Question

Amazon's Development of Strategic Alternatives (Ecommerce)

A good starting point is the “status quo”. If the current strategy is left unmodified, what will happen to the company’s ebusiness performance. Try to be as specific as possible. Will there be deterioration of profits? Ability to service debt? Also try to measure the severity of deterioration. Clearly a small deterioration in the future may only require a minor modification of strategy now. Provide 2-3 strategic alternatives / recommendations that will resolve the issues cited in the report.

When presenting these ebusiness strategies, describe them fully by identifying any changes to the company’s goals, product/market focus, or basis of competition. Clearly, which components you change and by how much are a function of your earlier analysis of the status quo. Once each ebusiness strategy has been stated, you should analyze it. You can state pros/cons for each strategy by comparing it to the firm’s goals, the company’s strengths or weaknesses, or the environmental opportunities or threats. Again throughout your analysis, you are subtly building a case for the strategic direction you see as the best.

Answer 1

E-Business Strategy is that part of an organization's corporate strategy which is essential for a company's revenue-making over the internet. This entails both as a long-term or a short-term plan connected with various other departments like sales & marketing and IT strategic plans.

Over the period, it has been proved that constant innovation and a change in the strategic plan is quite a necessity for a company's growth. If an organization fails to implement something new or is not able to customize its strategies in accordance to the changing customer's preferences, then this is going to affect the profits and the level of service offered. Indeed, even a slight change in the current strategies would result in sustaining the present and developing a new customer base.

If one has to keep up the pace with the on-going competition, it is required that every company adopts some competitive strategies. Porter's generic competitive strategies are one of those effective methods which can assist a company is remaining competitive. The concept is been categorized into 3 major ideas. These are cost leadership, differentiation and cost focus and differentiation focus. Now, each of these subdivisions has its logic. The cost leadership is more of looking inside. The companies try to keep the cost of production low which paves a way for enhancing their growth with more investments left at their disposal. The idea of differentiation is to target a much broader market with your services still having unique features and high in demand. This will enable the company to attract more customers and makes it more exclusive. You can also implement the cost focus strategy which makes the products/services to be cheaply available and targets the niche market. Differentiation focus is also similar to the cost focus, but here you focus entirely on building quality and creating a brand for itself.

Organizations like Amazon has built its reputation over the year starting from the sleeping online bookseller to a massive e-business company in the current world. They also are planning on a few of their future strategies, with some major tools which attracts the new service providers entering the market. They also act as a fuel for small scale growing businesses and provides them with a launchpad and financing them adequately. They also have shown keen interest in other areas like logistics, robotics etc. Home deliveries and supply chain activities are also been focussed more as these make products available to the customers within a span of 48 hrs. This was only possible as Amazon has tied up with some leading 3rd party logistics providers, thereby ensuring smooth and faster flow of goods. Amazon has also identified a need to get into other health care sectors, wherein they have allied with leading health care like Cardinal health and various other distributors. They also have understood the importance of acquisition as most companies would consider themselves blessed if they've been acquired by Amazon, due to its global brand. Amazon has witnessed a huge growth in Europe and at the same time, they've been growing in emerging markets like Asia and Middle-east.

Now, analyzing the strategies put forward, it has been found that the company has remained competitive due to its effective business strategies. The interest shown in extending itself in other areas of business shows how ambitious is the company. They have worked on their logistics tie-up to ensure faster and timely delivery. These strategies discussed above has been helping the company to grow exponentially and it is believed that they encourage more innovative ideas to come in the future which would support them in continuing their growth story.