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BADM 638 Strategic Decision Making
Comprehensive Capstone Case Study – Amazon Inc.
Amanda Cagle
Aneri Kamdar
Ganesh Konakalla
Paurin Dipenkumar Mehta
Jada Walden
University of the Cumberlands
Table of Contents
Executive Summary……………………………………………………………………………….4
Situational Analysis..…………….………………………………………………………………15
SWOT Analysis………………………………………………………………………………….24
Problem Statement……………………………………………………………………………….
Strategic Plan…………………………………………………………………………………….
Executive Summary
Jeff Bezos graduated from Princeton University, majoring in computer science and electrical engineering. In 1994, Bezos began working at the hedge fund D.E. Shaw, researching new business opportunities for the emerging internet (History of Amazon, 2020). After compiling a list of around 20 products to sell online, he was disregarded by Shaw and decided to strike out on his own.
The original name was Cadabra, Inc., chosen for the magical incantation, abracadabra (History of Amazon, 2020). After advisement from his attorney, the name was changed to Amazon since it was easy to spell, started with the letter A, and was named after the Amazon River, large and free flowing.
Amazon started from humble beginnings with a $10,000 personal investment, launching on July 5, 1994, from Bezos’ garage in Seattle, WA (Hartmans, 2021). The initial product line was books based on low cost, high demand, and a wide variety of titles to offer. Accessibility was the strategy for competitive advantage, becoming the book go-to source for customers around the world.
On May 15, 1997, Amazon went public with share prices of $18.00, although stock splits on day one of trading resulted in share worth of $1.96 (DePillis & Sherman, 2021). Competition from Barnes and Noble and heavy investing in marketing and technology prompted Amazon to warn investors to expect losses in the future for an undetermined amount of time.
Amazon began expanding into music in 1998, offering over 125,000 titles with the option to listen to clips before purchasing. The “one click” purchase option was patented in 1999, with the license lasting until 2017, allowing Amazon to collect customer data and entice larger purchases (DePillis & Sherman, 2021). Amazon Prime debuted in 2005, offering customers free two-day shipping for members and now includes music, movies, and shows, making Prime one of Amazon’s largest assets.
Just before Christmas in 2007, Amazon introduced Kindle, offering immediate purchase downloads of various media content such as books, newspaper articles and magazines. Just a year later Amazon acquired Audible, boosting their audiobook market now to 41% with smartphones and steaming accessible car radio systems (Hughes, 2021). Amazon Web Service (AWS), the home of the Echo Dot and Alexa, has become the company’s largest profit driving force. Whole Foods Market was purchased in 2017, combining distribution channels and offering discounts for Prime members (DePillis & Sherman, 2021).
Amazon has grown to the largest E-commerce retailer in the world, with sales increasing from 6.92 billion in 2004 to 96.1 billion in 2020 (Ciancio, 2017). Profits and sales reached new heights during the pandemic, increasing up 37% compared to 2019, with share prices at $3211.00 (DePillis & Sherman, 2021).Jeff Bezos announced he would be stepping down in 2021 as CEO, moving into the position of Executive Chair. His replacement is Andy Jassy, former CEO of the company’s cloud business.
Situational Analysis
Performing a situational analysis is an important piece of the strategic management process. Understanding both the internal and external factors affecting an organization and the market will assist in deciding on and prioritizing the plan. It helps to understand the organizations competitive advantage and what is truly capable to be done while also giving a prediction of results (Brex, 2021). For Amazon, we will be reviewing a variety of factors for this situational analysis. These include the environment, industry, firm, and the product.
The Environment
The environment refers to the external assessment performed during the strategic planning process. Reviewing the external environment allows an organization to determine opportunities and potential threats. While there are ten identified external forces that can impact an organization, it is important to focus mainly on the ones which an organization can have an actual impact on and develop strategies around (David et al, 2020, p. 67). In the case of Amazon, we will discuss six of the ten factors.
Political Environment
Operating in an environment that is politically stable is important for a successful organization, particularly in e-commerce. Government support is crucial as it impacts profits, and when your organization is global, there is an even bigger impact (Frue, 2018). In Amazon’s case, the overall governmental support of e-commerce is critical to their ability to continue expanding into untapped markets (Greenspan, May 2019).
