Analysis of Strategic Management in Amazon Company
Online retailing requires good strategies to ensure that the enterprise can compete effectively in the global arena. Depending on the analysis of diverse factors, specific strategies that are applied to a business may boost or reduce its growth. The vital stimulants of judicious progression in the trade may emerge from the internal or the external business domain that directly or indirectly affects a commercial establishment. To ensure its profitability and expansion, Amazon Company has combined critical thinking, exploratory analysis, and detailed investigation in the formulation of its policies. In addition to its rising presence in the US and the rest of the world, the company has remained a valuable brand since its inception about three decades ago. Therefore, to appreciate the growth of Amazon Company, it is important to understand the enterprise’s generic and diversification strategies, its international moves, ethics standards, social responsibility, and environmental sustainability practices.
Amazon’s Generic Strategy
Analytically, Amazon utilizes cost leadership as its generic strategy to give it a competitive advantage over other players in e-commerce. The reduction of operational costs is the aim of this generic competitive stratagem (Sadq et al., 2018). For instance, the company uses advanced computing and networking technologies to leverage their operational efficiency that in turn shifts to minimize expenses (Onyusheva & Seenalasataporn, 2018). Consequently, the benefits are passed to Amazon’s customers, who enjoy fair prices for quality products. Nevertheless, a strategic aim that is attached to Amazon’s cost leadership scheme is to establish a competitive advantage by consistent furtherance of information technology infrastructure (Sadq et al., 2018). The cost leadership strategy is also related to the company’s aim of great investment in research and development to optimize the performance of the website and other technological resources (Onyusheva & Seenalasataporn, 2018). Accordingly, the strategic objectives of the cost leadership tend to impact Amazon’s marketing mixes which explains why consumers find the company product’s prices to be attractive (Sadq et al., 2018). In essence, the generic strategy of cost leadership makes the competitive advantage to be gained to support Amazon’s mission and vision, especially on online retailing.
Diversification Strategies for Amazon
To understand the diversification strategy being pursued by Amazon, it is important to mention the fact that the company is not only an online retailing enterprise but also a physical commercial retailer. The firm is engaged in product diversification through venturing into different lines of businesses to expand the variety of goods it sells to its customers (Sadq et al., 2018). Apart from its online store that permits the selling and buying of products through the internet, the company possesses physical storefronts such as the American supermarket chain, Whole Foods Market, and the grocery store, Amazon Go. Moreover, the corporation uses the diversification strategy of forming mergers or acquisitions of new firms (Sadq et al., 2018). Through unions and accretions, the company is exploring new business segments. By acquiring new online-enabled commercial businesses, Amazon is horizontally incorporating the larger clientele of internet users (Sadq et al., 2018). The company also manages to integrate different facets of the American retail industry when it acquires other retailers such as Whole Foods Market, Zappos, and Shopbog, among others. Notably, the acquisition of different firms is the chief enabler of Amazon’s diversification strategy.
Internationalization of Amazon
Strengthening and preserving international presence is also a critical consideration in the business strategy of Amazon. Globalization is important for the company due to the stiff competition it faces from other large corporations such as Alibaba Group and eBay, which is an American multinational internet firm, among others (Sadq et al., 2018). As part of its global moves, Amazon has localized its Amazon.com storefront through purchasing and registration of top-ranking domain names hence allowing it to preserve country-specific and language-specific versions of the website in different countries (Onyusheva & Seenalasataporn, 2018). Another remarkable worldwide strategy that Amazon uses is the international shipping of selected products to regions that are outside its scope of operation (Sadq et al., 2018). As a matter of fact, in those countries that Amazon’s website exists in the language-particular versions, the company still exists as a multinational conglomerate. In simpler terms, the company subsists in the global arena as an amalgam of various business entities that are operating in whole different industries but existing under Amazon. As such, the delocalization of Amazon’s website domain names and international shipping ensure that the company has a global market scope.
