Strategic Case Study: Amazon

Thèmes abordés

VRin model, KSF

Résumé du document

Since its creation in 1995, Amazon has become an international brand. The company is actually one of the most recognized brands in the world and was the number one global online service in 2003. It was first a online seller of books then it progressively diversified to selling music, movies, electronic goods etc. Thanks to its creator, Jeff Bezos, Amazon was an early exploiter of online technologies for e-commerce which made it one of the first online retailers in the world. Indeed, he was a precursor and came up with "the statistics of the electronic world, known as the World Wide Web, that it would grow at the incredible rate of 2,300 per cent monthly". Obviously, Bezos was totally right.

Amazon's success was built on one main strategy in use since 1995, a strategy centered on customers by constantly improving innovations on its website. Amazon's customers can find anything they want online due to the biggest collection of goods and services and the lower prices of the market. Amazon is also well known as being "the Wal-Mart of the internet", it wants to provide all things to all people.
The "one click order" processing made Amazon the favorite customer website (awarded in 2002 for receiving the higher score ever recorded in customer satisfaction from the American Customer Satisfaction Index). The company is famous all around the world, thanks to different websites in several countries. With the advantages it has to be number one in the market and with the high level of innovations it provides, Amazon is now benefiting from a very important amount of repeat purchasing online; customers, once they use the website, they usually use it again and again which gives Amazon a very good position in the market. This customer loyalty and the capacity to reach a huge worldwide audience has made Amazon one of the main actors of online businesses.

Extraits

[...] They have invented many new features to help consumers to buy items online. These innovations can be concerned as rare advantages in VRIN model. These innovations have also elements of causal ambiguity, meaning that competitors have been unable to detect how Amazon has used its competencies for competitive advance. These innovations have been possible to implement with help of Amazon's strong partnership network and technical knowhow of employees. Amazon the first who invented many things we think now as a normal in Internet shops. [...]

[...] One of the strategy of Amazon is to offer the “world's biggest collection of goods and services where customers can find and buy anything they want online” 648). Amazon is also providing “hard-to-find” books and music. Low prices : Until 1995 Amazon is offering low prices to its customers. For example, in 1997, “Amazon.com lowered prices even further [ Hardcovers had at least 30 per cent off, paperbacks at least 20 per cent off, while specially featured books were up to 40 per cent 650). [...]

[...] Entertainment and culture provider. Traditional bookstores, library, movies theaters, DVD rentals stores, all those places are for Amazon.com competitors as well. It seems really important to take in to account those places which provide a direct contact with customers. Indeed, today some people care to help little small shopkeepers to make their store profitable. These days, internet is very powerful which is sometimes negative for little businesses, and it seems common for some people to fight against that and continue to buy CD and books to their corner bookstore. [...]

[...] Same year Jeffrey A. Wilke joined the management team as Vice President-General Manager of Operations, former Vice President and General Manager of AlliedSignal's Pharma. Third naming for the management team was Joseph Galli Jr, named as President and Chief Operating officer. In 2000 management was strengthened by few new namings. Paul Misener was named as Cive President of Global Public Policy. He was a partner of a law firm and chairman of the e-commerce and Internet practive group. Another new naming was Diego Piacentini's naming as Senior Vice President and General Manager (International). [...]

[...] Critical mass: Amazon hit critical mass in its market. That means they have enough customers and market share to be profitable Carry out an analysis of Amazon's resources and competences. (Use VRIN model) For this part of our analysis we will analyze Amazon's resources and use VRIN model to find out how Amazon's resources are more than just part of strategic capability. The basic idea of VRIN model is that a firm has different resources; these resources are bundled together to form strategic capabilities and only the most important of these capabilities can be identified as core competencies. [...]