Category: Analysis Essay
Strategic planning describes an organizational activity which helps in setting up business priorities, focusing resources and energy, strengthening business operations, securing the commitment of stakeholders including employees, establishing common grounds and agreements around certain business goals, and adjusting and assessing the direction of an organization as it responds to organizational changes. The Amazon.com Incorporations strategic plan describes disciplined efforts which help to produce fundamental actions and decisions able to shape and guide the organization, the customers it serves, the operations it is involved in, and why it does those operations. The companys strategic planning process over the past years have Shown all the qualities of an effective strategic plan. The ability of the company to establish an effective strategic plan enables it to articulate the direction of the organization as well as all the needed actions, which solidifies its progress and success.
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The following paper describes some elements of Amazons strategic plan. The environmental analysis is accomplished through SWOT analysis, which provides significant insights into both the internal and external markets. The strategy also provides additional information about the companys market niche, product portfolio, corporate strategies, business unit strategies, and operational strategies. It is also important to describe the factors which affect the selection and implementation of the companys strategies, the relationship between the companys strategies and policies. The company has managed to establish a strong strategic plan which is supported by its internal strengths and external opportunities, its unique market niche, along with its strong corporate, business, and operational strategies.

SWOT Analysis

Company Strengths

Weaknesses

1. The company has one of the worlds largest online portfolios

2. Strong presence in e-books

3. Strategic acquisitions and collaborations

1. The Amazon company has been engaged in a lot of patent infringement lawsuits

2. The companys cloud computing as well as web hosting services have experienced frequent outages.

Opportunities

Threats

1. Growing trend towards online display advertising

2. The market has been registering a significantly higher demand for cloud computing services

1. The Amazon.com Incorporation runs the risk of enduring frequent fluctuations of foreign exchange.

2. The company is also under pressure to collect and remit taxes through the sale of its online merchandise.

3. Intense competition

 

Strengths

Amazon is currently the worlds largest online retailer after recording revenues of $135,987 million while its closest competitor, eBay, recorded $8979 million sales in 2016 (SEC, 2016). The company has an operating model which enables it to quickly turn its inventory, thereby helping it to generate more revenues. The format also enables the company to improve its customer satisfaction levels. The companys strong presence in e-Books provides it with a competitive advantage over its peer group while also enhancing the revenues.

Weaknesses

The companys patent infringement issues have continued to the confidence of shareholders. Amazon.com Incorporation is under investigation over a series of infringement of patents. These have continued to affect the companys brand image (MarketLine, 2017). The company has also experienced frequent outages in its web hosting ad cloud computing services. These frequent outages can lead to significant loss of confidence among the business customers.

Opportunities

The online advertising business has been gaining increasing recognition and emphasis over the past years. Such changes and dynamics are expected to enhance the growth of the companys top-line operations. Customers have also shown particular increased interest in cloud computing services. This will enable the company to leverage its demand for the cloud based computing services, which can further expand its business reach.

Threats

There is an increasing pressure on the company to collect taxes on sales it makes online. This may put the companys pricing strategies at a competitive disadvantage. The company also faces the risk of foreign exchange fluctuations. This might cause significant gains or losses in the companys revenues.

Niches

The Amazon.com serves its customers in a retail web marketing niche with a focus on convenience, selection, and price. The company designs its website to ensure millions of products is sold. Operating in online market niche enables the company to save on operational costs, thereby improving its profitability margins.

Portfolio

Amazon.com has one of the largest online product portfolios. The company has a myriad of products and services, all of which are retailed through online channels. The companys products can be broadly classified into books, movies, electronics and computers, home and garden tools, health and beauty products, kids and baby toy products, clothing and shoes, handmade products, automotive and industrial, and amazon music. The Amazon Music products can be further classified into Amazon Music, Prime Music, and open web player. The Amazon automotive and industrial products can be further classified into automotive parts and accessories, motorcycle and Power sports, automotive tools and equipment, industrial supplies, and janitorial and safety products. The home and garden tools can be classified into fine art, pet supplies, kitchen dining, home improvement supplies, hardware, and power and hand tools among many other products.

Corporate Strategies

The Amazon.com Incorporation operates a concentric diversification strategy. A concentric diversification corporate strategy is one which involves leveraging the capabilities of technology to ensure business success by following a cost leadership strategy which aims to maximize value for the customers. The company concentrates its business around its customers by providing an online portal where they can do their shopping. This strategy has propelled the company to greater heights, which explains the fact that it is the worlds largest online retailer. The companys corporate strategy of concentric diversification is controlled by its sources of competitive advantages. The companys corporate strategy is also established around the convenient aspect by providing convenience to the customers when they can simply go the companys website and make purchases that are then delivered at their doorsteps.