Introduction
Amazon Corporation is a household name, thanks to the strategic decisions of the firm that enhance strategic competitiveness. This paper is going to explore how globalization and technology impact the strategic competitiveness of Amazon Corporation, the application of the resource based and industrial organization models to establish how amazon can earn above-average returns, as well as the influence of stakeholders, mission and vision towards the overall success of the firm.
Globalization
The world is now referred to as a global village because businesses can conduct businesses anywhere and at any time. Globalization breaks down the barriers of time and distance. With globalization, firms from one region are able to open up shop in another country. However, globalization comes with positive and negative impacts. Amazon is a global firm and is not immune to these impacts. Amazon’s profitability, reputation, sales and expansion is negatively affected by various elements of globalization. Since amazon is an online retailer, it accepts payments through a variety of methods such as debit and credit cards, gift cards, checks, consumer invoicing among others. These methods of payments subjects amazon to risks, which further subjects the company to additional regulations and compliance requirements that increase operating costs and lower profitability. Amazon faces foreign exchange foreign risks because intercompany balances associated with its product offerings is exposed to foreign exchange rate fluctuations. Globalization also exposes amazon to geopolitical events such as war and terrorism.
Amazon could also be affected by loss of data and other security gaps because it collects, processes, stores and transmits huge amounts of data. Amazon deals with sensitive and confidential, commercial and personal information. Failure to mitigate data loss, theft, misappropriation and other safety gaps could uncover amazon’s customers to risk of loss, result in legal action, government interventions, and possible liability for the firm.in the present information age, information is a precious resource and cybercriminals may hack into amazon’s system and steal customers’ data. That can be detrimental to the reputation of the corporation as customers will lose confidence in amazon and giving their personal details for payment processing.
Technology
Amazon is founded on technology and its operations are about technology. The advancement in technology and the growth of the World Wide Web are the foundation of amazon. Technological innovation is at the heart of amazon’s operations. There are various ways in which technology has impacted amazon such as through the use of automation and robotics. Amazon has automated most of its services and it is possible or a customer to start the purchase process without interacting with an employee as services is automated. In the warehouses, robots are used for loading and offloading shelves. One of the most notable concerns for amazon’s use of robotics is the use of amazon drone delivery whereby robots are used for delivery with as minimal time as possible. Delivery to amazon prime customers takes minutes, which comes in handy in the new normal whereby movement remains constrained as government takes measures to curb the spread of covid-19.
Social media has also played a crucial role in influencing amazon’s success as users exchange their experience with amazon on different social media platforms. Apart from users sharing their experiences, amazon uses social sites like Facebook and Google AdSense to promote its brand.
Industrial organization model
Hitt, Ireland, & Hoskisson highlight that firms can evaluate their external environment to earn above returns. The first step entails exploring the external environment such as competitors to identify an opportunity. Amazon operates in many industries but the ecommerce industry is full of competitors such as Alibaba, eBay, and Walmart among others. Amazon can decide to invest in an attractive industry. The second step is to identify an attractive industry which has the potential to earn above average returns. For instance, amazon may opt to have a physical presence in African countries where it is not present. The third step is acquiring resources and assets to implement the selected strategy. Amazon has the necessary asset and resources, both tangible and intangible necessary to venture the African market. The fourth step is the utilization of the resources and assets to implement the identified strategy. Amazon should use this step to set up shop in markets that are fast growing such as Malawi, Ethiopia, Lesotho and Kenya. The final step is to make the strategy to spread the entire organizational culture. Once the strategy has been operationalized, the corporation can go ahead and popularize its culture in the new industries.
Resource based model
Hitt, Ireland, & Hoskisson (1) highlight that organizations possess resources that are rare, valuable, and non-imitable and non-substitutable. Combinations of these resources give competitive advantage to a firm and enable them earn above average returns. In the case of amazon, the strategy to invest in African countries may be actualized from the various resources that amazon possesses. For instance, amazon has market knowledge given that it has been in operations since 1994. The company can profile customers depending with their income and shopping behaviors. Secondly, amazon possesses financial resources that it can use to actualize its strategy. Thirdly, amazon has a reputable brand name, which will make marketing easier. Suppliers in the new market would also be willing to supply to amazon given that amazon has a valuable resource of strong relationship with suppliers. Amazon operates on non-imitable model of cost leadership, which it can bring to Africa and revitalize the marketplace with convenience and affordability due to it.
