Strategy

Management
About Amazon
Full Name: Amazon.com, Inc
Website: https://www.amazon.com/
Date and place of establishment: July 5, 1994 in
Bellevue, Washington
Founder: Jeffrey P. Bezos (CEO, chairman of the
board)
Headquarters: Seattle, Washington
Business: Cloud computing, digital streaming,
artificial intelligence, and e-commerce
Scale: Global ( main markets in the US, Europe, Asia. )
Revenue: $280.522 billion (2019)
Strategic role in Amazon’s success
The role of business strategy plays a core role in helping Amazon maintain
its leading position in the e-commerce and technology market.
Outstanding strategic elements:
Low-cost and operational optimization strategy
Differentiation strategy
Scale development strategy
Amazon’s strategic goals

Understand Amazon's business model and

growth strategy
Analyze the core elements of Amazon's
business strategy
Evaluate external environmental factors and
internal factors that affect Amazon's
business
Amazon’s mission

Amazon's mission statement “to be Earth’s

most customer-centric company”
Amazon’s mission
This mission statement drives Amazon’s
focus on four major factors:
The lowest prices
The best selection of goods and services
Convenience in e-commerce:
Global industry leadership
Amazon’s vision
“to be earth’s most customer-centric company, to build a
place where people can come to find and discover anything
they might want to buy online.”
Amazon’s vision

The following characteristics are determined

in Amazon's vision statement:
1. Global range
2. The best employer
3. The safest workplace is the "Global Class
Scope" in the statement of the range of range.
Amazon’s vision
Objective: become the company with the most
satisfied customers in the world.

Scope: Amazon operates in a very wide range, from e -

commerce, cloud computing (AWS), to digital services
(Amazon Prime Video, Amazon Music), and even new
technological initiatives (like Amazon Go, AI
technology, and products from Amazon Robotics).
Amazon's competitive advantage
lies in some outstanding factors

The ability to provide excellent customer

service

Technology and automation

Focusing on innovation

Scale and expansion

AMAZON VALUE PROPOSITION Customer Obsession

Aiming to make Amazon the “Earth’s most Product Selection

customer-centric company” by
Convenience
continuously enhancing the customer
experience. Prime Membership

Digital services
Key Elements of
Amazon’s Value
Proposition
1. Convenience & Speed – One-click ordering,
saved payment options, and fast/free shipping
reduce friction and cart abandonment.
2. Wide Product Selection – Customers can find
almost anything they need in one place.
3. Competitive Pricing – Low prices make
Amazon an attractive option.
4. Risk-Free Shopping – Easy returns with free
shipping labels increase customer confidence.
5. Personalized Recommendations – Automated
marketing suggests complementary products to
enhance purchases.
6. Trust & Transparency – Customer reviews help
buyers make informed decisions.
Amazon’s core competency in e-commerce,
logistics, and customer-centric innovation
has been the foundation of its success and
diversification.
Cloud Computing (AWS)
Media & Entertainment
Smart Devices
Logistics & Supply Chain Mastery
E-Commerce Excellence
 Amazon’s competitive
strategies
Cost Leadership Strategy:
Amazon leverages advanced technology and
automation to reduce operational costs.
This allows the company to offer competitive prices
while maintaining profitability.
Investment in R&D:
Heavy investment in research and development
optimizes IT efficiency.
Supports Amazon’s continuous growth and
strengthens its market position.
Supporting Business Partners:
Amazon introduces new tools and programs to help
brands grow.
Demonstrates a strategy that goes beyond cost
reduction, fostering mutual success.
 External factors evaluation (EFE Matrix)

Key External Factors Weight Rating Weighted Score

Opportunities

Increasing the number of

0.06 3 0.18
buyers over the Internet

Positive changes in the

book-selling business and 0.06 4 0.24
market

Growth of Internet users,

predominantly in 0.13 3 0.39
international markets
Key External Factors Weight Rating Weighted Score

E-commerce expansion in Asia and the Pacific 0.10 2 0.20

Increasing product categories 0.08 4 0.32

29% expected increase in online retail sales in 2006 0.08 3 0.24

Young people's acceptance of new technology and

0.03 4 0.12
innovative ideas
Key External Factors Weight Rating Weighted Score

Weak U.S. dollar boosts the value of

0.03 2 0.06
international currencies

Threats

Competition from eBay, Barnes & Noble,

0.15 3 0.48
OLX, and Book-A-Million

Potential rejection of online sales due to

0.03 3 0.09
new international taxes

Increased competition due to low

0.12 2 0.24
market entry barriers
Key External Factors Weight Rating Weighted Score

