Amazon’s Business Strategy

Introduction

The Amazon Company was started in the year 1994 with its distinguished line of books as the major business product. This was engineered by a business scholar come entrepreneur known as Jeff Bezos. The main objective of this company was to become the global centre for business excellence, and as time matured it was evident that the time for this bright idea had knocked on the doors of the world. Amazon provided its customers with a prospect of entrance to an all-embracing variety of books without incurring additional costs associated with point and constructing substantial stockpile and warehouse, to procure and accommodate stock. (Bezos, 1994)

The current business position of Amazon Company

Through its procedures and experimentations, Amazon Company has confirmed and recognized a replica for upcoming online merchants to pursue and conduct experiment with them. Though this is the situation more effort needs to be put in. We understand from the Amazon’s mission statement that it was to be the superior place for clients to discover almost everything they required. The management of Amazon must be attentive of the hastily altering electronic commerce. For example at present it cannot be able to suit all its client’s demand. This is because the amount of products on trade is insufficient. Therefore they need to put more effort in ensuring that they retain all their customers if they have to survive in the electronic market. (Christidis, 2001).

Also their manufacture process and circulation is not overwhelmingly enhanced. In order to achieve this they need to begin using the net. This will ensure that there are numerous transactions in the future. It is therefore not true to say that Amazon is deviating from being a business leader. The company is doing enough to ensure that it maintains its competitive strategy. (Jarvis, 2006)

Amazon’s competitive Strategy

To be the best in a competitive environment, one needs to be unique. Amazon has made this probable by distinguishing itself through the following ways. (Sharma, 2006)

  • Cost leadership
  • Customer differentiation
  • Focus strategies

Cost-leadership

This is where this company has primarily differentiated itself on the basis of price. It always offers the quality products as other companies for a sign with a reduction of price. Many companies have always tried this strategy and failed many times. In business it’s about being unique in service and price while studying the movement of your competitors. In an environment where competition has become so stiff many firms will rarely survive and it’s important that employees become innovative to maintain the competitive strategy. During this time Jeff Bezos ensured that not even a single company in the same industry could be a threat. (Bezos, 1994)

Customer differentiation

This refers to the process whereby a firm differentiates its products from that of the competitors through presentation, design, quality, branding, and convenience. Most manufacturing firms use product differentiation a means of identifying their products. Amazon Company ensured that its goods may possibly be easily notable and accepted from those of their competitors by its clients. (Christidis, 2001).

In an environment where competition becomes cut-throat, companies will always use product differentiation as way of locking in their customers. This strategy will also ensure that competitors are barred. Amazon prides of customers service and aspires to be one of the most customer centric companies. It has achieved this through client assessment proposal. This is further demonstrated through abridged prices, broad assortment of book titles, and spectacularly enhanced procurement expediency. It also focuses on supplementary essentials of what clients desire, such as attentiveness to value, consistency, safety and accessibility of goods. (Jarvis, 2006)

Focus strategy

This refers to a process where a firm enters a market niche either by differentiating a product or through cost leadership. Whichever method proves to be successful becomes the strategy. This strategy is effective where a firm believes that its absence is so dominant and it suspects that either the competitor has not exhaustively covered the area. It is also recommended when a firm wants to launch a new product. Amazon to advantage of its on hand exceptional client examination to monopolize many of its business niches. (Christidis, 2001).

E.commerce: Electronic commerce revolutionized business dealings and the manner in which core activities were conducted in Amazon through so many ways including payment as follows. (Sharma, 2006)

No physical cash: There was no physical of exchange of cash in other words it was a cashless society. This eliminated the bulk of carrying large sums of hard cash to make a payment for goods ordered for.. (Jarvis, 2006)

Intermediaries: The presence of electronic transactions ensured that there were less intermediaries in between the company and its customers thereby leading to reduced costs of operation. (Jarvis, 2006)

Increased marketing: Customers could get access to the Amazon’s website, access variety of books they wanted and place orders online. The company could also identify their client’s needs through getting access to their client’s database. This increased personalized marketing. (POTOMAC KNOWLEDGEWAY, 1995)

A 24-hour business: Electronic commerce ensured that there was no limit to the time of business operations. The business was done throughout the day. This increased more margins to the company. (Bezos, 1994)

Security issues: Since most of the transactions are executed through the website, there are higher chances of fraud. What fraud star needs to have are perhaps the valid debit card numbers and expiry date? This poses a lot of risks especially to the world’s business environment. (Bezos, 1994)

Data management

Data is mainly managed by professionals who are highly trained. Jeff Bezos had a policy of recruiting the best, most intellectual and multitalented citizens who could contribute to his dream and were enthusiastic to work and attain it.

This has enabled customers to get access to the relevant information that they need. (POTOMAC KNOWLEDGEWAY, 1995)

Conclusion

Amazon Company should be able to devise new strategies on stock management in order to satisfy its customers by serving them with right quantity of products they need anytime. It is also important that the company increase its product distribution through the net as online system will remain to be just a method of acquiring information. When these are considered Amazon will be able to maintain its competitive strategy and ever be ahead of its rivals. (Christidis, 2001).

Reference

Bezos, J. (1994) How Amazon..com survived, thrived and turned a profit. Web.

Jarvis, G. (2006) Adapt to changing customer needs to win sales. Web.

Sharma, A. (2006) The single most important book on business strategy. Web.

POTOMAC KNOWLEDGEWAY, (1995) ELECTRONIC COMMERCE. Web.

Christidis,P.(2001) On- line Shopping and Transport Demand. Web.

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