Vision
Amazon ultimate goal is to become the earth’s customer centric company for customers who want to discover and purchase goods online. The vision demonstrates that amazon is a customer centric company. The model of cost leadership seeks to ensure that customers are treated to low prices as a means of retaining. As a result, the strategies implemented revolve around creating convenience for the customers in a bid to make them repeat customers. For instance, amazon prime services are aimed at creating convenience for customers as much as possible and making them loyal customers.
Mission
Amazon mission is about the customer. Just like the vision statement, amazon mission is to be the earth’s most customer centric company. Amazon’s customers are divided into four segments; creators, vendors, enterprises and individual consumers. The mission demonstrates that amazon is determined to cater for its segments by catering to their different needs. While the mission statement of most companies communicates various aspects their position in marketplace, future orientation, self-concept, product, and employees, amazon’s mission is exclusive about the customer. As such, the strategic decisions revolve around the customer.
Stakeholders
Hitt, Ireland, & Hoskisson (1) describe stakeholders as groups of people who may affect the mission and vision of the organization, and who are affected by the strategic outcomes achieved. Stakeholders have enforceable claims in the performance of the organization. The top management is a significant group that is responsible for formulating strategies and overseeing their implementation. Employees are other valuable stakeholders who have reshaped amazon to where it is. Amazon is an industry leader and known for its continuous innovation. The drone delivery technology is an example of disruptive technology by the research and development team.
Customers are an important group of stakeholders that are behind the success of the retail giant. Customers want quality products, protection of their information and expect amazon to be fair in its dealing with their personal information. Supplier groups are the other stakeholder category that has impacted amazon positively. Amazon depends on the diverse group of suppliers to sell goods and services. Amazon does not have products associated with its brand. As such, it relies on suppliers for everything. Suppliers want fair business practices and assurance that amazon will continue buying their products in a manner that is mutually beneficial.
Amazon Corporation is a household name, thanks to the strategic decisions of the firm that enhance strategic competitiveness. This paper is going to explore how globalization and technology impact the strategic competitiveness of Amazon Corporation, the application of the resource based and industrial organization models to establish how amazon can earn above-average returns, as well as the influence of stakeholders, mission and vision towards the overall success of the firm.
Globalization
The world is now referred to as a global village because businesses can conduct businesses anywhere and at any time. Globalization breaks down the barriers of time and distance. With globalization, firms from one region are able to open up shop in another country. However, globalization comes with positive and negative impacts. Amazon is a global firm and is not immune to these impacts. Amazon’s profitability, reputation, sales and expansion is negatively affected by various elements of globalization. Since amazon is an online retailer, it accepts payments through a variety of methods such as debit and credit cards, gift cards, checks, consumer invoicing among others. These methods of payments subjects amazon to risks, which further subjects the company to additional regulations and compliance requirements that increase operating costs and lower profitability. Amazon faces foreign exchange foreign risks because intercompany balances associated with its product offerings is exposed to foreign exchange rate fluctuations. Globalization also exposes amazon to geopolitical events such as war and terrorism.
Amazon could also be affected by loss of data and other security gaps because it collects, processes, stores and transmits huge amounts of data. Amazon deals with sensitive and confidential, commercial and personal information. Failure to mitigate data loss, theft, misappropriation and other safety gaps could uncover amazon’s customers to risk of loss, result in legal action, government interventions, and possible liability for the firm.in the present information age, information is a precious resource and cybercriminals may hack into amazon’s system and steal customers’ data. That can be detrimental to the reputation of the corporation as customers will lose confidence in amazon and giving their personal details for payment processing.
Technology
Amazon is founded on technology and its operations are about technology. The advancement in technology and the growth of the World Wide Web are the foundation of amazon. Technological innovation is at the heart of amazon’s operations. There are various ways in which technology has impacted amazon such as through the use of automation and robotics. Amazon has automated most of its services and it is possible or a customer to start the purchase process without interacting with an employee as services is automated. In the warehouses, robots are used for loading and offloading shelves. One of the most notable concerns for amazon’s use of robotics is the use of amazon drone delivery whereby robots are used for delivery with as minimal time as possible. Delivery to amazon prime customers takes minutes, which comes in handy in the new normal whereby movement remains constrained as government takes measures to curb the spread of covid-19.