Government regulations affecting e-

0.05 3 0.15
commerce and product sales

Strong U.S. dollar lowering the value of

0.03 2 0.06
international currencies

Baby Boomers' lack of computer literacy 0.05 4 0.20

Total 1.00 2.94

Internal factors evaluation (IFE Matrix)

Internal Factors Weight Rating Weighted Score

Strengths

Strong global logistics network 0.15 4 0.60

Diversified ecosystem (AWS, Amazon Prime,

0.13 4 0.52
Marketplace)

High customer loyalty 0.10 3 0.30

Large economies of scale 0.10 4 0.40

Innovation and AI/ML capabilities 0.12 4 0.48

InternalFactor Weight Rating Weighted Score

Weaknesses

Dependence on the US market 0.10 2 0.20

Regulatory and antitrust challenges 0.12 2 0.24

Employee working conditions

0.08 2 0.16
complains

Low profit margins in retail 0.10 2 0.20

Total 1 3.10
With a score of 3.10, Amazon has a strong internal position, leveraging
its technological advantages, logistics, and economies of scale. However,
it must address regulatory challenges, labor issues, and its reliance on the
U.S. market to sustain long-term growth.
Category Amazon's Long-Term Objectives Droppi's Long-Term Objectives

Maintain a dominant position in global e- Expand globally and establish a

Market Position
commerce strong presence

Empower entrepreneurs by
Customer-centric approach – aims to be
Customer Focus providing better e-commerce
“Earth’s most customer-centric company”
opportunities

Technology & Develop innovative e-

Expand into cloud computing with AWS
Innovation commerce solutions

Focus on human resource

Continuously exploring new business
Diversification development for long-term
ventures and industries
growth
FOUNDATION (1994-1997)

Founding: Amazon was founded by Jeff Bezos in

1994.
Initial Operations: The company was originally called
"Cadabra", but it was later renamed Amazon.com in
1995. The site was launched in July 1995, and initially,
it only sold books.
Early Challenges: limited funding, competition from
existing brick-and-mortar bookstores, and customer
skepticism about shopping online.
 Salford & Co.

GROWTH AND EXPANSION

(1997-2000)
Expanding Product Categories: After its
success with books, Amazon expanded
its product offerings to include
electronics, toys, clothing, and more
Amazon Marketplace: In 2000, Amazon
launched Amazon Marketplace, allowing
third-party retailers to list products on its
platform.
TECHNOLOGICAL INNOVATION AND
DIVERSIFICATION (2000-2008)

Launched Amazon Web Services (AWS) in

2002, becoming a leader in cloud
computing.
Introduced Amazon Prime (2005) for fast
shipping and other perks.
Kindle (2007) revolutionized the e-book
market.
Expanded internationally into key global
markets.
CONTINUED GROWTH AND
MARKET LEADERSHIP
(2008-2020)
AWS Becomes a Growth Engine
Major Acquisitions
Zappos (2009)
Whole Foods (2017)
Ring (2018)
Alexa and Echo
Innovative retail models
Logistics and delivery
MODERN-DAY CHALLENGES AND
STRATEGIES (2020-PRESENT)

COVID-19 Pandemic
Sustainability Initiatives
Global Competition and Antitrust
Scrutiny
Focus on AI and Robotics
Criteria Amazon’s CSR Initiatives Droppii's CSR Initiatives

Empowering entrepreneurs,
Sustainability, community support,
community building, efficient
Main focus employee welfare, and ethical
supply chains, and providing
business practices.
educational resources.

- Climate Pledge: Committed to

net-zero carbon emissions by
2040 (accelerating the goals of the
Focus on optimizing supply chain
Paris Agreement). - Renewable
efficiency to potentially reduce
Environmental Energy: Largest corporate
environmental impact through
sustainability purchaser of renewable energy
improved logistics and resource
globally, aiming for 100%
management.
renewable energy by 2025. -
Investments in electric vehicles
and sustainable packaging.
 - Affordable Housing: Over $2
billion invested in creating and
preserving affordable housing Empowers sellers by providing tools and
Community in employee communities. - opportunities to start and grow their online
Engagement Food Security: Partners with businesses, thus fostering local economic
food banks and donate growth and community engagement.
millions of meals to
communities in need.

