Amazon Market Strategy Presentation

User Generated

zvxr0619

Business Finance

Description

Unformatted Attachment Preview

1 Marketing Strategy of Amazon. Student’s Name Institutional Affiliation Course Professor’s Name Date 2 MARKETING STRATEGY OF AMAZON. INTRODUCTION Amazon is an internet-based organization whose main activity is selling goods online. Electronics, housewares, music, books, and toys are some of the goods the company sells. The company sells goods directly or acts as a middleman between producers and consumers. Shipping is usually done for products purchased online in the company. Apart from being the world’s largest marketplace, the company is also a great participant in cloud computing and a host of the live streaming market as measured in the revenue and market share. The company’s consumers are assured of quality services and the freedom of making orders for their favorite products in the comfort of their homes. The company has a great admiration from the customers because of its competitiveness and the ability to offer the customers the best products on time and at their convenient places. HISTORY According to McFadden (2021), in Washington, Jeff Bezos founded the company on July 5th, 1995. The organization started as an online market place the trading commodity being books. The company has since grown to sell many products under different categories. The company also has multiple operations branches, including Zoox, Kuiper system, the ring, vehicles, etc. The company has earned a reputation as a significant competitor and challenger of well-established companies in the country and worldwide. The company's extensive market coverage and technological advancement have helped conquer the market. The company has also established itself in streaming and downloadable content operations. Creating a publishing arm in the organization is vital in publishing the company’s books (McFadden, 2021). Television content and 3 film production have also been enhanced through the publishing sector. The company has gradually grown among the big five American companies in the information technology sector. The companies operate not only in America but in the majority of the world countries. CULTURE OF AMAZON The organization’s culture incorporates the following; Constant reinvention and optimization of the organization’s culture. A reassessment must be done whenever the company loses agility and innovation culture. The company is also one of the most customer-centric because of the adherence to their statement, “to be the earth’s most consumer-centric company where the customers are allowed to scroll and find anything they wish online. The company is also to be very diverse in the workforce employed. In the organization, the diversity of the employees is among the core targets. The GLAmazon affinity group comprises gay and lesbian employees and the women and black employees’ network subgroups (Amazon organizational culture: Harsh, but effectively contributing to the bottom line, 2020). The organization’s culture has also been described as “breakneck-paced, and notoriously cost-conscious, as befits a company that has run only a small profit, or a loss, under generally accepted accounting principles for most of its life as a public company.” The company many claims have unrealistic performance standards; in the work culture, there is fear in the company organization of the knowledge of the employee participation. The company has been accused of not allowing the recognition of employee participation. The culture of the company is also pushy and bruising. Amazon is accused of not encouraging the employees (Amazon organizational culture: Harsh, but effectively contributing to the bottom line, 2020). The company employees are not treated well on most occasions, thus claiming that the company has an ancient culture. 4 FINANCIAL PERFORMANCE The minimum income from sales in the company for the last five years is 177.87B earned in 2017, while the maximum revenue from the sales of products in the organization is 489.82B earned in 2021. The median earnings were as of 2019 where the company made sales of 280.52B. The average sales of the organization in the last five years is 309.43B. The earnings in the company in the previous five years has seen a significant increase with the earning from the sales being paid to the company through the international revenue channels. The sales were the largest in North America, accumulating more than 279B US dollars in net sales in 2021. Amazon is the second after Walmart in the market with 10% of the sales. The leading organization, Walmart, has 15% of the market share. In September 2020, amazon had 39.9% of the online retail sales in North America. In Europe, the organization had 9.8% of the retail shares in 2020. These sales include the ones made to the third-party shales in the market. In the third quarter of 2021, profitability fell by almost 50% compared to the same period in 2020. The demand for online sales in the company has also led to an increase in the profits earned in the year. The company is likely to improve its profitability shortly because the movement restrictions have enhanced in the pandemic period. STRENGTHS AND WEAKNESSES OF AMAZON. Strengths • According to Amazon SWOT 2021 | SWOT analysis of Amazon. (2020), the company is the world’s leading online retailer. The cost leadership of the company is excellent in the differentiation and focus. This strategy has led the company to gain profits from the course of the action while also helping the company shareholders evaluate and discover the value of the company. 5 • The competitive advantage of the company from leveraging Information Technology. The use of ecommerce as an easy map in the company helps ensure the company is well ahead of its competitors in the market. • The company also enjoys top-of-mind recall from the company customers worldwide. The recognition in the market has helped the company grow the familiarity even in new markets which are otherwise out of access by other ecommerce companies. • Using more advanced logistics and distribution systems, the company can actualize better customer fulfillment, which helps maintain its customers, thus getting a competitive advantage. Weaknesses • The single-minded focus concerning online retailing may negatively affect the expansion plans in the company because the company operates only online. • The company also operates in the near-zero margin business models that severely have also deterred the company's profitability. Despite the company's high volumes of sales, the company's profits are not meaningful (Amazon SWOT 2021 | SWOT analysis of Amazon., 2020). • The costs incurred in the free shipping services of the company to its customers are a challenge incurred in the bid to maximize the profits earned in the company. • The company has changed its focus from the primary competence of retailing books online and has majored in the new focus areas. Even though this has is an effective defense against the risks of diversification in the future, the company is likely to lose its main advantage since it is leaving behind its core objective. 