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The purpose of this paper is to comprehensively evaluate the marketing process of the online retailer Amazon.com, Inc. Amazon.com offers a diverse range of retail services alongside web and storage services. To assess its marketing strategy, we will employ the corporate strategy framework as outlined in Cravens & Piercy's Strategic Marketing text. This framework encompasses the corporate vision, objectives, resources, business composition, and design. Furthermore, we will delve into Amazon's marketing strategy, conduct a SWOT analysis to identify current issues and opportunities, and provide strategic recommendations for its sustained growth.
In today's competitive landscape, a successful organization must not only embrace a market-driven strategy but also cultivate creativity and innovation to thrive globally.
Amazon.com, Inc. stands as an exemplar of a company that has redefined retail through its pioneering e-commerce approach, leveraging the power of the Internet. In this essay, we will scrutinize Amazon's corporate and marketing strategies, examine its vision, objectives, and resources, and elucidate its journey from an online bookstore to a comprehensive virtual marketplace.
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Furthermore, we will explore the challenges it faced, such as financial difficulties, and how it leveraged strategic business units and strategic relationships to maintain a competitive edge. Crucially, we will delve into Amazon's innovative marketing techniques and its customer-centric approach, highlighting the company's customer service excellence and strategic partnerships. Lastly, we will underscore the significance of creativity and innovation in Amazon's strategy and elucidate the opportunities that lie ahead for this e-commerce giant.
Jeff Bezos, the founder of Amazon.com, articulated a visionary goal in the summer of 1994 when he observed a staggering 2,300% yearly growth in Internet usage.
Bezos envisioned creating "the earth's biggest online retail store, where everyone could buy anything and everything." His market research led him to establish Amazon.com in 1995, initially focusing on selling books online. The company's rapid growth was evident when it reported sales revenues of $110 million by the first quarter of 1996. However, Amazon.com's ambitions extended beyond book sales, and it swiftly diversified into various markets, including music, movies, electronics, toys, apparel, and grocery.
One significant development in 2006 was the introduction of Elastic Compute Cloud (EC2), offering cost-effective computing power over the Internet. While some questioned this departure from Amazon's core vision, it was, in fact, aligned with the company's philosophy of constant innovation. Bezos' strategy was to match capabilities with market opportunities, allowing Amazon.com to compete across diverse markets and create barriers to competitor duplication.
Despite financial challenges and increasing debt, Bezos remained resolute in his belief that investments in technology and innovation would yield substantial returns in the future. Amazon.com's strategic business units (SBUs) played a pivotal role in the company's structure, focusing on key divisions such as U.S. Books/Music/DVD/Video, U.S. Electronics, Tools, and Kitchen, Services, and International markets. This composition allowed Amazon to tailor specific strategies for each unit and capitalize on diverse market opportunities.
Amazon.com's unique business model has been a source of competitive advantage. The company combines convenience, speed, reliability, discounted pricing, and a vast selection of merchandise. This synergistic business design has created a seamless and differentiated shopping experience that is challenging for competitors to replicate.
One of the cornerstones of Amazon.com's marketing strategy is its customer-centric approach. The company prioritizes customer value by offering lower prices, free shipping, 24/7 customer service, personalized recommendations, and customized web pages. This emphasis on customer service has fostered customer loyalty, increased website traffic, and boosted repeat purchases. Amazon.com employs various marketing techniques, including online advertising, email campaigns, and the Associates Program.
The Associates Program, allowing external websites to make products available to Amazon customers, has been particularly successful. It has enabled Amazon.com to expand its market reach beyond its own website while focusing on its strengths in order fulfillment and distribution. Additionally, Amazon has established strategic relationships with traditional retailers, such as Toys 'R' Us, the Gap, and Drugstore.com, which enrich the value offerings to customers and enhance the company's competitive position.
Creativity and innovation have been instrumental in Amazon.com's marketing strategy. The company was recognized as one of the world's 25 most innovative companies in 2008. Key to Amazon's innovation strategy are principles such as measuring everything, keeping development teams small, embracing unconventional ideas, collaborating with outsiders, and closely observing customers rather than competitors.
Amazon.com stands poised to capitalize on various opportunities in the e-commerce marketplace. These opportunities include emerging trends and technological advancements. Notably, Amazon has made significant strides in the digital e-book market through its Kindle product, positioning itself well in this growing market segment. The company can further invest in technology to ensure sustained profitability as e-commerce continues to grow.
E-commerce, as a whole, is on an upward trajectory, and Amazon.com is well-positioned to benefit from this trend. The company's existing infrastructure, which includes payment security, one-click payments, and user-friendly features, poses a challenge for new web-based businesses attempting to compete. Moreover, strategic alliances and acquisitions can be leveraged to expand Amazon's market presence further.
However, Amazon.com faces marketing problems, particularly during peak seasons when high website traffic can lead to system interruptions, potentially affecting fulfillment and delivery timelines. Additionally, the company now contends with competition from established traditional retailers like Wal-Mart and Barnes & Noble, who have expanded their online presence, leveraging their brand recognition and customer base.
To address the challenges and maximize opportunities, Amazon.com can consider the following strategic recommendations:
Amazon.com's journey from an online bookstore to a global e-commerce giant is a testament to its visionary founder, Jeff Bezos, and its commitment to innovation and customer-centricity. The company's corporate vision and objectives have evolved to encompass a diverse range of markets and services, driven by a culture of creativity and innovation. While Amazon.com faces marketing challenges, it is well-positioned to capitalize on emerging opportunities in the dynamic e-commerce landscape. By implementing strategic recommendations and building upon its strengths, Amazon.com can continue to shape the future of online retail and maintain its status as a pioneering force in the industry.
Evaluation of the Marketing Strategy of Amazon Company. (2016, Oct 18). Retrieved from https://studymoose.com/amazons-marketing-strategy-essay
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