the first challenge for Amazon involves their channel expansion, high growth pains, and rapidly

evolving business model.

TRADE OFF OF DIVERSIFYING

what kind of items do you buy from amazon?
acquisition of whole foods

with the expansion of Amazon comes the price of being open to the vulnerabilities of each
expansion. example: asian restaurants that have kbbq, but also sushi. drawbacks: take more time
for sushi, ingredients may not be fresh etc.

ABILITY TO MANAGE GROWTH EFFECTIVELY

expansion affects management, systems, financial resources and control, and reporting
functions. not being able to manage growth can lead to bad reputation (amazon leader) and
limitation of growth.

KEEPING UP WITH TECHNOLOGY

how can this be a challenge? whole phone touch screens vs old phones. smart homes,
advancement of technology at fast pace

SOLUTIONS
digitizing real world experience: entice people with new technology in stores. first thing you
want is to catch attention.

mobile-first commerce: updating checkout processes, cleaning up mobile-friendly websites

the second challenge for Amazon are the risks of international expansion.

RISKS FOR SUCCESS include little to no marketing experience in new markets. cost of
developing/maintaining international websites.

must also consider economic and political conditions: international regulations, cultural
differences, NET NEUTRALITY

SOLUTIONS
multilingual chatbots: easy to program, important for international development

onmi-channel ecommerce: multi-channel approach - brick and mortar, online shopping: Amazon
Books 2015, Amazon Go 2018 (cashierless grocery store)

niche markets/d2c brans: creating new brands so Amazon doesn't cast shadows. identity and
target are important when expanding

third challenge for Amazon is optimization of data fulfillment

wrong prediction of customer demand and use of data centre is can lead to increased costs,
impairment charges
optimized inventory can lead to cost cuts like shipping, better relationships with shipping
companies

SOLUTIONS

automation in ecommerce: using technology to streamline processes involving sales, marketing,

inventory management, production/delivery services

delivery options: speed and efficiency are important: same day orders. optimization of supply
chain to devop delivery options

Amazon's key objective and strategies

generic strategy used to develop business in online retail market, create competitive advantage
vs walmart. intensive strategy used for business growth/expansion

Generic Strategy

amazon uses cost strategy as generic strategy with minimization of operational costs and price
levels as main focus. example: using advanced networking technology for operation efficiency,
leading to minimized cost. supports fulfillment of mission statement with keeping costs
affordable for customers

strategic objective directly involving this strategy is the improvement of their information
technology infrastructure, which helps to optimize IT resource performance

intensive strategy

MARKET DEVELOPMENT
current primary intensive growth strategy
entry and growth in new markets is focus, adding new countries for services offered
strategic objective: establish online retail websites for these new countries

MARKET PENETRATION
secondary intensive growth strategy - was responsible for initial rapid growth
different from development because it focuses on revenues from currently existing markets
strategic objective: implement aggressive marketing campaign to attract online customers

next two are supporting strategies

PRODUCT DEVELOPMENT
offering new products to gain higher revenue
low-cost business processes provided by generic strategy leads to new products: AmazonBasics
products (amazon brand), Amazon Web Services (cloud computing)
strategic objective: increase research and development investment to keep developing new
products

DIVERSIFICATION
least significant strategy focused on growth of new businesses, with expansion and diversifying
businesses based on acquisition
strategic objective: aggresive acquisition strategy