Social media has also played a crucial role in influencing amazon’s success as users exchange their experience with amazon on different social media platforms. Apart from users sharing their experiences, amazon uses social sites like Facebook and Google AdSense to promote its brand.
Industrial organization model
Hitt, Ireland, & Hoskisson highlight that firms can evaluate their external environment to earn above returns. The first step entails exploring the external environment such as competitors to identify an opportunity. Amazon operates in many industries but the ecommerce industry is full of competitors such as Alibaba, eBay, and Walmart among others. Amazon can decide to invest in an attractive industry. The second step is to identify an attractive industry which has the potential to earn above average returns. For instance, amazon may opt to have a physical presence in African countries where it is not present. The third step is acquiring resources and assets to implement the selected strategy. Amazon has the necessary asset and resources, both tangible and intangible necessary to venture the African market. The fourth step is the utilization of the resources and assets to implement the identified strategy. Amazon should use this step to set up shop in markets that are fast growing such as Malawi, Ethiopia, Lesotho and Kenya. The final step is to make the strategy to spread the entire organizational culture. Once the strategy has been operationalized, the corporation can go ahead and popularize its culture in the new industries.
Resource based model
Hitt, Ireland, & Hoskisson (1) highlight that organizations possess resources that are rare, valuable, and non-imitable and non-substitutable. Combinations of these resources give competitive advantage to a firm and enable them earn above average returns. In the case of amazon, the strategy to invest in African countries may be actualized from the various resources that amazon possesses. For instance, amazon has market knowledge given that it has been in operations since 1994. The company can profile customers depending with their income and shopping behaviors. Secondly, amazon possesses financial resources that it can use to actualize its strategy. Thirdly, amazon has a reputable brand name, which will make marketing easier. Suppliers in the new market would also be willing to supply to amazon given that amazon has a valuable resource of strong relationship with suppliers. Amazon operates on non-imitable model of cost leadership, which it can bring to Africa and revitalize the marketplace with convenience and affordability due to it.
Vision
Amazon ultimate goal is to become the earth’s customer centric company for customers who want to discover and purchase goods online. The vision demonstrates that amazon is a customer centric company. The model of cost leadership seeks to ensure that customers are treated to low prices as a means of retaining. As a result, the strategies implemented revolve around creating convenience for the customers in a bid to make them repeat customers. For instance, amazon prime services are aimed at creating convenience for customers as much as possible and making them loyal customers.
Mission
Amazon mission is about the customer. Just like the vision statement, amazon mission is to be the earth’s most customer centric company. Amazon’s customers are divided into four segments; creators, vendors, enterprises and individual consumers. The mission demonstrates that amazon is determined to cater for its segments by catering to their different needs. While the mission statement of most companies communicates various aspects their position in marketplace, future orientation, self-concept, product, and employees, amazon’s mission is exclusive about the customer. As such, the strategic decisions revolve around the customer.
Stakeholders
Hitt, Ireland, & Hoskisson (1) describe stakeholders as groups of people who may affect the mission and vision of the organization, and who are affected by the strategic outcomes achieved. Stakeholders have enforceable claims in the performance of the organization. The top management is a significant group that is responsible for formulating strategies and overseeing their implementation. Employees are other valuable stakeholders who have reshaped amazon to where it is. Amazon is an industry leader and known for its continuous innovation. The drone delivery technology is an example of disruptive technology by the research and development team.
Customers are an important group of stakeholders that are behind the success of the retail giant. Customers want quality products, protection of their information and expect amazon to be fair in its dealing with their personal information. Supplier groups are the other stakeholder category that has impacted amazon positively. Amazon depends on the diverse group of suppliers to sell goods and services. Amazon does not have products associated with its brand. As such, it relies on suppliers for everything. Suppliers want fair business practices and assurance that amazon will continue buying their products in a manner that is mutually beneficial.
