Strategy of Amazon Company - Business Plan Example

AMAZON BUSINESS PLAN

Business Description

Amazon is considered to be one of the largest internet retailing organizations in the world. Its main operations of the company include selling books, electronics, and other merchandised from all over the world. It is known for its cheaper prices for the items that it sells and has the expertise that ensures that the needs of the customers are met all the time. Amazon has been on the market for many years and has seen great success. Its success is mainly because it takes advantage of technology to market itself, more specifically, it uses its website. However, the company faces continuous competition from other companies such as eBay and it has become vital for it to be innovative and constantly come up with new products and services that will help it maintain its competitiveness.

Marketing Strategy

Planning is considered to be vital in any business. On the other hand, plans start with an analysis of the company’s internal and external environments. The analysis is vital in terms of helping the business in determining the existing strengths, capabilities, and resources as compared to those of its customers. In addition, the analysis also helps the company in determining the vision, objectives, strategies, mission, and goals in key areas. One area that benefits from the situational review is designing an effective marketing strategy that aims at helping the company in achieving the set marketing objectives. A marketing strategy is a vital component in the overall business strategy because it helps in gaining a competitive advantage through the process of differentiating the products and also aligning the marketing activities with the mission of the company.

The best marketing strategies that Amazon can use to market the product is the use of social media. The platform can be used to post the products and information that relates to the products. The platform will help in posting anything that is useful and relevant, that would help the audience learn more about the company and the product being offered. New customers will also have the opportunity to gain information about the industry which Amazon is operating in. Direct messages on platforms such as Twitter and Instagram can be used to reach customers who might be looking for the product.

The next marketing strategy that can be used by the company is leveraging influencers who can attract the right audience to try the products that are being developed by the company (Strydom, 2007). The influencers need to be associated with the company’s niche so that they can be in a position to target the right audience and also be able to spread the message to the right consumer base.

The use of email marketing sequences is another effective marketing strategy that would be used by the company in this business plan. It involves the use of automated messages that would go out to the users who have subscribed to the company’s list. In this case, Amazon is a well-developed company that has current customers who are expected to already be in the company’s contact list. The use of email sequence will help the company inform the customers about the new product. In addition, the method is generally effective in terms of building a good relationship with the customers, thus ensuring that they remain loyal. However, to ensure that the strategy is effective, the company will ensure that it is transparent and authentic. In addition, quick response to customers’ queries is also vital in making sure that the strategy is effective.

Evidently, having a marketing strategy is vital in making sure that the company is able to achieve is marketing objectives that mainly include creating awareness and differentiating itself from the other companies that operate in the same industry such as eBay.

Legal Strategies

When developing a business plan, it is vital to analyze the legal aspects that can affect the company in the future as it operates. The first strategy is identifying the business form so as to be able to determine other laws that apply to the company. In this case, Amazon is a business that has already been established and thus has established itself as a corporation. It means that it is a business entity which is owned by a group of individuals. As a corporation, Amazon has responsibilities and rights just like people. Therefore it can be liable in law just as an individual can.

The next legal strategy related to contracts with other parties. Considering the fact that the company will be trading with various people, it will be vital that it makes clear arrangements with stakeholders such as customers and suppliers to avoid any breach of contract (Nieuwenhuizen, 2007).

Employment law is also vital for the company to consider and come up with strategies that will make sure that it is in compliance with laws that are related to employment. Employment law often governs the relationship that is between the employer and the employee and is considered to be a key component in any business. The company will abide by the employment laws by coming up with policies that aim at protecting the workers from various kinds of discrimination. The law will also guide the company in situations that would justify the dismissal of employees. Employment law is vital for the company because failure to abide by them can result in legal liability and will have negative effects on the company’s brand as a good employer.

Insurance is another legal strategy that will be considered by the company. Just like other business, Amazon is likely to face risks. Insurance provides the necessary protection against the risks that the business is likely to face. Insurance would help in securing the progression and growth of the business. The principle behind business insurance is to plan ahead and manage destructive risks, even if they may never happen. Insurance will be good for the company to avoid losses.

The next legal strategy is the IP strategy which is the game-plan of the business. The IP strategy is vital because it is something that the business can rely on during the planning process. The specific categories of intellect actual property that is considered for the business include patents where the company needs to register the idea that is behind the new product with the government. In this case, the business will gain the legal right that will exclude other people and companies from marketing and manufacturing the product. The next category is the trademark which in this case is the name and symbol of the company because they will be associated with the new product. The trademark of the company often connects the brand with the high level of quality on which the business can further build a reputation. Finally, trade secrets include pattern, a formula, and compilation of data that aims at providing the company an advantage over the competitors. Data on the new product is evidently a trade secret because it adds value to the company in terms of helping to improve the profits of the company. In addition, appropriate measures that are aimed at safeguarding the secret have been put in place in terms of restricting the knowledge about the product to some executive.

Product and Service Planning

Currently, Amazon provides its customers with different kinds of products and services. An analysis of the company indicates that the services provided include music, video, and home improvements. The company also provides its customers with other services that include enabling users to search for information and books that relate to the products that it provides (Bausch, 2003). Apart from the services which the company provides, the products that the company provides include electronics, retail goods, video, artworks, games, and digital content. Considering the products and services provided, it is also crucial to analyze the competitors in the industry that it operates in.

