strategic management

please help me to answer this case

STRATEGIC MANAGEMENT SECTION A - Case Stady Scenario Instructions: Answer Al.L. questions in this section after reading the case study. ( 30 marks) Amaron"s Vertical Intecration Jeff Beros, the owner of Amaron has become the werld's richest persoe with a net worth of approximately $200 billoon. This can be attribeted to the extremely fast grow th in the share value of Amazon. One of the pectsicr reasons behind this fast gowth is vertical inteyration. First Amaron starts uasing the services itself. Over a pcriod of time, Amamob builds operational efficiencies in these services. Once these services have a competitive advantage over similar other services, Amaren offers them to ether copperations and users. This model has been wildly successful and has been instrumental in making Amwoen the giant that it is today. When Amaron started its basiness, it wanted to be an asset-light company. Besos was of the opinion that be would simply pass on the orders frem the custorncrs to the pablishers. However. he soon realired that the onder fulfillment and cassomer servise was weak. As a resalt. Amanon had to create its own warchoses. Jeff Beres las invested a lot of time and meney in making Amanon's warehouses the most eflicient ones. Tedxy, thene watchouses are largely rua by ising Iochnology like foboties peocess automation. These warchoases officr the lowest cost amongst their competitors. Once Amaran was sure that it cesll tale ee competition, it started offerifg the service to other companies. Amaron has also developed cone of the best clood cemputing exosystems. Amaano's business model has tradtionally relied on the uye of oumputing lochnology to gain better insights into customer behavior. As a resule, Amaton acy aircd a lot ef sterage space, databases and created other applications for its own use. Flowever, these applications were built in sech a way that they could be offered to other smalles businesses as wetl. Amaxon has recently announced its intenticen so lasech its detivery businesc. This has sent the shates of companies like UPS and Fedtx inito a tixxy. Afler all, Amawe is the master of innovation. It has been working en technologies bike drone deliveries to reduce the cost of its operations. It is also knows te be evperimenting with oeher iechnologies sach as in-house deliveries. Oa the other hand, companies like UPS have massive unions. The workers there are opposed to any kind of technological adiancement. Thcy belicve that the increase in operational efficicncy will lead to job loss and redundancy. To sum it up, Amaren has become the master ef vcritical intcyation for enline companics. When internet busisesses stared thriving, there was considerable ambigaity as to whether they will be able to achieve vertical intepraticn. Amanon has ecrainly shewn the way. It is ea the way to boconing one of the most vertically integratod companics it the world. Questions: 1. Describe Amazon"s vertical integration strategy and eetline its value chain activities. (12 marks) 2. Discass three (3) beecfits and three (3) risks of Amajon's vertical integratioa sirategy. (12 marks) 3. What is Amaren's level and type of diversification? Justify yeur answer. ( 6 marks)