Economic Environment
Since Amazon is a global company, the economic circumstances of the countries in which it does business impacts the overall operations. Countries with a poorer economy will not bring as much value as a country with a richer economy. Taxes in each country will also play a role in overall revenue earned in each country (Alshmrani, 2021). Luckily in the American economy, where Amazon is most popular, disposable income is typically greater than in other countries. Due to this factor, retail is likely to remain profitable even in times of a down economy (Frue, 2018).
Additionally, the Covid-19 pandemic played a role and continues to impact the strategic planning of Amazon. As consumers worldwide were staying at home more, e-commerce grew and became even more popular. Even now, as we are moving into what we call “continuous Covid”, consumers are still opting for online rather than brick-and-mortar shopping (Rapp and Harty, 2021).
Social Environment
Today, the consumer approach is very different than it was even 10 years ago. The times of wandering through a store are gone. Everyone has a tiny computer in their hand that they can use to look up the exact product they want, read hundreds of reviews on it, compare it to others, and make a purchase from their couch within an hour. This is especially true for younger consumers (David et al, 2020, p. 69).
Another social aspect to consider is the aging population of the United States, which is the country utilizing Amazon the most. As the baby boomers are turning 65, this demographic will affect the strategic objectives of the organization (David et al, 2020, p. 69).
Technological Environment
As demand for more and more products rises, utilizing technology and tapping into uncharted areas will be important for continued success for Amazon. There is an opportunity for technological advancements to be used to make fulfillment and shipping more efficient as well as enhancing the customer service experience and engagement (Frue, 2018).
Working in a strictly online space, puts an organization like Amazon at risk for cybercrime. This type of activity is at an all-time high today and this is something that Amazon will need to be weary of (Greenspan, May 2019).
Legal/Regulatory Environment
Operating in a global environment means abiding by many different sets of laws and regulations. What may be permissible in one sector of the company, may not be permissible in another. Being able to flex and adapt to the various rules and regulations is necessary for Amazon (Alshmrani, 2021).One such regulation that affects Amazon operations revolves around imports and exports. Seizing opportunities that may lie in this realm can help with expansion. Another regulation surrounds environmental law. Ensuring that Amazon remains in compliance with these will have an impact on their reputation with consumers (Greenspan, May 2019). This factor is discussed more in the next section.
Environmental Environment
Sustainability and corporate social responsibility are becoming increasingly important to today’s global society. For a company to have long-term success, they must show that they are good stewards of the environment. Luckily, Amazon has been one of the top corporations in terms of reputation which includes their social responsibility (David et al, 2020, p. 509).
The Industry
Michael Porter fostered the Five Forces Analysis model as a tool for the outer examination of business associations. To maintain this industry position, in the long run, the organization should regularly assess the external elements in the online and non-online industry conditions, for example, tools like the Five Forces Analysis framework. Five Forces Analysis of Amazon covers the organization’s competitive landscape and the factors affecting its area. The investigation focuses on estimating the organization’s position based on forces like the threat of new entrants, the threat of substitutes, the buyers’ bargaining power, suppliers’ bargaining powers, and competitive rivalry (Greenspan, February 2019).
Bargaining power of suppliers
Looking at the streaming service, there are, to a great extent, two providers; the streaming infrastructure is based on top of AWS, which is an Amazon subsidiary and thus has no bargaining power (Dudovskiy, 2022). In any case, the content is given by a scope of production houses, and Amazon could need to battle with competitors for streaming rights. A ton of content is likewise unique content created by Amazon, and subsequently, for this situation too, the bargaining power is restricted, however considerable.
The impact of suppliers on the online retail industry environment is illustrated in this part of Porter’s Five Forces Analysis model (Greenspan, February 2019). Amazon encounters the moderate force of the bargaining power of suppliers in view of the accompanying outside factors:
1. A small population of suppliers (strong force)
1. Moderate forward integration (moderate force)
1. The moderate size of suppliers (moderate force)
The little portion engages suppliers to force areas of strength on Amazon’s online business. For instance, changes in equipment costs from a few huge suppliers could straightforwardly affect the organization’s online retail operational costs. Based on Amazon’s Five Forces Analysis, suppliers’ moderate meaning is an essential determinant in the online retail industry environment.
