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Written Assignment Unit 6

University of the People

Bus: 5114

Instructor: Savdeep Vasudena

18/5/2022
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INTRODUCTION

Amazon is a prominent e commerce online store that was founded by Jeffrey

Bezo, the former president of De & Shaw investment bank. Initially the business

began as a small scale business focused on selling books online. With little

knowledge about the internet which was relatively new and limited at that time,

Jeffrey decided to implement its potential into the business optimistic that it would

yield results. Surprisingly, within a short period of venturing into the market,

Amazon became universally acclaimed and recognized for its outstanding service.

The massive success obtained from their books, prompted them to delve into other

sectors like music, electronics etc to provide other streams of revenue and to also

create awareness about their brand to their target audience. (Sadq et al 2018).

So far Amazon has transcended beyond its competitors in the market and continues to

soar as it delivers astounding quality products to customers. Its groundbreaking

innovations and active use of the internet continue to attract more potential customers

to its brand as well as help them in retaining customers. Nonetheless, its massive

advantages, amazon still has some areas where they are lapses. This case study

focuses on the Amazon’s competitive advantage, how the marketing mix enables their

business flourish, their market trends or overall trends.

 Analyze Amazon.com using the competitive forces and value chain models

from the research article above. How has it responded to pressures from its

competitive environment? How does it provide value to its customers?

Furthermore, Porter's model helps us to identify Amazon's competitive

advantage over its competitors. Initially, the company began in 1995 and was founded

by Jeff Bezo, in Seattle. Like most new entrants, Jeffrey had little knowledge of the

internet but relatively through comprehensive research believed that the internet could

be leveraged to help them grow their business. Already, we can see that Amazon

began in a market where competition was relatively low because prior to its success,

there was limited knowledge about the internet.According to the article, the objective

of Amazon is to become a platform where consumers can buy, find and discover any

product or service of their choice. To become recognizable and broaden its

distribution coverage, Amazon responds to pressure from its competitive environment

by focusing on customers and using advanced technology to enhance customers'

shopping experience as well as their e-commerce site. (Sadq et al 2018).

However, we live in an era where technology is omnipresent, there are

numerous online retail shops and shopping online is cost-effective. In addition, it

would be difficult for new entrants to surpass Amazon because of the company's

investment in a wide range of sophisticated technological tools which helps them

deliver superior customer service at an affordable rate and time. Additionally, this is

how Amazon adds value to its customers.

 Describe Amazon’s evolving business strategy from the readings above and

your own research. Why did the company change its strategy?

1. A strong brand name location: According to the article, Amazon is believed to

understand the real potential of e-commerce and how the internet retail business

works. It initially began its operation with the aid of the internet which it soon

discovered was its niche. A place that provides unlimited access to customers, is cost-
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effective, efficient, readily available, and easily accessible at any time. Progressively,

Amazon has broken the streak of Apple and Google to become the most valuable

brand worth approximately 395bn.

From my own perspective, I believe a strong brand name location also means

brand positioning. It simply refers to positioning your products in the mind of

customers. This can be developed by creating a lasting impression about your

products in the mind of customers. Essentially, Amazon is a customer-centric

company that provides customers with the ability to shop for any product of their

choice at a cheap rate and with speedy delivery. Over the years, Amazon has been

able to accomplish brand positioning. By emerging as an online book store they

progressively diversified into different markets in order to deliver services to their

various customers that way Amazon began establishing and building its reputation

and credibility.

2. Providing clients with marvelous value and superior shopping knowledge. As

stated in the article, one way to achieve value is to listen intently to customers'

complaints, encourage and publish customer reviews. Furthermore, in order to reduce

friction in the buying process amazon has created new features such as one-click and

amazon prime which helps to facilitate the buying process.

3. Considerable sales capacity

4. Economies of scale are the advantages that can occur as a result of increasing the

size of a business. Amazon enjoys economies of scale far beyond its online

competition, and it can use that power to offer hyper-aggressive prices and fast, cheap

shipping.
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 Why did the company change its strategy?

I believe Amazon changed its strategy in order to become diversified.

Diversification allows customers to have more preferences to choose from and also

provides other streams of income for the company. if done rightly, diversification can

enhance a brand image and company profitability. Also by diversifying products or

services, a company can protect itself from competing companies. (corporate finance

institute.com, n.d.)

