The company started its operations in July 1995 to serve the consumers through retail website with the focus on choice, price and convenience. To compete with the competitors and to increase the market share, the company focuses on the strategies at business and corporate level (Amazon 3). In relation to corporate level strategies pursued by the company, the company uses mix of strategies like market penetration, diversification, product development and market development.
Corporate Strategies pursued by the Company
Diversification
One of most prestigious strategies used by the top management of the company is the diversification. The company’s growth is linked to the transformation from an online bookseller to a company offers wide-range of products, services and devices. The company pursued diversification strategy and competed with the media companies like Netflix, Apple (i.e. hardware manufactures), Google (i.e. search and advertising company) and Uber (i.e. on-demand transportation and delivery) (Bensinger and Kuronen). Appendix A provides an overview of how the company diversified successfully to achieve competitive edge. The company has achieved competitive advantage over its competitors through continuous efforts to diversification. For example, the company offers consumers low prices with premium perks like free shipping. In addition, the web services of the company provide web-based computing services such as storage. These types of diversifications made the company a critical competitor for the traditional retailers (Moylan).
Market Development
The company expanded its operations into new geographies as it offers existing products to new markets. For instance, Amazon expanded its operations through e-commerce in China, Canada, India, the U.S. and the U.K. The company moves to web-services because of the growing trend of online shopping by the consumers like China (Amazon 5). The CEO of the company (Bezos) is more focused to invest in India as Indian online shopping market is expected to hit $8.5 billion in 2016 from approximately $2 billion in 2013. Hence, Bezos is committed to invest about $ 2 billion in the Indian operations and for this a lease deal has been finalized of 1.3 million square feet of office space in Bangalore (Arakali).
Product Development
The company is involved in the new products’ development as a corporate strategy. Recently, the company launched the new product named Echo i.e. a talking and listening piece of the electronic furniture (Campbell-Dollaghan). In addition, it has developed the new products to meet the needs of consumers, such as Fire TV box, Kindle Fire HD tablet, and Fire tablet, etc. The company introduced new products to win at entertainment as the focus is on the entertaining of consumers (Pierce).
Market Penetration
The top management of the company is also focused on the strategy of market penetration to increase the market share. It can be ascertained by the fact that the focus on cost leadership and innovation enabled the company to penetrate in the market and achieve competitive advantage over the competitors (Wahba). Appendix B identified how the company penetrated in the market and other brick and mortar retailers are far behind Amazon.
On the basis of internal and external environmental analysis of the company and corporate strategies pursued, the company is recommended to take following steps to sustain its competitive edge.
Recommendations
It is recommended to the company that it should expand its operations significantly across the emerging markets like India. The main reason is that rate of internet shopping is increasing in the emerging economies like India. Another reason is that the competition level in the Asian market is low in comparison to developed countries.
It is also recommended to the company to acquire small and big e-commerce companies to decrease the competition level and to increase the economies of scale to capture market share.
The company should also open physical stores outside the U.S. where the consumers prefer to purchase offline. It will not only help the company to increase the association between brand and consumers, but also the customer base.
It is also recommended to the company to make investments in the technology service market to sustain the position in the market and to further increase market share.
In addition, the company should increase the focus on the cloud computing for the long-term profitability.
The company should also develop economic and political relationships with the different countries’ governments by developing partnerships. Moreover, partnerships should be made with the IT organizations work under governments to increase the chances of investment opportunities. It is important to avoid the risks linked to countries’ external environment.
Furthermore, the company should avail the opportunity related to movies and TV shows. For instance, the company should increase the investment level in the European films and TV shows as currently the company provides its Prime Instant Video service to its customers in Germany, Austria, and Britain. Hence, it should expand the operations in Europe and France (Blumenthal).
Above recommendations will enable the company to increase the growth level along with high level customer base. Moreover, the company will be able to sustain its position in the market than competitors.
Work Cited
Bensinger, Greg and Kuronen, Jess. How Amazon Has Diversified. Jun 1, 2016. Web. Aug 10. 2016. < http://www.wsj.com/articles/how-amazon-has-diversified-1464829457>
Moylan, Martin. Amazon gets Wall Street's blessing to grab growth now, profits later. Jan 20. 2016. Web. Aug 10. 2016. < http://www.mprnews.org/story/2016/01/20/amazon-retail-growth-pressures-target-best-buy>
Arakali, Harichandan. Jeff Bezos More Focused On Amazon Winning In India Than Turning Around In China: Report. Sep 03. 2015. Web. Aug 10. 2016. < http://www.ibtimes.com/jeff-bezos-more-focused-amazon-winning-india-turning-around-china-report-1843144>
Pierce, David. Amazon Has 6 New Devices—And an Actual Plan for Hardware. Sep. 17. 2015. Web. Aug 10. 2016. < http://www.wired.com/2015/09/amazon-six-new-devices-finally-good-plan-hardware/>
Campbell-Dollaghan, Kelsey. Amazon's Echo Might Be Its Most Important Product In Years. Jun. 11. 2014. Web. Aug. 10. 2016. < http://gizmodo.com/amazons-echo-might-be-its-most-important-product-in-yea-1655513291>
Blumenthal, Eli. EU pressures Netflix, Amazon to invest in European programming. May 27. 2016. Web. Aug 10. 2016 < http://www.usatoday.com/story/tech/2016/05/25/eu-pressures-netflix-amazon-invest-european-programming/84901562/>
Amazon. Annual Report. 2015. Web. Aug 10. 2016. < http://www.annualreports.com/HostedData/AnnualReports/PDF/2015%20Annual%20Report.pdf>
Wahba, Phil. This Chart Shows Just How Dominant Amazon Is. Nov 6. 2015. Web. Aug 10. 2016. < http://fortune.com/2015/11/06/amazon-retailers-ecommerce/>
Appendices
Appendix A
Source: Bensinger and Kuronen
Appendix B
Source: Wahba
