Amazon Organizational Analysis
Market Discipline: Operational Excellence – Those firms who are considered to be operationally excellent combine low prices, ease of purchase, and offer unmatched value and services to their customers. Amazon.com is a prime example of a company that operates under the operationally excellent market discipline. Major moves by Amazon that support this claim are one-click shopping, free shipping, and extremely simple publishing on the Kindle store. Just as GE is the most noted company in the text Discipline of Market Leaders as operationally excellent, “More than any other corporation of the Internet age, Amazon embodies the emerging culture of business strategy. It is the General Electric of our times, and Bezos is the Jack Welch.” (Rao, 2011).
Grand Strategy: Growth – Companies must provide clear mission and vision statements to express the purpose and goals of the organization. Following the mission and vision statements is the strategic planning process which is one of three types of planning for three levels of management. The strategic planning process determines what the organization’s long term goals will be for the next 1 to 5 years. Amazon’s vision and mission statement is “Our vision is to be earth’s most customer centric company; to build a place where people can come to find and discover anything they might want to buy online.” which implies that the company is using growth for its grand strategy. An example of Amazon expanding its business is Amazon Web Services. Amazon Web Services includes providing startups and corporations with data centers and bandwidth to enhance online business. The service segment of Amazon saw a sales increase of 45% in Q1 of 2013 (Speculations, 2013).
Strategic Type: Prospector – Amazon can be best described as a prospector due to its outlandish ideas and innovative ways to bring products and services to its customers in the cheapest, and most convenient way. Other strategic types include Defenders, Analyzers, and Reactors. An example of Amazon as a prospector includes its Kindle product line which when first released was unmatched in its services and ease of use. In order to develop the Kindle line Amazon has to become an OEM which meant it had to transform its business model to better suit the needs of its customer base to better serve
them (Johnson, 2010).
S.M.A.R.T. goals – S.M.A.R.T. goals are those that are specific, measurable, attainable, results-oriented, and involves target dates. An example of a S.M.A.R.T. goal that Amazon used to obtain a higher market share in China is “Regain the status as the market leader by increasing market share from its current position of 16% to 24% within the next 2 years.” (Quy, 2007). This goal is specific in that Amazon wanted to increase market share to 24% in China. It is measureable in that the market analytics will be able to identify which percentage of online shopping is done through Amazon. It is attainable since Amazon’s major competitor at the time in China, Dangdang.com, was selling at a loss and not expected to make it past 2007. This goal is results-oriented in that is supports Amazon’s vision to be the most customer-centric market place on the planet and it had a target date of 2 years from 2007.
Johnson, Mark W. “Amazon’s Smart Innovation Strategy.” Businessweek. Businessweek.com, 12 Apr. 2010. Web. 5 Oct. 2013. Quy, Vu. “Amazon Strategic Plan.” Scribd. Vu Quy, 2007. Web. 05 Oct. 2013. Rao, Venkatesh. “Why Amazon Is The Best Strategic Player In Tech.” Forbes. Forbes Magazine, 14 Dec. 2011. Web. 06 Oct. 2013. Speculations, Great. “Amazon’s Primed To Deliver Strong Growth Amid E-Commerce Boom.” Forbes. Forbes Magazine, 24 July 2013. Web. 06 Oct. 2013.