Question

Example of a Strategic Planning of a well-known company. Should consist of the strategic planning key elements: Mission Statement, Corporate Scope, Statement of Corporate Objectives, Corporate Strategies, Operating Plan, & Financial Plan. Explain each.

Answer 1

AMAZON MISSON STATEMENT

mission is to continually raise the bar of the customer experience by using the internet and technology to help consumers find, discover and buy anything, and empower businesses and content creators to maximise their success. We aim to be Earth's most customer centric company.

Amazon.com’s mission statement satisfies many of the conventional characteristics of ideal mission statements. For example, the company includes target customers and market, variety of products, and basic business aims (pricing and convenience) in the corporate mission. However, the company does not include technology and the nature of the business and its operations. In this regard, it is recommended that Amazon add details in its corporate mission to give employees and investors a better idea of what the company is all about. This recommendation should make the corporate mission statement more comprehensive, especially in representing the company’s businesses, such as e-commerce, cloud-based computing services, digital content delivery, software and hardware, and brick-and-mortar retail (Amazon Books).

CORPORATE SCOPE

Scope of the business and current products of services provided Amazon has an extremely vast scope of business because It began as an online bookstore, became an online marketplace, and then began creating its own technology such as AWS and the Kindle.

STATEMENT OF CORPORATE OBJECTIVES

Amazon’s CORPORATE statement is “We strive to offer our customers the lowest possible prices, the best available selection, and the utmost convenience.” This corporate mission promises attractive e-commerce services to satisfy target customers’ needs. The company focuses on the variables of price, selection, and convenience. In this regard, the following characteristics are identifiable in Amazon’s corporate statement:

1. Lowest prices
2. Best selection
3. Utmost convenience

AMAZON CORPORATE STARTEGY

Amazon’s generic corporate strategy can be described as concentric diversification. This strategy is based on leveraging technological capabilities for business success and following a cost leadership strategy aimed at offering the maximum value for its customers at the lowest price in addition to wrapping its business around the customers wherein they find Amazon to be the go-to portal for their online shopping needs.

Indeed, this strategy has paid off well as can be seen from the fact that it is the world’s largest online retailer and has consistently been the leader in the market segments in which it operates. Having said that, it must also be noted that cost leadership can follow the law of diminishing returns wherein firms following this strategy find that they are unable to sustain growth or increase profitability once the “low-hanging fruit” are plucked.

OPERATING PLAN

Amazon has the choice to translate their lower cost structure into higher profits and give some of the profits back to the shareholders via dividends. But Amazon passes it onto customers via sustained low prices and reinvests the rest of their surpluses into growth. A fair chunk of these growth investments go into their fulfilment and delivery network as shown last time. This, in turn, helps to further lower their unit costs which amplifies the subsequent elements of the virtuous cycle. And so it goes round and around.

FINANCIAL PLAN

Amazon divides its business into three segments: North America, International, and AWS. The first two of these segments, North America and International, refer to geographical breakdowns of Amazon's retail business. They generate revenue from retail sales in North America and the rest of the world, as well as from subscriptions and export sales for those areas.4 Retail can further be broken down into online stores, comprising the bulk of sales, and physical stores. Company-wide, online stores accounted for $45.9 billion in sales in Q2 2020, or about 52% of net sales, while physical stores generated $3.8 billion in sales, or about 4% of net sales.