Code of Business Ethics and Conduct for Amazon Company
The Amazon Company has a myriad of policies and business ethics that the company has formulated to guide its operations. In executing their job duties, the firm’s employees are always expected to act lawfully and in the best interest of the business. Topping the list in the code of business conduct and ethics is the compliance with laws, rules, and regulations by all Amazon’s staff (Amazon.com Inc., 2020). Secondly, the company forbids its staff from allowing their personal interest to interfere with the best interests of the firm. Thirdly, Amazon’s workers are not allowed to trade in stock or other securities while in possession of material nonpublic information (Amazon.com Inc., 2020). Furthermore, the corporation upholds the law against discrimination and harassment in the workplace. Moreover, Amazon Company is determined to provide a clean, safe, and healthy work environment, by urging its employees to abide by the health and safety guidelines in the workplace (Amazon.com Inc., 2020). The company handles price-fixing by barring its employees from engaging in price discussion with other competitors. Evidently, Amazon Company has guiding principles and policies that make it of the best global online retailers.
Corporate Social Responsibility for Amazon Company
It is undoubtedly true that Amazon practices social responsibility in its operations. The company engages in community outreach programs that focus on resolving the most pressing issues of food insecurity, housing, educational support, especially during the COVID-19 relief. In particular, Jeff Bezos, who is the Amazon Chief Executive Officer (CEO), donated a hundred million dollars to American food banks during the COVID-19 pandemic in 2020 (Aguinis et al., 2020). In the same year, the organization donated five million dollars in Amazon devices internationally to the individuals who were in need (Aguinis et al., 2020). More critically, the charitable works from the organization make Amazon staff be proud of their employer even if their jobs do not directly contribute to corporate social responsibility.
Environmental Sustainability Practices of Amazon Company
In as much as the company has an elaborate corporate social responsibility practice, environmental sustainability has not been forgotten. Amazon participates in environmental sustainability programs that are aimed at reducing environmental degradation. This is critical because environmental conservation is important in world development (“Code of Business,” 2020). A good example is the launching of The Climate Pledge in partnership with Global Optimism urging companies to attain a zero result for annual carbon emissions by 2040 (“Code of Business,” 2020). Accordingly, this particular initiative is a refreshing investment in promoting environmental conservation.
Further, the online retailer, Amazon, is steadfast in helping to maintain clean surroundings with little or no wastes. The company offers better packaging with wastes reduction and ensures damage-free delivery (“Code of Business,” 2020). In doing that, the company works to redesign and simplify its sustainable packaging options using a technologically based approach that incorporates lab testing and machine learning (“Code of Business,” 2020). Part of its effort is also entering into manufacturing partnerships to scale sustainable transformation across the packaging supply chain. In particular, there exists an innovation of a recyclable paper padded mailer. According to Amazon’s David Quigg, the ultra-careful work of inventing Amazon’s new reusable paper embroidered mailer required the creativity of the researchers at Amazon’s packaging and materials laboratory (“Code of Business,” 2020). The resulting mailer safeguards the customer’s order, without relying on bulkier boxes, which takes a considerable amount of space for other orders (“Code of Business,” 2020). In essence, Amazon has a clear collaborative partnership with its customers and other manufacturers in reducing packaging and waste from the environment.
In summary, to understand the rise and success of Amazon Company, it is crucial to appreciate the organization’s non-specific and diversification strategies, international moves, ethical practices, social responsibility, and environmental sustainability practices. More precisely, Amazon employs cost leadership as the generic strategy for obtaining a competitive advantage over other giant retailers. In addition, the diversification strategy is advantageous to the organization because it enables it to provide numerous product choices for its clients. The acquisition of the local domains’ names and engagement in international shipping has boosted the company’s international image. However, the organization’s operations in its entirety are guided by a code of business ethics and policies. Again, it is clear that Amazon’s programs in social responsibility are beneficial to society. Environmental sustainability practices are also good for the world and, by extension, the society which depends on the planet in different ways.
Aguinis, H., Villamor, I., & Gabriel, K. (2020). Appreciating staff responses to COVID-19: A behavioral corporate social responsibility perspective. Management Research: Journal of the Iberoamerican Academy of Management, 18(4), 421-438.
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Onyusheva, I. & Seenalasataporn, T. (2018). Strategic exploration of international e-business and diversification mechanics: The example of Amazon. Com. Inc. The EUrASEANs: Journal on Global Socio-economic Dynamics, 1(8), 48-63.
Sadq, Z., Sabir, H., & Saeed, V. (2018). Analyzing the Amazon success schemes. Journal of Process Management and New Technologies, 6(4), 65-70.