Amazon operates in three main segments that include electronics, media, and other merchandise. In the media segment, the company mainly competes with auction sites eBay, Google with its Play Store, Apple with iTunes, Time Warner Cable, Netflix, and Liberty Interactive. In the electronic and the general merchandise segment, the company has several rivals who include Family Dollar, Target, Sears, Delia, Systems, Best Buy, RadioShack, Big Lots, and Staples. The online competitors in the same segment include LightInTheBox Holding Co, Zulily, Alibaba Group, PCM, JD.com, Wayfair Inc, Overstock.com, and Vipshop Holdings. The main competitors in other operating segments include Citrix Systems, salesforce.com, CDW, Insight Enterprises, Accenture, Google, and PC Connection.

Analyzing the competitors is vital while planning for the product as service. The process will include the following phases;

Developing the Product and Service Concept

The first step that will be undertaken by the company includes creating ideas for the new product and services based on an overview of the market that provides an idea of the problems among consumers. The problems can be considered to be the needs of consumers that need to be satisfied (Hill, 2009). To better understand the problems, a detailed analysis of the market was conducted.

Studying the Market

The next step involves further studying the market by studying the competitors that mainly include eBay because of the fact that it operates online. Having an understanding of the needs of consumers and also understanding the competitors and their products and services is vital. It helps in making sure that the new product is able to meet the needs of customers and at the same time that it is unique enough to be differentiated from other products and services that are being provided by competitors. However, further analysis on the market is vital to determine its acceptability.

Market Research

A market research involves a quantitative and qualitative research of the market with the aim of understanding the acceptability of the new product and service in the market (Ochtel, 2009). The process is vital because it assures the company that it is targeting the right market that will ensure that there is profitability. Once there is assurance that the right target market has been chosen, the next step is the introduction of the new product and service.

The Introduction of the New Product and Service

The introduction of the new product and service will start by selling new inventions on a small scale to be sure that it would be accepted by the customer and that it will eventually help the company succeed.

The Product Life Cycle

Ever product and service go through the product lifecycle from the initial stage to the completion of the cycle. During the growth stage of the cycle, the sales are often the highest (Pride, 2010). An increased success in this stage often attracts competitors who would want to copy the specifications of the product so that they can also get the profits (Jain, 1999). For this reason, the company needs to keep analyzing the market so that it can be able to differentiate the product. It can also reduce its prices so as to maintain the current customers and also attract new customers.

Technology Analysis

Including technology strategies in the business plan will be vital in running the company more competitively. It is vital to note that technology keeps on advancing and thus it was crucial to conduct a cost-benefit analysis. From the analysis, the costs of using technology in the company include security issue and a high initial cost. However, considering the fact that Amazon’s operations are reliant on technology in the fact that it operates from its website then the benefits of using technology are more than the costs.

The main technology that the company uses and will continue using the new product is the internet resources. The business will use the internet to market the product. Apart from using the Amazon website, Facebook and Twitter will be utilized. In this situation, the company already has the advantage of having a developed website that has a domain name. The website has the products and services that the company already provides, and adding the new product and services will be accessible to the current and new customers. In addition, the company will take advantage of directory listings, and more online advertising to solidify the company’s online presence. Generally, technology strategy can help to track the marketing effectiveness of the company and be able to make any changes needed so as to remain competitive.

Apart from having the technology, it is also vital to have a technology growth strategy to make sure that the technology being used is in line with the technological advancements to improve efficiency.

Human Resource Planning

Amazon.com is currently one of the largest online retailers around the world that sells products and services to customers from every region and then ships to them. It means that it is considered to be a leader in a market that is very competitive. However, its good performance is mainly as a result of its human resource planning process (Rothwell, 2003). Employees appreciate the fact that they have a great responsibility to help the company perform well and remain competitive in the market through the research and development, and operation process (Bramham, 2000). However, considering the fact that the company aims at introducing a new product and service, it is vital for it to go through the human resource planning process to get the right human resources, who are currently not in the company.

Current Staff

The company currently has who operate in different areas of the company mainly packaging, communication, and warehousing. Employees who work in these areas ensure the success of the company and the success of the new product and service will require the company to look at its current database (Rothwell, 2003). The process will compare the current skills that are available in the company and the requirements for the success of the new product and service. The gap between the two will be the human resources needs of the company. In addition, if the skills can be found internally in the company then people can be employed internally. Otherwise, the company will need to look for employees who have the required skills externally through the process of recruitment and selection (Reddy, 2005).

Skills needed

The skills needed for the success of the new product include an internet specialist who will mainly concentrate on promoting the company’s website on the internet through different methods that include Newsgroups and Internet Classified Ads (Reilly, 1996). The specialist will also assist in designing promotional advertisements and communicating online with customers. The analysis of the current staff shows that the company already has employees in the communication sector and thus will save expenses required to get the skills externally. The skills are vital for the company in terms of promoting and creating awareness of the new product and service (Bhattacharyya, 2006).  

Strategy Implementation

The implementation of the strategy is expected to be implemented in a period of one year after which the product is expected to have gained a substantive market share to ensure its sustainability in the future. To complete the strategy, there are initial costs that are expected to be attracted by the company which is regarded as the pre-operational costs (Appendix I).

Base on the recent financial statements of the company as seen in Appendix II, the revenues of the company has improved over the last three years. The profits have also improved over the years, thus, from the implementation of the strategy, the company estimates to get high revenues and profits. The profits from the new product and service will be used to expand the operations of the company; it will also be used to pay employees who are attached to the products and services and will help the company in advancing its marketing and promotion efforts to further attract more customers to purchase the product. Finally, the profits will be used to improve the general conditions of the company to ensure that employees are motivated towards achieving the objectives of the company.

Conclusion

Amazon is one of the biggest companies that deal with online marketing and sales. However, it needs to constantly come up with new products and services aimed at meeting the needs of the customers and to help it maintain its competitiveness considering the fact that I face intense rivalry from companies such as eBay. Therefore, it is vital for the company to implement this business plan.