The company’s positioning and business model * Amazon is the first mover of virtual retail supercenter selling products which started off from selling only books online and also offer the lowest possible prices to its customers. * Thus, Amazon is likely to be seen as a ‘broad differentiator’ who is in the middle of differentiate and cost leaders approaches. * However, it can be seen as more leaning to differentiators as most of its past and current strategies are focusing more on innovation of services to its customers.
For example, Amazon Fresh for grocery, 1-Click Checkout system, cloud computing and storage etc. * Amazon apply the second approach for market segmentation; it recognize the different customer groups and offers as various products as possible to the customers to attracts more sales and gain more market shares. Successful strategies * First mover of IT retailer shop, popular feature on website such as product reviews, rating * 1-Click system, Mix purchase, The Amazon Associate program * Growing to sell music CDs, then electronics products and so on. Avoid distribution and stocking cost strategy: Free shipping deal/promotion, cooperate with B&M companies so buyers can pick up product at B&M stores. * Online services for small to medium business, sell its SOA software services * Zshops for used products, and Amazon Web Service These strategies allowed Amazon to obtain its competitive advantage over its rivals, as it’s a unique and utilize the existing distribution channel and IT services advantages Failure strategies Online auction; lost to eBay and the market trend ( fixed-price market booming) * Unbox, Search engine market (track its customer across WWW) * Amazon Prime and Kindle book reader; lost to Google free online data storage and iPad These failure strategies result in declining in stock prices and investing funds, which can be huge in some of the project ie. Kindle, It can be seen as inefficient move which can be avoid if Amazon had done more planning and market research beforehand.
Recommendations * Amazon should focus more on cost controlling strategy because the persistent issue for Amazon is high value chain cost, such as IT infrastructure cost, innovation investing, and operating cost. * Amazon can also put more effort on proper market research or planning strategy for shareholder interests, as the CEO seem to be having fun to innovate new services and learning from the market responses, either good or bad, he seem to be okay with both as a learning experience.
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