- Health and Safety:

Significant investments in
ensuring worker health and
safety, including robust
Provides training and development resources
measures during the COVID-
Employee Welfare to help users enhance their business skills and
19 pandemic. - Career Choice
overall professional growth.
Program: Offers tuition
support for employees to
pursue courses in high-
demand fields.
 - Supply Chain
Responsibility:
Enforces standards for
fair labor practices
and environmental Focuses on transparent interactions
stewardship across its by facilitating direct engagement
supply chain. - between sellers and customers,
Ethical Practices
Diversity, Equity, and thereby promoting trust and ethical
Inclusion (DEI): business practices within the
Initiatives to increase platform ecosystem.
workforce diversity,
though some
programs have been
scaled back recently.
Amazon's Customer Definition

The center of all its activities and

decisions.
Amazon's customers include not only
those who purchase directly from its
website but also businesses, service
providers, and users of other Amazon
products and services.
Amazon has maintained and grown its large
customer base through a variety of
strategies and methods.
Excellent customer experience
Fast delivery
Competitive pricing policy
Wide range of products and services
Continuous innovation
 Amazon’s customer retention Droppii's customer retention
Criteria
strategies strategies

- Uses AI and big data to provide

personalized product - Focuses on creating a tailored
recommendations, offers, and targeted experience for both shoppers and
Personalization marketing. business partners by providing
- Customizes the shopping experience relevant product recommendations
based on user behavior and and business support.
preferences.

- Amazon Prime: A subscription-based

- Implements loyalty programs with
loyalty program offering free shipping,
attractive benefits to encourage
exclusive deals, and access to
Membership & loyalty repeat purchases.
streaming services.
- Provides incentives for both
- Encourages frequent purchases and
shoppers and sellers.
long-term customer retention.
 Amazon’s customer retention Droppii's customer retention
Criteria
strategies strategies

- Offers 24/7 customer support with

fast issue resolution and easy return - Provides excellent customer
policies. experience, continuously improving
Customer service
- Prioritizes customer satisfaction, platform usability and service
ensuring seamless problem-solving. quality.

- Uses dynamic pricing strategies, AI- - Offers affordable pricing and

Competitive pricing driven price adjustments, and flash promotions to attract and retain
sales to stay competitive. customers.

- Uses FOMO strategies, limited-time

deals, and personalized emails to keep - Engages customers through social
Customer customers engaged. media, personalized marketing, and
engagement - Active on multiple channels, including direct interactions between sellers
app notifications, social media, and and buyers.
emails.
 Amazon’s customer retention Droppii's customer retention
Criteria
strategies strategies

- Invests heavily in AI, machine learning,

and automation to improve customer - Focuses on e-commerce
Innovation & experience. technology, continuously improving
technology - Innovations like Alexa, cashier-less logistics, payment solutions, and
stores, and drone deliveries enhance seller support tools.
engagement.

- Ensures a seamless shopping

- Ensures consistent value by
Consistency & experience with reliable delivery,
providing high-quality products and
reliability consistent product quality, and easy
business opportunities for sellers.
returns.
AMAZON'S SUPPLIERS
Amazon's suppliers can be divided into
three main categories:
First-party (1P) suppliers
Third-party (3P) sellers
Private-label suppliers
The ways Amazon control its supplies
Strict onboarding processes
Performance metrics
Pricing algorithms
Data transparency
Fulfillment by Amazon (FBA)
Grand Strategy Matrix: Amazon

Strong Competitive Position Weak Competitive Position

Market Penetration (expand Amazon Product Development (enhancing AI

Rapid Market Growth
Prime and international reach) and cloud services)

Retrenchment (cutting
Diversification (Amazon Fresh, AWS,
Slow Market Growth underperforming services like
and private-label products)
Amazon Care)
Grand Strategy Matrix: Droppii

Strong Competitive Position Weak Competitive Position

Strategic Alliances (partnering with Product Development (creating new

Rapid Market Growth
suppliers like Unilever and Vinamilk) dropshipping models)

Market Development (expanding to Retrenchment (cutting high-risk

Slow Market Growth
rural areas) partnerships)
 QSPM for Amazon
Key Strategic
Weight Market Penetration TAS Product Development TAS
Factors

External Factors

Global e-commerce
0.20 4 0.8 3 0.6
growth

Intense
0.15 3 0.45 4 0.6
competition

AI and Big Data

0.15 4 0.6 3 0.45
advances
 Key Strategic
Weight Market Penetration TAS Product Development TAS
Factors

Internal Factors

Strong brand equity 0.20 4 0.8 3 0.6

Financial resources 0.10 4 0.4 4 0.4

Global logistics
0.20 5 1.0 3 0.6
network

Total 1.00 4.05 3.25

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