The threat of new entrants
Amazon has a wide scope of organizations. The ridiculous income-producing ones are Online Video Streaming, e-commerce marketplace, and Cloud Service provider, and thus this examination will zero in on the significant organizations. None of these organizations significantly impacts economies of scale in lessening the costs based on large-scale manufacturing. Consequently, this element doesn’t give an entry barrier. New firms possibly reduce Amazon’s market share in online retail. The impacts of new participants are viewed in this part of Porter’s Five Forces Analysis model (Greenspan, February 2019). Amazon experiences the weak intensity of the danger of new entry based on the accompanying external elements:
1. Low switching costs (strong force)
1. High cost of brand development (weak force)
1. High economies of scale (weak force)
Amazon’s purchasers can easily move to new firms, in this manner engaging new firms to impose a strong force against the organization. This condition is because of low exchange costs or the low negative effects of moving to start with one provider and then onto the next. Nonetheless, the significant expense of brand improvement in online retail weakens the influence of new entrants on the performance of Amazon. Based on the external elements in this part of the Five Forces Analysis, new entrants are a minor strategic issue in Amazon’s presence in the online retail industry environment (Dobbs, 2014).
Rivalry among existing competitors
For the e-commerce business, Amazon faces a significant threat from giants like Walmart, Alibaba, etc. With the push towards Omni-channel retailing, organizations like Walmart incorporate their brick-and-mortar stores with online shopping for an improved client experience. Further, the quantity of direct and indirect competitors is huge. The competitors can range from comparable monster online business organizations to little brick and mortar stores and, surprisingly, little vending machines (Greenspan, February 2019).
This part of Porter’s Five Forces Analysis model handles the impacts of firms on one another. Amazon is an example of the accompanying external variables that are answerable for the strong intensity of competition or competitive rivalry in the online retail industry environment:
1. High aggressiveness of firms (strong force)
1. High availability of substitutes (strong force)
1. Low switching costs (strong force)
Based on Amazon’s Five Forces Analysis of Amazon, competition should be a strategic priority to guarantee the organization’s long-term competence.
Bargaining power of competitors
The bargaining power relies upon an enormous number of variables like the concentration and size of purchase, product differentiation, switching costs, etc. We will take a gander at Amazon’s online business, real-time, and cloud administration organizations from all these aspects. This part of Porter’s Five Forces Analysis model decides the impact of consumers on firms and the industry environment (Greenspan, February 2019). The accompanying external factors support a strong intensity of the bargaining power of customers in affecting Amazon:
1. High quality of information (strong force)
1. Low switching costs (strong force)
1. High availability of substitutes (strong force)
Consumers have access to high-quality information with respect to the services of online retailers and the products they sell. This external factor influences Amazon in terms of the ability of customers to find options for the organization’s online retail service. Based on the external factors identified in this section of the Five Forces Analysis of Amazon should consider the strong bargaining power of purchasers as a major factor intending to business challenges in the online retail industry environment (Dobbs, 2014).
Threat of Substitutes
In the online retail market, Amazon competes with substitutes. This part of Porter’s Five Forces Analysis model recognizes how substitutes affect the industry environment (Greenspan, February 2019). In the case of Amazon, the accompanying external factors support the strong intensity of the threat of substitution:
1. Low switching costs (strong force)
1. High availability of substitutes (strong force)
1. Low cost of substitutes (strong force)
Amazon constantly addresses the strong force of substitutes, which compromise the e-commerce company’s performance. The low exchange costs demonstrate that customers can easily transfer from the company to other retailers. For instance, consumers can easily decide to purchase from Walmart stores or other retail establishments instead of purchasing from Amazon (Dobbs, 2014).
Consequently, the external factors in this part of the Five Forces Analysis of Inc. indicate that substitution is among the priorities in the organization’s techniques for long-term success in the online retail industry environment.
The Firm
Amazon is a large internet-based retailer that sells almost everything online to millions of its customers. The company also has cloud computing as part of its web services business that offers companies data storage and computing resources. Along with this, the company also produces Kindle e-book readers. After its launch in 1994, Amazon grew up to 180,000 users by December 1996 and to 1,000,000 accounts by October 1997. Similarly, revenues jumped from $15.7 million in 1996 to $148 million in 1997 and $619 million in 1998 (Hall, 2022).
Similarly, AWS became a huge success after its launch in 2002. Elastic compute cloud service and simple storage service was introduced as part of AWS in 2006 and 2007. S3 service had 10 billion files soon after 2007 and reached 905 billion in the next five years (Hall,2022).
