Functional Strategy at Amazon When Jeff Bezos started Amazon.com back in 1995, the online retailer focused just
Question:
Functional Strategy at Amazon
When Jeff Bezos started Amazon.com back in 1995, the online retailer focused just on selling books. Music and videos were soon added to the mix. Today, people can purchase a wide range of products from Amazon, which is now the world's largest online retailer, with over $470 billion in annual sales. According to Bezos, Amazon's success is based on three main factorsa relentless focus on delivering value to customers, operating efficiencies, and a willingness to innovate.
Amazon offers customers a much wider selection of merchandise than they can find in a physical store and does so at a low price. Online shopping and purchasing is made easy with a user-friendly interface, product recommendations, customer wish lists, and a one-click purchasing option for repeat customers. To deliver products to customers quickly and accurately, Amazon has invested heavily in a network of distribution centers. In the United States alone, there are now over 100 such centers.
To make its distribution centers work more efficiently, Amazon is embracing automation. In 2012, Amazon purchased Kiva, a leading manufacturer of robots that service warehouses. On the innovation front, Amazon has been a leader in pushing the digitization of media. Its invention of the Kindle digital reader, and the ability of customers to use that reader either on a dedicated Kindle device or on a general-purpose device such as an iPad, turbo charged the digital distribution of books, a market segment where Amazon is the clear leader. It is now leveraging its expertise and infrastructure to build another business, Amazon Web Services (AWS), which hosts websites, data, and associated software for other companies. In 2021, AWS generated $62 billion in revenues, making Amazon the leader in the rapidly emerging field of cloud computing.
Questions
- What functional-level strategies has Amazon pursued to boost its efficiency?
- What functional-level strategies has Amazon pursued to boost its customer responsiveness?
- What does product quality mean for Amazon? What functional-level strategies has Amazon pursued to boost its product quality?
- How has innovation helped Amazon improve its efficiency, customer responsiveness, and product quality?
5. How sustainable is Amazon's competitive position in the online retail business?
6. How would you characterize Amazon's business-level strategy in its retail operations? How do functional-level strategies at Amazon help the company to execute its business-level strategy?
Strategic Management Theory And Cases An Integrated Approach
ISBN: 9780357033845
13th Edition
Authors: Charles W. L. Hill, Melissa A. Schilling, Gareth R. Jones