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Amazon Strategic Management

Amazon.com was formed around two decades ago as an online book selling avenue by Jeff Bezos. He was highly motivated by the increasingly opportunities that were being opened by ever expanding internet platform. Though the growth was slow, its market share increased tremendously over the next decade. Bezos, the founder and chief executive used this opportunity to raise more funds and worked towards making Amazon.com a technology company which was his initial aspiration. The company expanded and diversified incorporating sales of new items such as softwares, downloaded music, and electronics among others. It also went global spreading to Europe and Asia (Sadler 2003).

Amazon strategic plan was unconventional because they did not set their goal on making profits on the short term. In fact, investors questioned the rationale behind the strategy because they did not make profit for almost five years of their investment. However, Bezos vision was to capitalize on shortcomings which actually existed on the physical book store in the country. He realized physical stores offered at least ten percent of the books in print at most hence most consumers did not get variety. He therefore visualized an online store where he could offer over one million books which were on print. He noted that for these stores to operate, they spent more in terms of operation costs due to rent of premises and the employees working there. This made him to set his own online store where books were obtained at low prices.

The Amazon.com also made it easier for consumers to search for the books they wanted by simply writing the title or the topic of the books. One of the popular application of the website was the review options where consumers could review the books and recommend them to potential customers. This made them to increase their market share and gave them a voice on the book’s industries (Sadler 2003). Since there were major buyers, they used this advantage to negotiate with publishing companies and other suppliers for lower prices which they transferred to the market making their products even cheaper  hence winning more consumers in the process.

Bezos vision meant that they were the pioneers in the online book selling business. Most of the consumers they captured were thrilled with this strategy because of its convenience in terms of retrieving the books they wanted. The platform also offered numerous books about the same topic giving consumers a chance to make the right choice (Aaker 1995). They could also check previews about the previous customers giving them an insight about the product. This transformed them to loyal customers. It therefore became harder for their competitors like B & M who decided to venture into the online market to woe Amazon customers. Of course the success of Amazon attracted new firms to venture into the business but they did not survive because Amazon had already created a well known brand across the country.

Amazon strategy of recruiting staff and maintaining them gave the company a unique advantage. The company implemented a policy where employees were grouped in small units which were then allowed to work independently without interference from even the management. This led to innovations and improvement of their website. Some of the innovations including the searching options of details in the book gave consumers details about the books they wanted to purchase. When faced with stiff competitions from their rivals they came up with strategies in order to consolidate their markets and maintain their revenues. The employees of Amazon also own a ten percent stake of the company. This acts as incentive and motivation in order to maximize their output.

In order to maintain competitive prices, Amazon also collaborated with other firms especially those that sold their products. The consumers could buy the products from the Amazon and pick them from their local stores (Aaker 1995). This helped to eliminate some shipping cost in some instances cutting the price of their products. They also implemented a philosophy of buying other companies especially those that dealt with technology with the aim of curving itself a market segment of the retail business. This acquisition has made Amazon to diversify its market by selling different varieties of goods. They also buy out competitors which has an advantage of eliminating the competition and at the same time acquiring their customers.

The company also took advantage of the digital advancement by incorporating a downloading equipment to its website. This has led to buying of books in digital and print form at incredibly low prices. It has made the company to consolidate its market share by offering unique services and at the same time being cheap. In fact, this technology of downloading books has become a new phenomenon boosting the Amazon overall revenues. The technology also known as kindle was their major source of income in 2007.

Their strategy to provide platforms for other companies to sell their products using their online stores has also been a major reason for the company’s success. This platform has increased its market share because of its unique feature. It has even opened an avenue for individuals, small business and large corporations to successfully sell their products on line. Their target of targeting every buyer and every seller has actually transferred it from an online bookselling to the largest online store in the world (Sadler 2003).

In summary, we can argue that Amazon has been successful in establishing its devices on the principle of convenience, competitive prices and innovation. This has made it to acquire unique characteristics that have generally wiped out the competition and at the same time consolidating the market. Its ability to diversify its services means it has curved itself a large segment of consumers which has translated to it enormous profits and subsequent brand which is worldwide. With ever expanding use of internet in the world, coupled by an increasing efficiency in terms of conveying information and advertisement, Amazon’s future looks bright despite recent slump in its share value.

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