of income and the company was established in delivering books and movies. Aggressive product promotion and marketing strategy should not be kept abreast to define their new products. Through brand name, customer value will be created increasing the company performance. In a competitive market, efficiency and affordable cost are known to serve a barrier to potential entrants.

For corporates covering global economy, external environment significantly effects on its organizational strategy which then influences its performance. The environment is reliable for determining threats and opportunities in any entity. Some of the external environmental encountered include social, cultural issues, technological factors, and competitive rivalry. The economic and political factors would affect currency stability which may reduce Amazon's performance (Crossan, Fry & Killing, 2004, 76). The company's performance has been built on its efficiency in operations, growth in market share, product quality and the introduction of new products. By introducing movies and digital book under their brand, the company would have conquered many external issues.

Amazon's competitive advantage has been its extensive investment in technology. With already established technology, the company has the potential to exploit it to maximize its profits. Previously, the company has realized most of the company goals. Technology had improved efficiency and lowered the operational cost. By having its own products, the company can offer affordable prices to its customers. Amazon can also through acquisition start producing its own movies and books as it has done before with various entities. This will not only increase its capital base but also enhance the amount of products and services it offers. Acquisitions would also eliminate high competition.

An objective, goals, mission and vision of the company

When establishing a strategy for success in a given market, the company needs clearly define its objective, goals, mission and vision. Establishing a new product would necessitate Amazon to identify ways of implementing its wishes to become realistic solutions especially in the growing and intense market competition. In the online retail market, anyone can offer products but one need to defining clear and accurate goals which would be pivotal for a healthy organization competition. As the technological dynamics keep on shifting, Amazon has to focus on long-term products and services through innovation and increased consumer experience. Production of digital books and movies is one of the sustainable business the company can enjoy with the growing competition.

Amazon.com has been buying books, movies, and DVDs and then sell them over the internet and benefit from the large market it enjoys. With this market, the company can enjoy even a bigger and sustainable business by producing books and films on their own. First, there is growing competition from companies such as Netflix and Hulu which are offering their product on digital video streaming service. Such competition means that in future more companies that rents movies and books to Amazon may start offering their services to their customers directly and fail to involve Amazon.com websites. Such occurrence would be mean that Amazon.com would run out of business.

Amazon.com production would be more compelling and competitive to the market because of various reasons. First is that before production and printing, customers can review and rate them through crowd-sourcing. If the content is appealing, the company can go ahead and produce them, and if they are not fitting customer needs, then they can be improved or discarded. Such occurrence would mean that the company would be the preferred site for digital video streaming service and downloading books. The company can change what they offer according to the prevailing market needs and requests.

Amazon.com enjoys various strengths and opportunities which when utilized innovatively can ensure a sustainable market. Through its excellent human resource, its capital muscle and its presence on the online platform, it can be able to acquire a competitive edge that other companies cannot meet. Evidently, it is expanding its market even to Africa which has shown great potential in subscribing for online products. Production of movies and books fits in their strength and opportunity in it is an established company dealing in these products as a third party. Additionally, setting such business would mean that it will use its human resource and capital maximally which is attributed to economies of scale (Bernroider, 2002).

Customer value, Market mixes

Most of the customers who purchases movies and books from the Amazon may not be meeting the value for their money in many cases. First, the content they get is produced by another person who may not have customer interest in mind. Customers may be compelled to buy these products as there is no other way to get what they need. Additionally, the customers may fail to get a product at all as all the available product do not cover their interest. For these reasons, the company loses revenue, as well as the customer, is not satisfied. However, with the production of its own, Amazon.com can be able to meet client needs which translate to customer value as one of its core mission. Customer value cannot be achieved without first understanding their needs.

The Amazon.com marketing mix for movies and books consists of four variables that can be controlled to create a mix that satisfies the needs of the target market. The first is the product which includes books and movies that would be availed to meet the customer needs, therefore, satisfying the target customer. Unlike before these products will be produced to meet customer needs. The second mix is the place which is already established on its website which enjoys the worldwide market. Customers will be able to access these products easily and readily. The third is promotions. Amazon will be using its websites to advertise and make the needed direct marketing. The last mix is the price which will be highly competitive as the company would be not a third party and can offer discounts at a higher margin (Thompson & Strickland, 2003).

Internal strategies influence the external factors which can be a significant issue in increasing its sales (Lancaster, Massingham & Ashford, 2002, 43). Amazon needs to systematically start its strategic behavior to respond to internal or external environment influence for various performance indicators. With the internal and external environments being globally significant, they would impact on the company's performance thereby necessitating the Amazon to frequently monitor and conduct environmental surveys. However, to launch its own products, the company has to watch performance indicators that would at the same time reduce the costs and increase differentiation.

Amazon.com Inc. has a potential to continue and expand its e-commerce dominance. However, it still experiencing some concerns. This can be seen in its limited presence in developing markets such as Africa. The company can increase its strategic entry into developing countries which can be a source of the main growth opportunities based on fast growing economies such as Kenya. Additionally, the issue of competition growing in retail firms with like Walmart, Amazon must consider having their own products to increase its reliance, loyalty and meet customer needs. The company is known as a global brand, and this means that its products would be comprehensive.

References

Amazon.com. (2017). Amazon.com: Online Shopping for Electronics, Apparel, Computers, Books, DVDs & more. [online] Available at: http://www.amazon.com [Accessed 23 Mar. 2017]

Bernroider, E. (2002). Factors in SWOT Analysis Applied to Micro, Small-to-Medium, and Large Software Enterprises: an Austrian Study.T European management journal,T 20(5), 562-573.

Crossan, M.M., Fry, J.N. and Killing, J.P., 2004. Strategic analysis and action. Pearson Prentice Hall.

Hitt, M. A., Ireland, R. D., & Hoskisson, R. E., 2010. Strategic Management: Competitiveness and Globalization, Concepts. Mason, OH: Cengage Learning.

Jackson, S. E., Joshi, A., & Erhardt, N. L. (2003). Recent research on team and organizational diversity: SWOT analysis and implications.T Journal of Management,T 29(6), 801-830.

Lancaster, G., Massingham, L., & Ashford, R. (2002). Essentials of marketing.

Leigh, D., & Pershing, A. J. (2006). SWOT analysis.T The Handbook of Human Performance Technology, 1089-1108.

Reuters. (2017). ${Instrument_CompanyName} ${Instrument_Ric} Company Profile | Reuters.com. [online] Available at: http://www.reuters.com/finance/stocks/companyProfile?symbol=AMZN.O [Accessed 23 Mar. 2017].

Thompson, A., & Strickland, A. (2003). Strategic Management (13th ed.). New York: McGraw-Hill.

sheldon

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