Question

How does the Company Amazon relates to the Miles and Snow strategy and also how does it relate to the Porter Generic strategy?

Answer 1

Miles and Snow strategy: It includes 4 strategic types –

• Prospectors – A company that uses a prospector strategy is highly innovative that constantly seeks newer opportunities for growth.
• Defenders – A firm that follows defender strategy emphasizes on protecting its current markets rather than seeking new ones. It focuses on maintaining stable growth.
• Analyzers – A business that follows analyser strategy maintains current markets and has a moderate emphasis on innovation as well.
• Reactors – The reactor company doesn’t have a clear set of response to face environmental change. It lacks consistency and performs sluggishly.

Amazon is a prospector type company which is innovative and growth oriented. It searches to enter new markets to sell a wide variety of products for more growth opportunities. These companies are also risk taking.

Porter’s generic strategies are Cost Leadership (no frills), Differentiation (providing unique products and services) and Focus (offering in a niche market). Amazon’s generic strategy for competitive advantage is cost leadership. It tries to minimize its operational costs. Amazon makes use of modern technologies for attaining high operational efficiency consequently leading to minimized costs. Moreover, the cost leadership generic competitive strategy enables Amazon to reduce its price level and these low prices attract customers.