Amazon’s Marketing Strategy Essay

AbstractThe purpose of this paper is to evaluate the commercialiseing move of online retailer amazon.com, Inc. Amazon.com provides a number of retail services as swell up as web and memory board services. The collective strategy framework, as discussed in Cravens & Piercys Strategic Marketing text, forget be use to examine the background of the order and define its current position. The corporal framework includes the fol infinitesimaling (1) incorporate mountain (2) corporate objectives toward vision (3) resources (4) business composition and (5) business design. The change strategy of the company depart be reviewed using Cravens & Piercys suggested grocery store strategy process. To assess the current marketing problems and opportunities, this paper takes a at hand(predicate) look at the companys current SWOT analysis, provided by GlobalData. In addition, strategic recommendations will be make for the companys prolonged growth.Amazon Inc.A companys market driven s trategy mandates more effective integration of activities and processes that impact node respect (Cravens & Piercy, 2009). As well as a consistent market driven strategy, an composition must be creative and ripe in order to compete in the global marketplace. Amazon, Inc. has developed an inventive marketing strategy by the use of the Internet. By becoming pi aceers in the e-commerce marketplace, the company has transformed retail. Amazon Inc. should evaluate their corporate and marketing strategies to make use of all available resources. The company has experienced some marketing failures but send word compose take advantage of existing marketing opportunities. In the 9th Edition of the text Strategic Marketing, Cravens & Piercy write, corporate strategies are concerned with how the company can achieve its growth objectives in current or newly business areas (Cravens & Piercy, 2009). When building the framework for a competitive corporate strategy, an organization must comm encement conclude the corporate vision. During the summer of 1994, Internet usage showed promising growth.A reported statistic of 2,300% yearly growth further Jeff Bezos, then Senior Vice President for D.E. Shaw & Co., to quit his job and concentrate on a room to gainfully use this information. His long term vision for his company was to revolutionize retail by creating the grounds biggest online retail store, where everyone could buy anything and everything (Kargar, 2003). To achieve this goal, Bezos conducted market research that led him to Seattle and directed him to choose selling books online as his main focus. The company was launched in 1995 and by the first quarter of 1996 reported sales revenues of $one hundred ten million. The company soon changed from a virtual bookstore into a virtual marketplace by entry new markets that included music, movies, electronics, toys, apparel, grocery and others. Years later in 2006 Amazon.com had become what some called a modelling of the next-generation Internet-based business (Isckia, 2009).That same year the company introduced their new endeavor, Elastic Compute Cloud (EC2), that offered cheap computation power over the Internet. Many believed Bezos unconventional wisdom took the company further away from its core vision. However, a closer examination of Bezos creative mindset reveals more of the organizations well developed corporate philosophy and structure. Moving beyond book selling, the launch of EC2 and Simple Storage Service (S3) are examples of achievements towards the corporate vision. Amazon has been able to implement objectives in the areas of product quality improvement and new-product targets. Cravens and Piercy note that a hear strategy issue is matching capabilities to market opportunities (Cravens & Piercy, 2009). Transforming Amazon.com into more than just a retail operation has precondition the organization the cap office to compete in different markets, provide significant valued to end d rug user customers, and create barriers to competitor duplication (Cravens & Piercy. 2009).With Bezos continuous investments in new technological initiatives, investors were concerned about Amazons increasing debt and profitability. Kargar reports, the company had a weak balance sheet and massive negative operational cash flow (Kargar, 2004). Throughout the companys financial history there perplex been legion(predicate) monetary losses. According to Robert D. Hoff and Heather Green, in 2002, the company still carried $2.2 billion in long-term debt (Business Week, 2002). In international Journal of Cases in Electronic Commerce, Pauline Ratnasingham reports that Amazon.com shareholders lost 80% of their value in 2000 (Ratnasingham, 2006). though sales increase rapidly, losses continue to soar as well. Despite the financial failures, in 2006 Bezos still believed that his investments would yield big payoffs in later years and that Amazon.com would be a meaningful businessone day (Ho ff, 2006).As Amazon.com continued to expand, the companys strategic business units (SBU) consisted of four key divisions (1) U.S. Books/ melody/DVD/Video (2) U.S. Electronics, Tools, and Kitchen (3) Services and (4) International (Ratnasingham, 2006). This business composition makes it easier to focus on separate precise strategies for each unit. The companys business model also provides a competitive advantage. Amazon benefits from macrocosm able to maintain a virtual store front with distribution centers located in low rent areas. In all, a combination of convenience, speed, reliability, discounted pricing, and a wide selection of merchandise creates a synergistic business design that cannot be easily duplicated. When developing Amazon.coms corporate structure Bezos clearly silent and defined his business strategy. The organization would like a shot need to design and implement a consistent and combine marketing strategy.An important vista of Amazon.coms marketing strategy i s their customer-centric approach. Amazon offers lower prices, free shipping, and