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Week 8 assignment 3Final
business administration (bus 499)
Maseno University
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Week 8 Assignment 3 Student’s Name: University Affiliation: BUS499 Business Administration Capstone Prof’s Name: Date of submission:
Week 8 Assignment 3 Introduction Currently, the duplication of business and corporate strategies has necessitated online retail businesses such as Amazon, Inc. to create unique and continuously dynamic plans. The firm has an overarching objective: to earn an income and generate returns for stockholders. This paper addresses the most appropriate business strategy an applied by Amazon, Inc. marketing department to acquire a client base and retail their products at a profit. In addition, the analysis also evaluates the corporate strategy as applied in the achievement of secondary goals such as growth and integration of service offerings. Also addressed is the evaluation of the competitive strategies between Amazon, Inc., and Alibaba and determine the superior strategic plans and implementation. Finally, the paper addresses the different approaches to slow-cycle and fast-cycle markets for the most competitive firm. Business-Level Strategies Business-level strategy emphases on how to reach and gratify clients provide products and services that meet their desires, and raise operational profits. In order to perform this function, a business-level approach concentrates on placing itself against other players and keeping up with the market trends in terms of demand variations. Amazon business-level approach can be termed as extreme cost-leadership (1). The international online store functions with a small return margin and prospers owing to a mixture of economies of scale, the invention of several commercial procedures and continuous trade expansion. Amazon business strategy is directed by four philosophies: client fixation instead of rivalry emphasis, desire for innovation, commitment to operating superiority, and long-term philosophy (2). The above philosophies forge a perfect blend of strategy and competency abilities leading to better overall performance.
Corporate-Level Strategies Corporate-level strategy refers to strategic plans implemented by a firm with a broader view on the success of the business activities. A corporate-level strategy is employed to aid in the increment of competitive advantage over the major competitors and to remain the top provider of inimitable manufactured goods or service to customers (1). The corporate-level strategy adopted by the Amazon, Inc. is the Mergers and Acquisitions aimed at maximizing growth through diversifying service offerings. According to the firm Chief Executive Officer, Jeff Bezos, the company makes small profit margins on each product they sell and as such, diversifying their service offering is a major booster for both growth and improving profit margins (2). Founded on Amazon's aggressive development through an enormous selection of capacities of commercial activities, it appears possible that the corporation will carry on with the acquisitions of other firms in the future. What is hard to predict, however, is which spaces Amazon will concentrate on during other subsequent acquisitions and mergers. The main objective of the acquisitions is to expand the services offered by the firm. For instance, Amazon acquired Whole Foods Market for approximately $14 billion. Whole Foods has been expanding tremendously and remains the only USDA Licensed Organic Grocery in all the states in the US. Whole Foods had a market cap of approximately $9 billion immediately before Amazon acquired it. Subsequently, Amazon has denigrated some strategic foodstuffs and has incorporated features of the Prime Service as part of Whole Foods client involvement. For the last quarter of 2018, the period directly after Amazon's purchase the company, Amazon gained returns of nearly $5 billion from unit stocks (2). This amount is principally a replication of
Whole Foods' gross profits. However, Amazon has other acquisitions including Ring ($ billion), Zappos ($1 billion), PillPack, Inc. ($1 billion), among others. The corporations itemized above are just a few of Amazon's several purchases over time. Amazon made several of those acquisitions in 2017 and; in addition to Whole Foods, Amazon purchased at least ten other corporations. In recent times, the corporation has acquired CloudEndure, a cloud database developing corporation. In 2015, Amazon acquired a chip manufacturer Annapurna Labs, amongst additional businesses with varying service delivery. Other prominent purchases include Goodreads, Alexa Internet, and the Internet Movie Database (IMDb). In particular, Alexa has significantly improved on the customer service through its voice aid on the website interface. In addition, through the mergers and acquisitions, the firm has maintained dominance, especially with the additional service delivery such as cloud-computing outsourcing services, and also professional promotional services (4). Consequently, in my view, the corporate-level strategies have aided the firm in maintaining high growth, unlike the competitors. Remarkably, for the financial year 2018, the corporation filed and reported revenue of nearly $240 billion. This level of return signifies the growth of at least 30% from 2017. Competitive Environment Market Commonality Alibaba, being the highest competitor in the international market and online retailing, has a unique market for their services. Its market is very common as the one targeted by Amazon, especially in the retailing service offerings (1). However, Amazon, Inc. has continuously diversified and introduced new services to the market, such as cloud computing and
competition by innovation and acquisition of other firms. Through the application of the technology and acquisition of companies worldwide, Amazon remains the most competitive firm in terms of growth and collection of revenue. In particular, one of the only drawbacks by Amazon in the competitive environment is the failure to accommodate more locations, especially in the developing economies. In these areas, the firm loses a lot of revenue to the competitors (3). Conversely, in light of the above mentioned competitive strategies and investments, Amazon, Inc. will remain successful both in the long-run and the short-run. Also, the corporation will continue to experience massive growth in revenue collection. Market Cycles Slow-cycle markets are markets in which the company’s competitive benefits are safeguarded from imitation usually for lengthy periods and where duplication is expensive (1). On the other hand, fast-cycle markets are markets in which the company’s abilities that back to competitive benefits are not safeguarded from imitation and where duplication is regularly quick and cheap (1). Amazon, Inc. would differ significantly in both the first-cycle and slow- cycle markets. Notably, in the slows-cycle market, the underlying competitive forces are frequently concentrated on competitive activities and reactions that allow organizations to guard, preserve, and spread their competitive benefits. Main tactical activities in the markets will include, acquisitions, which in most cases are less risky (4). On the other hand, in the fast-cycle markets, the main emphasis is to concentrate on gaining knowledge on actions which would swiftly and constantly improve new competitive benefits that are better to those they substitute. The reason for the difference is due to the fact that in the online retail business, most of the competitive strategies and competitive advantages
are highly imitable by other firms (3). Also, to avoid these kinds of disadvantages, Amazon Inc. has continuously implemented other development, which may be harder to imitate.
Week 8 assignment 3Final
Course: business administration (bus 499)
University: Maseno University
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