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Strategic Case Analysis: Amazon
Essentially, the paper addresses and investigates Amazon, one of the world's largest
companies engaged in selling all sorts of goods and services through the Internet. Amazon
achieved customer loyalty and introduced innovations to the e-commerce field, expanding
products and services categories compared to other e-commerce platforms. Despite its growth
and success, Amazon faces specific problems and has a potential for improvement. Therefore,
the strategic case analysis provides clear and detailed recommendations on organizational
strategy, change management, ethics, and process improvement to resolve the current issue.
Overview of the Organization
Amazon organization is one of the world's leading retail companies, dominating the
electronic sector of the market. Founded in 1995 by Jeff Bezos, the e-commerce service
expanded rapidly, becoming global in the 21st century (Sadq et al., 2018). Initially, Bezos
realized that the Internet would change the consuming habit among almost all people; he should
be part of this paradigmatic change. Thus, Amazon opens new locations around the world that
extend the number of jobs further. In a way, Amazon has become the primary association with
the sphere of electronic retail. Alshmrani (2021) emphasizes that Amazon's activities were
initially narrowed to online book promotion; however, the company grew and started selling
various products, such as electronics, computer games, home decor, and clothing. Besides,
Amazon provides a detailed description of the products, including information about the
production, selling companies, ratings, and user reviews. Amazon owns the idea of buying goods
in one click, widely used today everywhere in e-commerce and websites similar to Amazon.
Thus, Amazon serves as an effective link between businesses and buyers, organizing convenient
purchases and deliveries.
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Furthermore, Amazon's business model has a long history of success. It is determined by
the active use of digital innovation, convenient retail formats, and logistics infrastructure
expansion for the end consumer (Hahn et al., 2018). Indeed, Amazon possesses an array of
critical advantages that solidify its position in the market, enhancing its competitive advantage.
Amazon identified five primary strategy dimensions: "reasonable pricing, fast shipping, clear
reach, accurate delivery, and quick customer service" (Alshmrani, 2021, p. 78). Specifically,
Amazon boasts its customer-centered business model, within which all operations are aimed at
improving customer experience and increasing customer convenience and services usability
(Hahn et al., 2018). In addition, the reputation of the brand works toward its status as the leader
of the industry.
Therefore, years and decades of domination in the electronic retail segment have secured
the brand's leading position, establishing solid associations with quality and reliability. This way,
Amazon benefits from the trust of its customer base. The company states its mission as a
"customer obsession" as it prioritizes relations with its customers over the focus on competitors
(Amazon, 2021). Nowadays, Amazon is not only one of the largest online stores globally but
also one of the leaders in sales in general. In addition to the United States of America, Amazon
also operates in Europe and Asia. As a result, Amazon has been able to retain its leading position
in e-commerce; however, the current landscape exhibits a continuously growing level of
competition, which threatens the status of Amazon.
The company's performance is not impeccable, as initial analysis revealed many
weaknesses and risks that may become crucial in the contemporary environment. First of all, the
business model of Amazon is subject to replication, as the level of technological progress creates
such opportunities for new entrants. More companies venture into electronic retail, especially in
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the age of digital solutions as the primary response to the COVID-conditioned reality.
Organizational Strategy
Amazon has a functional organizational structure that concentrates on business activities
as foundations for interactions management between the organization's components units. In
Amazon's organizational structure, there are three core elements: global hierarchy, global
function-based groups, and, finally, geographical divisions (Meyer, 2019). Amazon has
implemented a hierarchical structure due to its enormous business size. Meyer (2019)
demonstrates that the hierarchy is illustrated as a global structure of vertical authority divisions
that impact the company's decision-making process. Consequently, senior managers influence
relevant Amazon's offices in different locations worldwide. In order to efficiently manage e-
commerce business throughout the company, Amazon includes function-based groups, which
consist of a committed team led by a senior manager (Meyer, 2019). This strategy is beneficial
for organizational expansion when considering new target markets. Organizational structure also
consists of geographical divisions, which help Amazon control e-commerce operations regarding
particular regions' economic conditions (Meyer, 2019). Therefore, the current organizational
structure supports the company expand and control various markets in different geographical
locations.
Nevertheless, it is essential to add that the hierarchical organizational structure has
outlived its usefulness, and in the future, the company is encouraged to consider other options.
