Such alignment optimizes organizational performance. The rest of the strategies have a supporting role in the computer hardware and software business. Broad differentiation involves unique products sold to a wide variety of customers. Also, this generic competitive strategy is broad in the sense that the company sells its products to various market segments.
Though it started as an online bookstore, its success in its venture spurred it to diversify into selling anything that can be sold online. Further, Amazon has also expanded globally and now operates around the world through a combination of localized portals and globalized delivery and logistics platforms.
The way in which Amazon has leveraged technology as a source of competitive advantage and reaped the benefits of the economies of scale in addition to leveraging the synergies between its internal resources and external drivers has spawned many rivals who aim to imitate and better its business model.
Apart from this, the key themes in this article are that the strategic alternatives that have been presented and recommended must follow the principle of them being complementary and supplementary to its core competencies. Finally, this article also suggests that Amazon must target the growing mobile commerce segment if it has to maintain its market leadership position.
This strategy is based on leveraging technological capabilities for business success and following a cost leadership strategy aimed at offering the maximum value for its customers at the lowest price in addition to wrapping its business around the customers wherein they find Amazon to be the go-to portal for their online shopping needs.
Continuing the discussion, the generic business strategy followed by Amazon can be explained using The Ansoff matrix as represented pictorially in the figure above.
Amazon is placed in the Overall Cost Leadership quadrant and its relentless focus on costs is the key to understanding its overall strategy. The specific measures taken by Amazon in pursuit of this strategy include steep discounts for is regular members through the Amazon Prime program, ensuring timely and even express delivery and at times, waiving off the shipping charges, passing on the benefits of avoiding state taxes to the customers thereby lowering the price even further, and an overall strategy based on making the customer experience as seamless and as smooth as possible.
Further, Amazon uses Big Data Analytics as a tool to map consumer behavior. Indeed, Big Data has been embraced to such an extent by the company that it is now in a position to market this as another service offering.
Anyone who has shopped on Amazon encounters a list of recommended products that are picked according to the browsing history and the mapping of their purchases with that of likely purchases in the future.
|Summary and Recommendations: Five Forces Analysis of Walmart Inc.||As the largest online retailer in the world, Amazon proves to be highly competitive, even against giants like Walmart [Read:|
|Introduction||Concept[ edit ] Michael Porter's Three Generic Strategies Porter wrote in that strategy targets either cost leadershipdifferentiationor focus.|
This has meant that Amazon can sense and intuit what consumers want and tailor its strategies accordingly. As mentioned throughout this article, Amazon uses technology to the fullest, which is not surprising considering it is after all an internet-based company.
Further, its focus on cost reduction at the expense of product differentiation means that its products are available on other portals as well and there is no product line that is exclusive or unique to it.
For instance, except for its movies and other digital items, the other product lines are all not in the category of those that provide this gratification to the customers.
Apart from that, its focus on non-retail product lines such as cloud based services means that it is addressing the issue of differentiation as well as its overreliance on cost leadership. Having said that, the need of the hour for Amazon is to sustain its growth rates and maintain the momentum.
Further, a worrying factor for the company is that it has not made profits in many of the quarters over the last three years.
Finally, Amazon needs to adopt a Glocal approach in its international markets wherein it adapts its Global business model with that of its Local delivery and logistics supply chain. This would indeed create a globalized business value chain wherein anyone anywhere can buy products anytime and every time.
In conclusion, the future looks bright for Amazon and if it continues to focus on its core competencies and at the same time expands its global value chain, there is no reason why it cannot maintain its market leadership.Published: Thu, 02 Aug Porter’s Five Forces Analysis and the Strategic Group Analysis.
The aim of this research is to critically evaluate the combination of two business strategy techniques; Porter’s Five Forces Analysis and the Strategic Group Analysis. Coverage of more than 90 per cent was achieved, with a dramatic effect on all three; clusters of cases were often importations.
Immunisation against a common cause of meningitis, Haemophilus influenza type b (Hib), was introduced into the routine programme in and by a national coverage of 95 per cent had been achieved.
Porter's Generic Competitive Strategies (ways of competing) A firm's relative position within its industry determines whether a firm's profitability is above or below the industry average.
The fundamental basis of above average profitability in the long run is sustainable competitive advantage. Jul 01, · Another way of achieving a competitive advantage for companies is through differentiation strategy (Porter, ).
In strategic marketing and management literature, the differentiation strategy has been based on the premise that improved/innovative outputs will translate into greater demand for the business’s outputs (Buzzell and Gale, ).
Porter's Generic Strategies. If the primary determinant of a firm's profitability is the attractiveness of the industry in which it operates, an important secondary determinant is its position within that industry.
Jun 30, · Use of Porter’s () Value Chain Framework Porter’s model of value chain is one of the best known and widely applied models of a company’s value .