In the current scenario, Amazon is still on a growth track even after the pandemic. COVID-19 further helped the company increase its revenue and market share by furthering the need for online retail. Within the U.S., 39% of all online purchases happened through the Amazon platforms. Its lead is so significant that its most prominent competitor Walmart has only a 5% market share (Neiger, 2020).
Even though e-commerce is Amazon’s largest business by revenue, its web services department is its most profitable venture. The e-commerce sales totaled $53.7 billion in the most recent quarter, with an operating income of $1.9 billion. However, AWS made $2.6 billion in net income with revenue of $9.9 billion. Amazon also leads the market share in the cloud computing business with 33% of the cloud infrastructure. For comparison, Microsoft’s Azure, the company’s biggest competitor, has a market share of 18% (Neiger, 2020).
Besides boasting financial success, Amazon also has a fleet of ideas for its future growth and expansion. In January 2018, the company showcased a cashier-less grocery store experience in Seattle. The brand is expected to use this technology in its Whole Foods chain of stores. The technology is labeled “Just Walk Out” and will be sold to other businesses. The company is also expanding in biometric payments and plans to implement them in its stores nationwide. Investing and gaining market share in India is another big goal of the company, and it has pledged $1 billion towards digitizing small businesses across the country. Amazon is also planning a separate food delivery service. Lastly, the company also has plans for AI-controlled robots, extending to the healthcare industry and self-driving cars (Amazon’s future plans, 2021). Moreover, Jeff Bezos recently stepped down as the CEO after 27 years to make way for Andy Jassy who was the CEO of AWS.
The Product
Amazon is known for providing an extensive variety of services plus goods, inclusive of music, video games, garden and home items, TVs, movies, books, toys as well as sporting goods among others. Additionally, they also provide several types of services, like Amazon Prime, which basically provides the members with two-day free shipping on items that are eligible. There is also the Kindle Lending Library that enables Prime members to be in a position of borrowing the Kindle books for free. The company is a most appropriate place to get anything that one might be in need for what they want. They also have a client service that is quite admirable (Chen, 2022).
In addition, the Amazon division that is highly profitable offers storage, remote computing, servers, networking, security, mobile development in addition to emails. The company may as well be classified into three major products. These include; Amazon’s virtual machine service, EC2, Amazon storage system, Glacier, cloud storage service that is low-cost plus S3. The firm basically sell over 12 million products. In its attempts to be everything for all individuals, it has ended up building a catalog that is quite unbelievable of over 12 million goods, wine, services, media plus books. When this is expanded to the Marketplace sellers of Amazon, this number tends to be an estimate of over 350 million products. This e-commerce giant has also gone through the completion of acquiring the Whole Foods Market in the year 2017.
The Amazon website is actually known for solving the needs for clients to have a shop that is one-stop for every single shopping need they have. May it be music, books, video games, movies, toys, home as well as garden items, sporting items among other things, one is able to find them on the Amazon. In addition, Amazon is known for creating value for its clients. This is through offering services that are customer satisfactory through managing the retail operations with an efficient usage of technology. The operational efficiency is considered to be one ofAmazon’s strengths in addition to it supporting the management in maintaining its competitive edge as well as enhancing their corporate performance. It also created value for the consumers through providing them with an extensive array of goods to choose from via their website in addition to making sure their products delivery is timely to exhibit a commitment that is of a high level towards their clients as well as businesses (Goel et al, 2020).
Amazon initially is considered to have been a venture into an internet emerging market and was forced to encounter unexpected as well as hidden hurdles for their survival in addition to excelling within the market. As a result, the company strived towards modifying its own strategies having their major focus on improving the consumer experience of online shopping as well as the delivery of exceptional services with total convenience to their clients. Amazon also maintains its warehouses within various countries so that it ensures there is timely as well as accurate delivery to their own clients.
Amazon basically utilizes different promotional strategies with an aim of reaching their clients, inclusive of social media, television commercials as well as online ads. They make use of various channels for distribution, inclusive of their website, third party retailers as well as brick-and-mortar stores. They are also known for providing a variety of different pricing options, these comprises of discounts for the Prime members as well as free shipping which is on items that are eligible. In addition, this e-commerce giant utilizes premium pricing for its services plus goods, whereby, the firm gets to possess a market share that is solid as well as a competitive advantage. For instance, the publishers with the Kindle Direct Publishing get to be offered with a 70% option of royalty in addition to making their books readily available within the Kindle stores (Johansson, 2021).