Meyer (2019) suggests that Amazon's organizational structure has limited flexibility due to
global hierarchy and reduced capabilities to react to arisen issues in the business rapidly. Thus, it
is crucial to challenge traditional organizational structures, empower teams, give people more
Strategic Case Analysis: Amazon
Essentially, the paper addresses and investigates Amazon, one of the world's largest
companies engaged in selling all sorts of goods and services through the Internet. Amazon
achieved customer loyalty and introduced innovations to the e-commerce field, expanding
products and services categories compared to other e-commerce platforms. Despite its growth
and success, Amazon faces specific problems and has a potential for improvement. Therefore,
the strategic case analysis provides clear and detailed recommendations on organizational
strategy, change management, ethics, and process improvement to resolve the current issue.
Overview of the Organization
Amazon organization is one of the world's leading retail companies, dominating the
electronic sector of the market. Founded in 1995 by Jeff Bezos, the e-commerce service
expanded rapidly, becoming global in the 21st century (Sadq et al., 2018). Initially, Bezos
realized that the Internet would change the consuming habit among almost all people; he should
be part of this paradigmatic change. Thus, Amazon opens new locations around the world that
extend the number of jobs further. In a way, Amazon has become the primary association with
the sphere of electronic retail. Alshmrani (2021) emphasizes that Amazon's activities were
initially narrowed to online book promotion; however, the company grew and started selling
various products, such as electronics, computer games, home decor, and clothing. Besides,
Amazon provides a detailed description of the products, including information about the
production, selling companies, ratings, and user reviews. Amazon owns the idea of buying goods
in one click, widely used today everywhere in e-commerce and websites similar to Amazon.
Thus, Amazon serves as an effective link between businesses and buyers, organizing convenient
purchases and deliveries.
, 2
Furthermore, Amazon's business model has a long history of success. It is determined by
the active use of digital innovation, convenient retail formats, and logistics infrastructure
expansion for the end consumer (Hahn et al., 2018). Indeed, Amazon possesses an array of
critical advantages that solidify its position in the market, enhancing its competitive advantage.
Amazon identified five primary strategy dimensions: "reasonable pricing, fast shipping, clear
reach, accurate delivery, and quick customer service" (Alshmrani, 2021, p. 78). Specifically,
Amazon boasts its customer-centered business model, within which all operations are aimed at
improving customer experience and increasing customer convenience and services usability
(Hahn et al., 2018). In addition, the reputation of the brand works toward its status as the leader
of the industry.
Therefore, years and decades of domination in the electronic retail segment have secured
the brand's leading position, establishing solid associations with quality and reliability. This way,
Amazon benefits from the trust of its customer base. The company states its mission as a
"customer obsession" as it prioritizes relations with its customers over the focus on competitors
(Amazon, 2021). Nowadays, Amazon is not only one of the largest online stores globally but
also one of the leaders in sales in general. In addition to the United States of America, Amazon
also operates in Europe and Asia. As a result, Amazon has been able to retain its leading position
in e-commerce; however, the current landscape exhibits a continuously growing level of
competition, which threatens the status of Amazon.
The company's performance is not impeccable, as initial analysis revealed many
weaknesses and risks that may become crucial in the contemporary environment. First of all, the
business model of Amazon is subject to replication, as the level of technological progress creates
such opportunities for new entrants. More companies venture into electronic retail, especially in
, 3
the age of digital solutions as the primary response to the COVID-conditioned reality.
Organizational Strategy
Amazon has a functional organizational structure that concentrates on business activities
as foundations for interactions management between the organization's components units. In
Amazon's organizational structure, there are three core elements: global hierarchy, global
function-based groups, and, finally, geographical divisions (Meyer, 2019). Amazon has
implemented a hierarchical structure due to its enormous business size. Meyer (2019)
demonstrates that the hierarchy is illustrated as a global structure of vertical authority divisions
that impact the company's decision-making process. Consequently, senior managers influence
relevant Amazon's offices in different locations worldwide. In order to efficiently manage e-
commerce business throughout the company, Amazon includes function-based groups, which
consist of a committed team led by a senior manager (Meyer, 2019). This strategy is beneficial
for organizational expansion when considering new target markets. Organizational structure also
consists of geographical divisions, which help Amazon control e-commerce operations regarding
particular regions' economic conditions (Meyer, 2019). Therefore, the current organizational
structure supports the company expand and control various markets in different geographical
locations.
Nevertheless, it is essential to add that the hierarchical organizational structure has
outlived its usefulness, and in the future, the company is encouraged to consider other options.
Meyer (2019) suggests that Amazon's organizational structure has limited flexibility due to
global hierarchy and reduced capabilities to react to arisen issues in the business rapidly. Thus, it
is crucial to challenge traditional organizational structures, empower teams, give people more