 Conduct research and discuss the different markets that Amazon.com is

expanding into (Books, Video, Music, General Merchandise, Cloud

Computing, Devices). Discuss the competitive advantage that Amazon.com

has in these diverse markets.

There are a few strategies Amazon has been known to employ in diversification.

Predominantly, they focus on their customer's priorities and how to deliver them with

ease. Bob Cut Editors (2022). Secondly, Amazon uses a cost leadership strategy that

is similar to their competitor Walmart, which focuses on selling quality goods at a

cheaper rate to customers. Also, its website is easily accessible by customers with

features like past purchases, search queries, most viewed items, customers review,

and Amazon ratings, all these tiny details in its website have succeeded in winning

customers’ loyalty and trust. Nonetheless, Amazon also has a customized delivery

option called“Amazon Prime”. Bob Cut Editors (2022). Although these products may

be relatively similar to that of their competitors. Using intricate technology for swift

delivery, organization, packaging of items, and selling at a low price could be good

leverage the company has over its competitors. Amazon's competitive advantage also
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varies with the product because some product's performance outweighs those of

others. Bob Cut Editors (2022).

Product Marketing is based upon the five P’s (Product, Place, Promotion, Price,

and Profit). Discuss the Amazon.com approach to each and how this contributes

to competitive advantage.

 Products: Amazon is the largest online retail shop that sells a variety of products

to customers. Initially, it began as an online book store and expanded over time to

various segments in other to meet the needs of the different target audiences.

Most of their products can be purchased directly from Amazon or through a third-

party agent. Hence delivering offerings that are not tawdry or of inferior quality

but are consistent would help to increase customer retention, generate referrals,

and attract new customers. MBA Skool Team (2021)

 Place - Amazon is an internet-based company that allows customers to shop with

ease and without friction. Since the internet is easily accessible through laptops,

tablets, and phones. Customers can swiftly make their purchase and without

hesitation, it would be delivered to their doorsteps. This indicates that the place a

business is situated can be a competitive advantage. If a business has close

proximity to where its target audience is situated, The company would generate

more profit compared to its competitors who may be some distance away. MBA

Skool Team (2021)

 Promotion - in order to encourage customers to procure more items and to

generate awareness of the brand. Amazon offers incentives, discounts, and

coupons on sales. They also offer exclusive services like the Amazon prime free

shipping on delivery to spur customers to buy more. MBA Skool Team (2021)

 Price - As stated earlier, Amazon sells products at a relatively low price and still

retains the quality of these products. As humans, we are attracted to things that

are affordable thus this would definitely arouse our interest. MBA Skool Team

(2021)

 Profit- amazon operates on very few profit margins.

Do you think Amazon can continue to be successful? Explain your answer.

In my own opinion, I believe is difficult to portend because we live in a vast

economy where everything keeps evolving the way we communicate and run business

in the past is utterly different from how it is currently. According to what I've learned

from disruptive innovation, a new entrant might emerge just like Tesla did in the

automobile industry, creating electric vehicles for a sustainable environment. This has

changed our perspective on cars as other companies like Google have begun

experimenting and creating self-driving cars. Therefore, it's plausible that a new

entrant might emerge and plunge down Amazon’s long-lasting streak in the e-

commerce industry at any time hence change is constant but structural change is

imperative and companies must continue to take risks and adopt new measures or

benchmarks to continually stay ahead of their competitors.

References
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Bob Cut Editors (2022). Amazon”s competitive analysis-what is competitive

advantages. Bobcut.com. Retrieved from https://bobcutmag.com/2022/04/04/amazon-

competitive-analysis/

MBA Skool Team (2021). Amazon Marketing Strategy & Marketing Mix (4Ps).

MBA skool.com. Retrieved from

https://www.mbaskool.com/marketing-mix/services/17022-amazon.html

https://www.kabbage.com/resource-center/grow/brand-positioning-what-it-is-

and-why-its-important/

https://corporatefinanceinstitute.com/resources/knowledge/strategy/product-

diversification/

Sadq, Z. & Nuraddin, S., & Hama, S.. (2018). Analyzing the Amazon success

strategies. Journal of Process Management New Technologies, 6(4), 65-69.

10.5937/jouproman6-19264. Retrieved

from https://www.researchgate.net/publication/328689933_Analyzing_the_Amazon_s

uccess_strategies