Other means of pricing strategies that Amazon uses is penetration pricing, psychological pricing, price skimming, promotional pricing, product line pricing as well as geographical pricing strategies. This e-commerce giant gets to earn fees that are fixed, a given percentage of sales, interest, activity fees per unit or some combination of all these as per the seller programs.
Amazon company is one that has three major strategies which result into a competitive advantage, these include; focus strategy, cost leadership in addition to customer differentiation. The cost leadership strategy focuses on offers producing same quality goods with prices that are lower as compared to the market, the second strategy that is in relation to the larger amount of selection as compared to its competitors, while the focus strategy is one that focuses on the niche consumer via application of one among the two strategies. Amazon values are also known for positively affecting the competitive advantages, as a result, the firm tends to have two values that are strong – operational frugality and the customer satisfaction, these factors are considered to complement the operational approach of the firm in acquiring as well as sustaining a competitive benefit that is efficient in addition to bolstering employees plus the performance of the firm. Due to its economical approach in relation to paying a base salary that is less to its workers in respect to its own competitors, it gets to focus a lot more on the expansion of its business in addition to branding with the saved expenses (Sadq et al, 2018).
The organization gets to maintain the loyalty of its employees via the distribution of the firm’s shares amidst the employees. Through this, the firm intends to have a given message conveyed to employees that whenever the company benefits or earns profits, the employees will also be a part of the earned profit via the shares. Amazon’s strategic initiative tends to be targeting multiple categories via technology plus information. The company uses the application of segregation, growth as well as novelty through alliances. It gets to highlight the building sales volume externally at the same time minimizing the cost internally. This company has developed an organization that is quite difficult for the competitors to attack. Therefore, to that extent, Amazon is said to be successful, later in the future, other e-commerce companies might follow it. Amazon had a vision of being the largest bookstore on Earth, however, it has shifted into being the largest selection on earth. It is categorized as the first online retailers who are successful within the United States as well as globally. The company has gone to an extent of developing infrastructure through investing large sums of money that ease the exploration process for the clients to purchase any product. The firm is famous for its free shipping plus convenience; however, it also offers a selection that is vast of products at prices that are competitive.
SWOT Analysis
1. Amazon is the position leader in e-commerce and has a strong brand image.
2. According to Fulfillment by Amazon, more than 2 billion products are available from third party sellers.
3. Profit and revenues have increased due to successful acquisitions of Whole Foods Market, Zappos, Twitch gaming system, Zoox, and video doorbell Ring.
4. Amazon Prime, Amazon Marketplace, and Amazon Web Services (AWS) work together to generate profits and competitive advantages.
5. Amazon operates as an online retailer, information technology services, cloud computing, and other various services.
In order to maintain each strength, Amazon must constantly monitor external factors that threaten their top position in e-commerce. Amazon’s target market consists of those that prefer online shopping and have access to a computer or smart phone.Each strength services this market with a variety of products and services.
1. The online retail business model is easily copied by competition.
2. Product failure of the Fire Phone in the United States along with slow growth of the Kindle Fire.
3. Limited focus on global presence outside of North America.
4. False reviews from independent and third-party sellers to promote competitive advantage.
5. Very few brick-and-mortar options for items not available online.
Verifying reviews are legitimate and not inflated by vendors requires scrutiny by the company to maintain credibility with buyers and sellers. Focusing strictly as an online retailer may limit expansion into other emerging markets, such as establishing more brick-and-mortar opportunities.
1. Expand into new markets globally to increase market share.
2. Capitalize on cloud computing services, emphasizing cost efficiency, flexibility and work from home capabilities.
3. Partner with existing firms in developing markets, using their expertise and knowledge of the customer base.
4. Take advantage of the growing online grocery preference, utilizing the acquisition of Whole Foods and their distribution channel.
5. Amazon’s Small Business Accelerator assists in small business success with the intent to add 100,000 new dealers on the site.
Amazon Web Services includes cloud products, services, servers, storage, email, and remote capabilities, servicing all internet capable devices. Market AWS services to consumers and businesses as an alternative to their current provider.
