Strategy Development and Implementation - Amazon - Case Study Example

? Management Competitive Advantage and Creativity A company can gain a competitive advantage, when the profitability of the company is higher when compared to the average profit earned by other competing organisations for a particular set of customers (Mitchell and Coles, 2003). Competitive advantage varies from time to time and situation to situation. A company can gain sustainable competitive advantage in four major areas namely cost, quality, time and flexibility (Sureshchandar et al, 2002). The unassuming competitive advantage of Amazon over its rivals can be attributed to the efficiency of the workforce present in the organisation, which is clearly reflected in article 1. Article 1 essentially revolves around the work culture of Amazon. The article deals with the recruitment, selection and absorption process of the organisation. The company after setting its office in Rugely, started recruiting in huge numbers. The company hired Randstad as its major recruiting agency. The hired workers were known as associates and were kept under a training period of minimum three months before they were absorbed by the company. The main objective behind this strategy was to find the top performing temporary associates for the available permanent vacancy. The company achieved creative advantage by following the kaizan approach to increase the efficiency of workforce. Every warehouse was appointed with a continuous improvement manager whose job was to look for any kind of hindrance or delay, and solve them. The company also appointed mobile problem solvers who continuously patrolled the warehouse to look for issues slowing down the operational process and fix them. Amazon started its operations as an online bookseller. Once the company became a prominent leader in the online book selling category, it started diversifying its operations into other sectors. From article 2, it is clear that product differentiation and diversification has provided a competitive advantage to the company (Ehmke, 2010). The company has also invested in technology to remain competitive in the market. The products of Amazon are essentially simple and easy to operate, which increases the customer preference. The company’s continuous investment in new and creative areas such as technology, cloud computing etc., has provided a competitive edge to the company. Strategy Development and Implementation A strategy can be defined as a scope and direction for the organisation, which is profitable to the organisation in the long run, makes the best and most efficient use of the resources, meet the needs and demands of the market and satisfy the stakeholder expectations (Anonymous, 2006). Different strategies are applied in different stages of business, such as corporate strategy, business strategy and operational strategy. Amazon is one the prominent leaders in the retail business. Article 1 reflects the overall operational strategy of the organisation. An operational strategy aims in efficient management of each operational unit of the company and to efficiently utilise the tangible and intangible resources of the company to generate maximum profits (Datta and Roy, 2011). To maximise the efficiency of its operational processes, the company has applied many strategies. The recruitment and selection process of the company is strict and rigorous. To optimise the efficiency of workforce and increase the cost-effectiveness, the company follows the strategy of recruiting and maintaining the best talent among the temporary job positions. Amazon’s efficient software helps workers to reach the target destination in least time and distance covered. To further monitor the work flow in the warehouse, kaizan strategy has been applied extensively. In kaizan approach every warehouse was appointed with a continuous improvement manager whose job was to look for any kind of hindrance or delay, and solve them. The company also appointed mobile problem solvers who continuously patrolled the warehouse to look for issues slowing down the operational process and fix them. Apart from this, the hand-held computers provided to the employees gave them a real time indication to monitor their performance. Further managers could send text messages in these devices informing the workers to increase their speed. This helps in creating an intense and active working environment and keeps the efficiency of the workers to its maximum. Article 2 deals with the initial establishment of the company and its business and corporate strategy. The organisation works on long term goal optimization by sacrificing the short term profits. This has helped Amazon in gaining huge stakeholder loyalty. The company’s corporate strategy thrives in continuous diversification in new areas and gain competitive advantage over a period of time (Holcomb et al, 2006). In order to establish itself in the growing e-market, the company has launched many products to match the demands of the continuously evolving customer preferences. Upgrading the company’s strategy in accordance with the rapid technological change has been the core strength of the company. Once the business model of the company reached maturity stage, the company diversifies into new business segments (Talha, and Salim, 2010). For example, after the company ventured into hardware from retail book selling, it took an unexpected move and ventured into cloud computing and soon became a market leading in this category too. The company has been unsuccessful in few areas such as Amazon auctions or Amapedia, a possible substitute for Wikipedia, which could not succeed in the market (Cadenhead, 2007). But venturing into new areas and continuously thriving for new ideas for improving the business strategy has been the major objective of the business strategy for the company. From the findings of this study it is clear that the company's major strategic and competitive advantages are offering lowest affordable prices, products ranging from grocery to digital media, and online shopping which helps in convenient online shopping from home or other devices such as mobile (Porter, 2001). The company has also gained a competitive advantage with its efficient tangible and intangible resource utilization. The most common approaches used by the company are kaizan, lean management and use of software to monitor the workforce and increase their efficiency (Brunet and New, 2003). It also has a cost edge over traditional brick and mortar retailers, since it does not have to bear the cost of managing physical stores. References Anonymous, 2006. The importance of marketing strategy: Gaining the competitive edge with Integrated Marketing Communications (IMC). Strategic Direction, 22(8) pp. 23 – 25. Brunet, A. P. and New, S., 2003. Kaizen in Japan: an empirical study. International Journal of Operations & Production Management, 23(12), pp. 1426-1446. Cadenhead, R., 2007. Amapedia: The Conspicuous Consumption Community Wiki. [pdf] Available at: [Accessed 27 April 2013]. Datta, P. P. and Roy, R., 2011. Operations strategy for the effective delivery of integrated industrial product-service offerings: Two exploratory defence industry case studies. International Journal of Operations & Production Management, 31(5), pp.579 – 603. Ehmke, C., 2010. Strategies for Competitive Advantage. [pdf] Available at: [Accessed 27 April 2013]. Holcomb, T. R., Holmes, R. M. and Hitt, M. A., 2006. Diversification to Achieve Scale and Scope: The Strategic Implications of Resource Management for Value Creation. Advances in Strategic Management, (23), pp.549 – 587. Mitchell, D. and Coles, C., 2003. The ultimate competitive advantage of continuing business model innovation. Emerald 24. Porter, M. E., 2001. Strategy and the Internet. Harvard Business Review, March, pp. 1-19. Sureshchandar, G. S., Rajendran, C. and Anantharaman, R. N., 2002. The relationship between service quality and customer satisfaction – a factor specific approach. Emerald 16. Talha, M. and Salim, A. S. A., 2010. What prompts firms to choose between business and geographic segments as a primary segment. Managerial Auditing Journal, 25(1), pp.17 – 31. Read More