6 MARKET SERVED Chosen market targets According to Walsh (2015), the United States is Amazon’s main chosen market target. This is due to its recent performance in the market for Amazon’s goods and services. The United States was the company’s biggest market, followed by Germany, ranked second. The company has since established the respective countries as the primary target markets in the current operations. The 263.5 billion in net sales for the US followed by 29.6 billion in Germany made the two nations the main targets for the sales in the company. This implies that the consumer preferences in these countries are catered to in the company. Market analysis The organization must increase the number of offices in the US and Germany to ensure that the customers are served with the necessary urgency. Increasing the number of stores in the countries provides that the target customers' free deliveries are done very quickly. Serving the customers fully ensures that the organization maintains them (Walsh, 2015). Some of the essential resources required in attaining the targeted customers include an increase in workforce and the increase in the number of machines available in the offices. The company must also encourage technological advancements that will ease customer services. The restriction in the market includes the competition expected from other companies like Walmart and the Alibaba Group. There are also other upcoming retailers in the countries, which would negatively affect the organization's market acquisition. 7 COMPETITION The main competitors of the company include a mix of online-only business models. They all have their advantages over Amazon and compete with one another (Walsh, 2015). The competitors include; eBay, Flipkart, Target, Otto, Alibaba group, Netflix, Rakuten, and Walmart. The online stores in the US are mainly small business that uses e-commerce as a form of trading. E-commerce has increased the total retail sales in the country by more than 21% in the US alone. Despite Amazon’s large market, the small business owners have been accruing massive profits from their businesses. The online stores which operate with unique products that one cannot get anywhere else always have the advantage over Amazon. For example, the Treehouse kid and craft-based in Georgia specializes in kids’ toys and books that are unique products made worldwide. The scale covered by Amazon is massive, but it is possible to outshine the company in terms of the fantastic products offered, and the customer desires met by personalized shopping experiences. ENVIRONMENT Economy. Economic growth has always positively affected Amazon and its competitors because there is an availability of market for its products. The taxes paid by the organizations in a growing economy negatively affect the companies because an increase in the percentage taxed on the organizations’ income decreases the company's income. Creating job opportunities for people in the country helps the company grow its market availability. Technology. The recent innovation in technology has only improved the sales of online-only retail companies. Amazon, for example, started in 1994 selling books online. In that year, there were 8 only computers and no smartphones. Communication efficiency was little since one could not call or be called for the deliveries in an emergency (Elliot, 2018). The invention of mobile phones in 2007 and the development of applications for such companies have improved the companies’ sales. The spread of advanced technology has helped the companies access more customers quickly because both parties have access to the internet, which is the marketplace. Government policies According to Elliot (2018), the government involvement in enhancing the online marketing infrastructure, including the promotion of fast internet in the country, positively affects the sale of products by Amazon and others. The increased taxes for exported products will likely discourage international customers from importing products online. Highly taxing the products sold in the company negatively affects the organization and its competitors. The Amazon company is already established that cannot quickly go broke due to taxation. This gives the company an advantage over its competitors because the growing companies are likely to go bankrupt. Subsidizing online marketing by the government helps reduce the cost of sales of the online products, which encourages the buyers, thus more income. Culture According to Understanding how culture impacts local business practices (2020), the different cultures of the targeted market by Amazon and other online-online retailers affect the companies differently. In a country, for example, where certain products sold online are not consumed, the products are not likely to be sold in the country. This means that the company will depend on the market from other parts. This means that the sale of different commodities in the government cannot estimate the sale of the other. The level of education for various communities 9 worldwide affects the company's market since the company sales depend on the customers' ability to operate their electronic devices like phones and computers. Natural Environment The natural environment affects the input of infrastructures in a country. In a country where there are no good infrastructures necessary for shipping the products to the customers, it can challenge the company to deliver all the products ordered online. In some countries, bad weather affects the power generated by water sources which can temporarily lose power access. This propagates a disruption in access to the online market, leading to significant loss to the company. MARKETING MIX OF THE ORGANIZATION Product Lines Amazon launched the Kindle and e-reader, which can download content over a wireless network. The e-reader was used in the company to launch different books and also market them on the platform. This makes it easier for the company customers to acquire similar products easily. The invention of the kindle fire has helped introduce several products, including tablets (Amazon.com Inc.’s marketing mix (4Ps) analysis., 2017). The kindle also runs in the android operating system, which means that a single brand has plenty of products that can also be introduced in the brand. The company has been releasing successive generations of tablets under kindle. The introduction of the amazon fire tv set-top box has seen many systems like the apple tv or the google chrome cast be introduced under the brand. In 2014, the company began selling a voice-enabled bright called the echo. In 2016, the company launched the Echo Dot, a cheaper and smaller version. This helps the company promote sales because people are likely to buy from a brand they already know about. Pricing 10 According to Amazon.com Inc.’s marketing mix (4Ps) analysis. (2017), Amazon uses low prices to attract customers to its business and give reasonable offers for its products on the website. Some of the pricing strategies used in the company include; the price discrimination strategy, the market-oriented, and value-based pricing strategies. The primary pricing strategy in the company is market-oriented pricing. The company first evaluates the pricing by the competitors to determine the prices of their products. The main con of this strategy is that it makes the sale of products more competitive. The target customers find this marketing strategy attractive and affordable. The price discrimination pricing method involves setting