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Amazon case study - Coursework Example

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Amazon case study

However, when we evaluate Amazon’s business model and the operational strategies that underlie it they greatly resemble those of its key competitor Barnes & Noble. Barnes & Noble also used its economies of scale to support low-cost leadership, it broke new ground by developing software that would enable its customers personalize their web pages and also enjoy the results of collaborative filtering (Ghemawat 13). The difference in one organization’s choice to use a pure play system while the other uses a brick-and-click system is too simplistic to explain the relative success of Amazon.com over Barnes & Noble. This would be best explained through the dynamic capability. Dynamic capability and its processes Dynamic capability refers to the ability of the firm to purposefully create, extend or modify its resource base so as to achieve congruence with the changing business environment (Menon and Mohanty 3). Of importance to note is the use of the word “purposefully” which negates the element of accident or luck. Dynamic capability involves intent and the emergent stream of activities within an organisation that are taken with a certain implicit aim. Although dynamic capabilities are equifinal and exhibit commonalities across firms, performance differences arise between firms due to both cost and differential timing with which the dynamic capabilities are used (Menon and Mohanty 5). They are path dependent processes thus are idiosyncratic and difficult to imitate. Dynamic capabilities can be a source of competitive advantage. That is why even though Barnes & Noble seem to be following similar operational strategies to Amazon.com, the results are different for each firm. Issues have been raised about the product, geographic and vertical scopes that these two firms are undertaking and as to whether Amazon’s rapid expansion approach will be sustainable in the long run. Dynamic capabilities constitute of first order processes of sensing, learning, reconfiguration, coordination and integration. Sensing reflects the ability of the firm to effectively generate, disseminate and respond to market intelligence on customer needs. It helps the firm understand its environment; identify requirements for market, and opportunity for new resources (Menon and Mohanty 5). Amazon.com always matched and bettered Barnes & Noble (B&N) on price, number of available titles, in forming agreements with other major Internet players, and technology. Other than simply match B&N’s various strategies Amazon.com always seemed to have anticipated the moves and gone further for example whereas B&N broke new ground with personalization of web pages and collaborative filtering, Amazon went further with these technologies. Learning as a capability is the ability to acquire, assimilate, transform and exploit existing knowledge to generate new knowledge (Menon and Mohanty 6). Amazon has instituted a culture of metrics within the firm that it supports through development of necessary tools to be used for analysis and evaluation. Also, in support of learning Amazon has developed a culture of experimentation for examples to test different algorithms for recommendations, new home page design and so on. Reconfiguration involves changing the ...Show more

Summary

Introduction Amazon.com uses pure play strategy as it conducts the sales of its products and services to its customers entirely via the Internet. The pure play strategy enables Amazon to have lower overhead costs in comparison to its major competitors such as Barnes & Noble and Borders which have to contend with extra cost in running physical stores via their brick and click strategy…
Author : ethylhegmann
Amazon case study essay example
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