customer service available 24/7. Also, the customer experience is enhanced through personalized recommendations and customized web pages. The organizations ability in customer service has been effective in increasing customer loyalty, website traffic, and copy purchases. Amazon.com uses various marketing techniques that include online advertising, email campaigns, and their Associates Program. The Associates Program, which allows outside websites the ability to make products available to Amazon customers, has prove to be very successful. In 2001 over 700,000 associates were registered for the program. This marketing tool allowed Amazon.com the ability to expand its market beyond its own website and concentrate on its strength of order fulfillment and distribution (Ratnasingham, 2006).Another key aspect of Amazon.coms marketing strategy is their established strategic relationships with various tradit ional retailers. These alliances enhance the value offerings of customers, let out the company a competitive advantage, and increase the market share for all companies involved. Some of Amazons partnerships include Toys R Us for toys and video games, the Gap for clothing and Drugstore.com for pharmacy items. The company also has terce party arrangements with Target Corporation, Borders Group, Expedia, and others. Amazon profits by providing customers with a diverse array of products while their affiliate are able to use the technology, services, andtools of Amazon.com.A significant detail of any organizations marketing strategy is creativity and innovation. In her article for The Learning Organization, Verna Allee suggests that in order to sustain competitive strength and continue growth Western companies need to build innovation into their cultures and structures as an essential condition for value creation (Allee & Taug, 2006). In 2008, Amazon.com was listed as number 20 in a l ist of the worlds 25 most innovative companies (Cravens & Piercy, 2009). The new service offering of the EC2 and S3 digital utilities moves the company into competitive opportunities indoors the software platform marketplace. Bezos innovation strategy for Amazon.com includes these five following rules1) Measure everything2) Keep development teams small3) Dont be afraid of weird ideas4) Open up to outsiders5) Watch customers, not competitors (Hoff, 2006)Amazon.coms technological advances and Bezos forward-thinking has led the company to create ground-breaking products, such as the Kindle and also compete with shed light on online digital music provider Apple ITunes. By encouraging continued innovation, Amazon can well(p) their place as leaders in Internet-based businesses.Amazon.com is in a position to gain from the various opportunities they have in the e-commerce marketplace. These opportunities include new trends and technological advances. Amazon competes well and has growth i n the digital e-book market thanks to their Kindle product. Amazon can continue to invest in technology to sustain profitability. In general, E-commerce is experiencing growth. Amazon.com is in the position to benefit from this rise. The site currently offers payment security, one-click payments, user-friendly features, and other technologies that new web-based businesses will have to compete with. The company also has the opportunity to expand through strategic alliances and acquisitions. For example, GlobalData reports that Amazon.com acquisition of TouchCo prior this year, is expected to bring about cost reduction in the companys business (GlobalData, 2010).Overall, Amazon.com employs operose marketingstrategies. GlobalData reports that the companys emphasis on marketing can be seen in their change magnitude marketing be in 2009, in comparison with 2008 and 2007 (GlobalData, 2010). However, Amazon.com is faced with some marketing problems. Because the company has a seasonal n ature, more shoppers during the holiday seasons, the number of customers accessing the website at one time could cause system interruptions. This could change to fulfillment issues and a delay in deliveries. Also, Amazon.com faces the threat of traditional retail stores like Wal-Mart or Barnes & Nobles who now have an online component. Amazon.com now has to compete with companies who have greater brand recognition and more customers.The partnerships the company has made also pose a problem. For example, in 2004 Toys R Us bought a case against the company because Toys R Us exclusive items were being sold by competitors through Amazons website. Also the company suffered increased costs because of their alliance with Drugstore.com. To offset the problems and threats faced by the company, Amazon can benefit from the following strategic recommendations. First, during the off-season Amazon can do aggressive promotional campaigns to include discounts for students and partnerships with uni versity and college professors to be the exclusive trafficker for textbooks and suggested reading materials. Also, Amazons fulfillment processes should be evaluated to determine what issues are prevalent during the holiday season.Those issues should be addressed and fulfillment centers should be restructured accordingly. The company should re-evaluate their alliances by doing a cost assessment. By determining which costs are insignificant, expenses can be reduced or eliminated. Through the leadership of Jeff Bezos, Amazon.com continues to be the best and first by thinking outside the box. The company has changed the way consumers shop, the way they read, and the way entrepreneurs run their businesses. Bezos accepts his failures, focuses on what whole kit and continues to support new ideas and hopeful initiatives. An evaluation of their marketing and corporate strategies to assess their failures can allow them the ability to make appropriate use of their opportunities.ReferencesCra vens, D. W., & Piercy, N. F. (2009). Strategic marketing (9th ed.). New York McGraw-Hill. Hoff, R.D. (2006). 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