different prices for a similar product. Under the other websites, Amazon applies this strategy. For instance, in the US and the UK, the costs for the same product are different. The pricing method is suitable as it enables the company to apply different prices on the products depending on the national market strategy, the consumer expectations and preferences, and the perceived value of the products. The company also uses value-based pricing, which involves the determination of the prices using the product values and considering the customer’s views on the values. Channels of distribution. Amazon uses the company platform to sell the products to the consumers directly. An example is the use of the kindle, which avoids intermediaries in business. This is also the most natural process used in marketing. The organization sells directly on its website to prevent costs incurred in using intermediaries. This also helps to maximize the profits and sell the products to customers at low prices. Advertising Video Ads placed on the sites owned by the organization are the most common form of advertisement. The company uses such sites as Amazon fire tv, IMDb, and amazon.com to place 11 the Ads. The Amazon marketing services is also an online service operated by the organization to advertise their products and other sellers’ products (Amazon.com Inc.’s marketing mix (4Ps) analysis., 2017). Personal Selling The company allows individual sellers to advertise and sell their products on their websites. The company itself does not sell products that need personal selling. Public relations in Amazon The organization has more than 500 employees working in public relations working in the world. Unlike many others, the company does not require its public relations workers to report to marketing. Therefore, the company’s public relations team is allowed a direct line to the internal business owners. The public relations officers in this company also work independently of the marketing department in the company. The public relations workers have the task of maintaining the company’s reputation and creating goodwill. They are also tasked with growing the trust of buyers around the world. The company is highly trusted, implying that public relations workers are good. Sales promotions. The global promotions sales dashboard in the company website enables the cross-border sellers to monitor the market-level sales generated in the organization (Amazon.com Inc.’s marketing mix (4Ps) analysis., 2017). The seller affiliate links where the sellers have their blogs and YouTube channels are also a standard promotion method used by the traders in Amazon. The free shipping services offered by the company are also a method used by the organization to promote their products over their competitors. The promotions offered on the company website by a specific seller do not apply to other sellers’ products, although they might be similar. 12 Service The Amazon company uses a combination of promotions, pricing, and advertising to offer services to its customers. The company has various services provided to its customers through its website. Services including networking, storage, and security are provided on the company website (Amazon.com Inc.’s marketing mix (4Ps) analysis., 2017). The product buyers do not need to move to the company stores as the required services are provided online. The company also helps other traders promote their products to the customers by offering a website to make bookings for the shipping and advertise their products. The organization provides services to customers and traders who wish to use their websites to improve sales. EVALUATION OF THE COMPANY’S STRATEGY & MY RECOMMENDATIONS. The primary strategy of the Amazon organization is concentric diversification. The strategy is based on promoting the technological capabilities for the organizational progress and the cost leadership strategy in the company that helps in offering the best products to the customers at the lowest prices. The sale of their products in the online platform allows the company to maintain the physical workers as the required number of workers is minimum. This is enhanced because advertising online helps a single worker using the computers do tasks equivalent to several physical workers’ jobs. This strategy has been paying off well because the company has moved from a simple bookselling retail business to become the world’s largest online retailer leading consistently in the market segments of its operations. The company also offers discounts to its regular customers, which helps maintain its reputation; thus, their customers can purchase from them continuously ("Analysis of Amazon's Corporate Strategy." Management Study Guide - Courses for Students, Professionals & Faculty Members, 2022). The recommendations by the company made online also 13 help ease the selection dilemma on the customers because they can choose from the comfort of their homes. The free shipping offered in the company supports the customers saving on the transport costs, which allows the company to manage their customers over the competitors who do not deliver to ship the purchases. I recommend that the company adopt a global approach in the international market that helps the global business model integrate the logistics supply chain and the local deliveries. This will help create a globally accessible chain where one can purchase anything from any part of the world. The company should also maintain its core competencies which will help keep the market while also expanding the local value chain in the company. 14 References "Analysis of Amazon's Corporate Strategy." Management Study Guide - Courses for Students, Professionals & Faculty Members, 2022, www.managementstudyguide.com/analysis-of-amazoncorporate-strategy.htm. Amazon organizational culture: Harsh, but effectively contributing to the bottom line. (2020, March 22). Research-Methodology. https://research-methodology.net/amazon-organizational-culture-harsheffectively-contributing-bottom-line-2/ Amazon SWOT 2021 | SWOT analysis of Amazon. (2020, November 21). Business Strategy Hub. https://bstrategyhub.com/swot-analysis-of-amazon-amazon-swot/ Amazon.com Inc.’s marketing mix (4Ps) analysis. (2017, February 20). Panmore Institute. https://panmore.com/amazon-com-inc-marketing-mix-4ps-analysis Elliott, L. (2018, October 3). Even Amazon must heed the fundamental laws of politics and economics | Larry Elliott. the Guardian. https://www.theguardian.com/technology/2018/oct/02/even-amazonmust-heed-laws-politics-and-economics McFadden, C. (2021, February 17). The rise and rise of Amazon: A brief history of the everything store. Interesting Engineering. https://interestingengineering.com/a-very-brief-history-of-amazon-theeverything-store Understanding how culture impacts local business practices. (2020). Site not found · GitHub Pages. https://saylordotorg.github.io/text_international-business/s07-03-understanding-howculture-impa.html Walsh, T. (2015, April 25). The four largest markets for Amazon.com, Inc. The Motley Fool. https://www.fool.com/investing/general/2015/04/25/the-4-largest-markets-for-amazoncominc.aspx
Purchase answer to see full attachment
User generated content is uploaded by users for the purposes of learning and should be used following Studypool's honor code & terms of service.

