Question

What are the differences between Amazon’s business-level strategies and corporate level strategies from global convergence and international diversity perspectives. What are the key opportunities relating to amazon’s demand for localization and demand for globalization.

Answer 1

Global convergence:

It is necessarily the homogenization of culture, policy and economy across the world. Might sound simple, but it's a daunting task. For a brand like Amazon, this is much more of a logistical task at hand. A business level strategy contributing to global convergence in Amazon could be offering products which are culturally inclined to a demographic and promoting these products through social media marketing. For example, a Dhoti which is a part of the Indian culture could be promoted in an online sale instead of denims. This results in offering the best products for the customers in short. In a business level strategy identifying the core of the market and customer is of utmost importance, and the customer are the foundation for Amazon. Another instance of this strategy practiced by Amazon is offering a wide range of products which doesn't blow the wallet. This mainly depends on the economy in which Amazon operates. An offer in a table lamp may might translate to different price slashes in different nations, despite adjusting the exchange rates. So, Amazon needs to keep all these facts at their disposal.

In case of a corporate level strategy, we mainly refer to those strategies which affect the businesses as a whole and aims to increase the competitive advantage in their areas of dominance. Amazon's growth in newer markets by leveraging aspects of business level strategies discussed in the previous section. The top level management of Amazon decide on how to go about the market and the opportunities in the near future for them. For instance, the homogenization in this case might take place by gradually getting the customers accustomed to western practices and their trends, if Amazon are looking at growth aspects with global convergence in tact.

The previous section also throws light on international diversity. How? Take an instance where Amazon wants to increase their market power in an Asian country. Apart from offering localized products and collaborating with local sellers, they also put up western brands, maybe at a higher sale price even. All these compile up to the overall business and corporate level strategies for Amazon leveraging international diversity

Opportunities in localization:

• Chance to collaborate with local sellers/vendors thereby increasing the trust with existing market players
• A great way to increase consumer base in a new market.
• Cultural barriers are reduced. Customers tend to connect more if details are in their native language
• Costs associated with the delivery,etc falls sharply due to domestic shipping.

Opportunities in Globalization:

• The scope of Amazon increases. Intially they were operating in the US, but now after globalization they are literally a household name in many of the developing economies. Furthermore expansion can occur through globalization
• The countries itself face a developmental change through globalization. Ecommerce being one of the thriving industries at the present, they play a vital role in globalization. This also being the reason for governments to encourage investments from these companies
• Apart from this, a sustainable and stable economy is an outcome due to globalization. Jobs, wage raises, etc contribute to the same.

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