Running Head: AMAZON ANALYSIS 1
Running Head: AMAZON ANALYSIS 1
Amazon's Mission and Vision Statement with Operational Management Strategy Analysis
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AMAZON ANALYSIS 2
Executive Summary
Amazon operates in the online retail industry. It is the most successful online store across
the globe. Amazon strives to attain mission and vison through exemplary customer service. It
employs product differentiation to satisfy consumers better. The reviews database eases
consumers’ purchase decisions and creates a shopping community. Also, the A9 search
algorithms have provided an improved search experience. Amazon has an ethical for both
employees and consumers. They entail price-fixing, conflict of interest, not disclosing users’
data, full disclosure of product information, a safe working environment, and abiding by existing
laws. Amazon has met and exceeded its financial projections in the fourth quarter of 2019. The
organization faces a strong competitive force and high substitutes threat. Suppliers have
moderate power while customers' bargaining power is high. The organization suffers a low risk
from startups. Amazon’s significant strengths are a vast capital base and product differentiation.
However, it has few physical stores and has faced instances of online fraud. Amazon can utilize
the opportunity of the prevalence of online shopping by creating their branded products.
However, the threat of counterfeiting and spoiling confronts the opportunity. Remarkable
recommendations for the research are that Amazon should innovate more in IT, mitigate
Amazon's Mission and Vision Statement with Operational Management Strategy Analysis
Amazon operates in the online retail industry. It is the most successful online store across
the globe. Amazon is a business-to-consumer since its primary focus is the customers (Lincoln
IV, 2018). The organization's vision statement is being the most customer-centered company on
earth, provide an avenue where consumers can locate anything; they need to purchase at the
lowest cost possible. Amazon’s mission statement to attend to customers online as well as
Customer Service
The amazon has strived to attain its vision and mission statements through improved
customer service. The organization has a vast pool of products from which consumers can select,
such as clothing, books, music, food, robotics, movie database, among others (Lincoln IV, 2018).
To increase the personalization of their stores, Amazon reconfigured the online stores to conform
with each customer’s preference by establishing the “your store service,” which has been critical
Nuraddin, & Hama, 2018). Also, Amazon launched the A9 ranking algorithm that provides a
convenient product search experience to the consumers. Besides, the company also employs a
vast pool of reviews as well as ratings. The reviews are a crucial component of Amazon’s
shopping experience. They induce a common approach of shopping through the participatory
work, creating a social community that translates to end customers with a sense of belonging.
AMAZON ANALYSIS 4
Performance
market leader. The report of the release of its financial statements made Amazon’s market
capitalization surpass $ 1 trillion (Palmer, 2020). Amazon’s revenue has grown by 21%, totaling
to $87.44 billion (Palmer, 2020), and its net income for the third quarter increased by 8%.
However, there was a 1% decline in revenues from the company’s physical stores that
On the other hand, Amazon employs ethical standards towards its customers and
employees to achieve their mission and mission. The first guiding code states that “employees
must follow applicable laws, rules, and regulations at all times” (Amazon, 2020). Also, the
organization does not support sexual harassment or discrimination. Amazon demands that sellers
should provide the correct product information to the consumers and not harm reviews and
ratings of other sellers. Besides, sellers should destroy consumers’ data after transaction and
avoid undesired messaging to consumers. Standards also bound Amazon’s employees on conflict
of interest, insider trading, bribery, and price-fixing. Also, the company provides a safe, healthy,
and clean working environment (Amazon, 2020). It is the responsibility of workers to ensure
Porter Analysis
Threat of Substitutes
Amazon faces a high risk of substitutes because of insignificant switching costs from
Amazon to alternatives such as eBay. Besides, there is the availability of other options, for
AMAZON ANALYSIS 5
instance, Walmart that is supported by physical stores for urgent shopping scenarios (Greenspan,
2017). Low switching cost creates a weak barrier that enables consumers to shift among retailers
undemandingly.
Amazon experiences a moderate force from suppliers. The low number of suppliers
enables dominance over materials and supplies availability. A negative vicissitude of prices from
a significant number of suppliers would adversely affect Amazon’s operational costs (Greenspan,
2017). However, the company employs a forward integration model that moderates the force of
suppliers.
Competitive Rivalry
There is an intense rivalry force. Amazon faces direct competition from other E-
commerce giants like eBay and book stores such as Noble (Majed, Nuraddin, & Hama, 2018).
Besides, the company experiences a strong rivalry force because of it of high presence of
substitutes. Lack of patented technology such as “Click Ordering” also makes the industry have a
The buyers’ power is high. The organization’s consumers have the liberty of purchasing
from the vast network of online and offline retailers (Greenspan, 2017). Low switching costs and
Amazon has a low threat from new entrants. It would be challenging for a startup
company to attain the inventory magnitude held by Amazon (Majed, Nuraddin, & Hama, 2018).
Also, current principal markets are unfavorable to internet startups. Therefore, it less likely for a
Swot Analysis
strengths of Amazon are that it has a large capital base (Majed, Nuraddin, & Hama, 2018).
Besides, the organization has employed differentiated product strategy with products such as
cloud computing, streaming services, brick and mortar stores, among others. Besides, Amazon
has significant leadership in technology. However, Amazon has less presence of physical stores
for the population, not inclined to online shopping. Also, internet users worry about fraud
associated with online purchases (Greenspan, 2017). Amazon has various opportunities. First, it
can expand the number of physical stores which would stringent its competitiveness with “big
box” sellers. Besides, Amazon should utilize the prevalence of online shopping and develop their
brands rather than selling third party products. However, the company is threatened by the
emergence of other new entrants, which will affect their prices and future operations. Besides,
they could suffer huge losses due to counterfeits and spoiling of products.
Recommendations
i. Amazon can mitigate intense rivalry by improving its brand image through marketing
campaigns.
iii. More effort should be utilized in countering counterfeits such as by employing public
Conclusion
Amazon has employed strategies such as customer reviews, low prices, product
differentiation, and improved customer experience to achieve its mission and vision statements.
The organization also has an employee and customer standards of conduct and ethics. Amazon
faces strong buyer bargaining power and competitive rivalry. Besides, Amazon has a low
physical presence. Amazon should encourage the utilization of its payment platform to reduce
fraud, establish more physical stores, mitigate high rivalry force by improving its brand image
References
https://ir.aboutamazon.com/corporate-governance/documents-charters/code-business-
conduct-and-ethics
Greenspan, R. (2017) ‘Amazon.com Inc. Five Forces Analysis and Recommendations (Porter’s
forces-analysis-recommendations-porters-model
Lincoln, I. V. A., C., E. (2018). Porter Analysis: A Business Strategy of Amazon. Com Through
Intangibles. In Practical Guide to US Transfer Pricing. Matthew Bender & Company, Inc.
Majed, S., Nuraddin, S., & Hama, S. (2018). Analyzing the Amazon Success Strategies. Journal
19264
Palmer, A. (January 30, 2020). Amazon Soars After Huge Earnings Beat. CNBC. Retrieved from
https://www.cnbc.com/2020/01/30/amazon-amzn-q4-2019-earnings.html