1. Hacking and cybercrime resulting in compromised customer information and possible identity theft.
2. Competition from all online retailers in addition to competitors in all services offered by Amazon.
3. Quality of products offered by third-party sellers.
4. Government regulations to all countries serviced by Amazon.
5. Rivalry with their top competitor Walmart, with the launch of Walmart’s Fulfillment Service, offered third-party seller options.
Poor quality of products from third-party sellers damages Amazon’s reputation and could result in customers choosing a competitor for all online purchases. Remove third-party sellers that don’t stand behind their products and satisfy the customer.
Problem Statement
Strategic Plan
Mission, Vision and Core Values
Vision Statement
To be earth’s most customer-centric company, where customers can find and discover anything they might want to buy online.
Mission Statement
We strive to offer our customers the lowest possible prices, the best available selection, and the utmost convenience.
Core Values
Amazon is guided by four principals: customer obsession rather than competitor focus, passion for invention, commitment to operational excellence, and long-term thinking.Additional core values include:
· Ownership
· Invent and Simplify
· Are right, A Lot
· Learn and Be Curious
· Hire and Develop the Best
· Insist on the Highest Standards
· Thing Big
· Bias for Action
· Frugality
· Vocally Self-Critical
· Earn Trust
· Dive Deep
· Have backbone; Disagree and Commit
· Deliver Results
· Strive to be Earth’s Best Employer
· Success and Scale Bring Broad Responsibility
Objectives and Strategies
SMART stands for objectives and goals that are “Specific” i.e. detailed and easy to grasp what the goal comprises of, “Measurable” i.e. easy to track the progress, “Attainable” i.e. the goal should be realistic and possible to achieve, “Relevant” i.e. the goal should propel the company towards growth and success, and “Time-focused” i.e. the goal should be reached within a specific deadline. Using this framework and setting up SMART goals benefit the company as the goals are more likely to be completed.
Based on the identified problems, the below SMART objectives and associated strategies will help Amazon realize greater growth.

SMART Objectives


Be innovative – In the next three to four years, we will invest in new technologies to ultimately reduce spending and increase our competitive advantage in the retail space. We will start in our larger markets with the technological capabilities and pilot in 100 locations across the United States.

· Invest in logistics to improve shipping and delivery efficiencies.
· Continue investing in different financial services such as Amazon wallet.
· Pilot AI technology and robotics for cashier-less stores and warehouses.
(Gudat, 2022)

Know the customer – In the next twelve months we will conduct research and use both quantitative and qualitative historical data on customer analytics and behaviors to implement strategies to set us apart from our competitors.

· Incorporate voice advertisements based on consumer shopping habits via Amazon Web Services.
· Invest in additional market research to identify the reasons that consumers are shopping at places other than Amazon.
(Gudat, 2022)

Grow secondary lines of business (apparel, streaming, etc.) – Within three to four years of executing objective B, we will enhance the lines of items offered under our entire umbrella. We will track the number of new product offerings in each of our segments and continue targeting the top two to three products for future development.

· Market research for consumer interest in television and movies. Invest in more “original” programming to draw customers to streaming platform.
· Offer clothing subscriptions as a function of “try before you buy” to engage customers searching for the no-hassle, personal stylist aspect of shopping (i.e. Stitchfix).
· Expand brick and mortar storefronts to all 50 states.
(Gudat, 2022)

Increase security measures – In the next two years we will work to implement security upgrades to our system and tracking the total number of impacted consumers on a monthly basis to monitor improvement. We will pilot this internally to have an opportunity to test and gain feedback before introducing to the public.

· Requirement of all employees to complete annual security awareness training with a focus on keeping customer information safe.
· Make this training available to the public for individuals and business to use for added public awareness.
· Offer free multi-factor authentication for all customers using Amazon Web Services.
(US About Amazon, 2021)

Penetrate markets in Europe and Asia – In the next five years we will expand into six new European and two new Asian markets aided by an understanding of the country’s culture, habits and users.

· Conduct market research through surveys and use historical data to understand trends and consumer habits for market penetration and segmenting.
· Use Big Data, develop results showing charts with best-selling product categories, best days in the week, best season, changing trends, etc
· Focus expansion efforts on acquiring foreign marketplace companies rather than brand new Amazon operations in a foreign country.
· Invest in research to find new suppliers in foreign markets.
(Voyles, 2021)
Implementation Plan
We are recommending the 6 steps implementation plan. It includes defining the goals, conducting research, map out risks, schedule milestones, assigning tasks, and allocating the resources (Asana, 2021).