Explanation & Answer

View attached explanation and answer. Let me know if you have any questions.

Amazon Market Strategy
Student Name
Institutional Affiliation
Course
Professor
Date

Introduction



Amazon is one of the largest online retailers




The company is highly diversified

It deals with products such as electronics,
books, and toys.
Its other business activities include ondemand video streaming and cloud
computing.

2

History


Founded by Jeff Bezos on July 5th, 1995
(McFadden, 2021)




Originally an online marketplace for books



Its IT adoption has been a significant
contributor of its growth.

Amazon has since become one of the five
largest companies in the IT sector.

3

Organizational Culture


Strict focus on constant re-invention and
culture optimization.




Very customer-centric



Associated with unrealistic performance
standards and poor employee treatment.

The company targets employee diversity by
including gay, lesbian, and minorities within
the workforce.

4

Financial Performance


Minimum annual sales income since 2017 is
178.87B



Thrived in the pandemic, earning 489.82B in
2021



Currently the second-largest retailer with a
10% market share



Amazon likely to improve its financial
performance in the future.
5

Strengths and Weaknesses
Strengths

Weaknesses

• Excellent cost-leadership
strategy
• Competitive advantage
from leveraging IT
• Significant brand familiarity
and recognition globally
• Advanced logistics and
distribution systems

• Single-minded focus on
online retailing.
• Near-zero margin business
model
• Free-shipping affects
business profitability.
• Diversification risks

6

Market Served




US is the company’s chosen market target, followed by Germany.



Companies such as Walmart and Alibaba are a threat to its market
acquisition

Amazon has invested in offices in US and Germany, its main markets

Accompanied the offices with capacity improvements in terms of
workforce and resources

7

Competition


Main competitors are other online-only
businesses and retailers



These include eBay, Alibaba, Walmart,
Rakuten, and Target



Small businesses with unique products are
a significant threat



These have the advantage of closer and
more personalized shopping experiences
for the clients
8

Environment
Economy
• Economic growth has
positively affected
Amazon.
• Taxes continue to pose
a threat to business
profitability.

Technology
...

Related Tags