Defining the goals
The first and most crucial step is determining the goals of the company. It won’t be easy to assess the success of your project if you do not have clear goals. The goals should be specific, measurable, achievable, relevant, and time bound. This ensures that goals are both clear and attainable (Simpson, 2022).
Conducting research
Once we define the goals clearly, the next step is to conduct the research. Surveys, interviews, focus groups, and observations will be helpful in achieving the goals. We should include the key experts in the research in their respective filed. The research findings should include a list of potential project timelines, budgets, and personnel.
Map out risks
Brainstorming is one of the best options for identifying the potential risks. SWOT- analysis helps in identifying the weakness and threats of the project. The risk register tool is also one of the important things to consider, which will give a direction on prioritizing the risks involved in the project (Asana, 2021).
Schedule milestones
To track the progress of the project during execution, a milestone schedule will be helpful. It is a way to measure how far we have achieved the goals or objectives of a particular task or project. We can use Gantt charts for visual representation (Asana, 2021).
Assigning tasks and responsibilities
RACI chart can be used for assigning the tasks, roles and responsibilities. Top management will get an idea about the performance of the team and team members by assigning the tasks, roles, and responsibilities (Simpson, 2022).
Resource allocation
Proper resource allocation will always keep the project on the path to success. It helps in completing the project on time within the budget by avoiding potential risks caused by work delays (Simpson, 2022).
Key Performance Indicators
Key performance indicators (KPIs) are essential in determining the performance of a business. They assist in assessing progress in relation with se benchmarks. At Amazon, KPIs are vital since they equip sellers with analytical measures that they can use to assess the progress of their business (Schrage, 2019). They empower them to undertake informed sales promotion, customer support, and product listings. Thus, they are the cornerstones of various aspects of the business including sales, profitability and inventory management. Some of the core KPIs at Amazon are as follows:
1. Product conversion rate
The product conversion rate refers to the number of buyers who purchase a product after landing on its product page. It informs the seller of their e-commerce website’s competitiveness. Websites with high conversion rates have better customer value and indicates low costs of advertising (Schrage, 2019). Conversely, low conversion rates indicate high costs of customer acquisition through advertising and a need for a store to enhance its website and advertising campaigns.
2. Revenue per client
The revenue per client measures the amount of money generated from the sale of products to a single client. It is obtained by dividing total sales revenue by the number of users of the e-commerce store (Schrage, 2019). It shows the average value of each customer and helps sellers devise ways of improving sales. These ways may include product page optimization or advertising.
3. Client Retention Rate
The client retention rate is the number of customers who are retained in an e-commerce website over a given period. It informs a seller the various aspects that help maintain customers. It also helps sellers devise new ways of attracting and keeping new customers. Low customer service rates are indicators of poor customer experiences and are likely to lead to low sales volumes and revenues.
4. Shopping Cart Abandonment Rate
This KPI refers to the proportion of online customers who leave their shopping carts with products but do not purchase them. At Amazon, the shopping cart abandonment rate is about 70% (Le and Maio, 2020). It indicates that seven out of every ten buyers are likely to abandon their shopping carts without completing their purchases. The reasons for these abandonments include high shipping costs, complex checkout processes or shoppers who have no intention of buying. Nevertheless, a seller optimize their Amazon store to ensure seamless checkouts, provide all necessary information and provide buyers incentives to buy their products.
5. Profit Margins
The profit margins in an Amazon sites indicate the effectiveness of a business in generating profits per every revenue dollar. It is a vital KPI for making both long-term and short-term financial decisions. High profit margins are indicators of excellent business performance. They indicate low costs and high sales revenues (Le and Maio, 2020). Conversely, low profit margins indicate poor business performance and are signs of high costs or low sales volumes.
6. Click-through rate
This KPI is the proportion of people who click on a product listing after viewing it. It is an indicator of the effectiveness of the advertisement efforts and website optimization (Le and Maio, 2020). Low click-through rates indicate poor advertising or low desirability of products. A seller may need to enhance their marketing to improve their rates.
7. Pre-fulfillment cancellation rate
This KPI indicates proportion of seller-initiated cancellations for orders before they are shipped. This rate occurs when sellers have fewer products than initially ordered by a customer. Sellers must maintain this rate at 0% to ensure buyers always access products whenever they need them.
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