Amazon’s Management Strategy
Alexia Huesgen
Champlain College
MSEL-525
Professor Haggery
September 12th 2021
Amazon’s Management Strategy
The Golden Circle is a simple business concept that brought a significant impact to the business world. It is the reverse of the conventional business mentality which followed the order of How-What and Why. Most successful business runs their businesses by first coming up with an idea of what they wish to do. Next, they find a way of doing to it and based o the information generated, they start to tell people their reasons for engaging in the business. In this essay, I will explore the Golden Circle for Amazon. Just like other big Companies, Amazon has a business’s strategy that can be explained by their What, HOW and Why.
Over the years, Amazon has been successful in its business promotion strategy and the “What” for Amazon is the strengths for the businesses. One of the strengths is data: Amazon obtains a large pool of data on its consumers. Afterwards, the Company uses the data collected to enhance its product offering and operations. Nonetheless, the Company sells the data obtained from customers to advertisers through an DSP program. The second strength for Amazon its prime membership: The Company provides loyalty to some of its prime members and customers love the Company for that.
Worldwide recognition is another strength that Amazon holds. As a result, the Company has a potential to influence all new market it penetrates. The Company is able to leverage itself globally hence posing threats to emerging markets. Logistics is also one of Amazon’s strengths because the Company has superior logistics systems when compared to other worldwide retailers. Amazon has evolved from using the distribution centers close to large cities to advanced robotics to improve efficiency. Lastly Amazon’s agility has enabled it to thrive in competitive market because it can make quick decisions.
Furthermore, the built-in systems at Amazon allow the Company to maintain fast and flexible teams. The “How” for Amazon relies on the technologies used by the organization to understand their consumers. Some of the technologies used include the Amazon Alexa and Echo which is beneficial to both the Company and the consumers. The “Why” for Amazon is its goal: to be an outstanding consumer-centric organization across the world. All of Amazon’s steps are designed to serve clients as humane as possible.
Amazon has unique performance management techniques that allow it to stay ahead of the game. One of the is the white paper process and it applied during employee motivation. The HR personnel Amazon stress on the importance of communicating the mission, vision and values of the Company to employees. As a result, employees work hard because they feel connected to the Company’s purpose. Amazon requests employees to write a paper and when they fine a new service or business idea they consider it. For all organizations, how the organization performs depends on the successes and accomplishments of employees.
Amazon’s “Why” responds to a high purpose beyond profit alone. The Company’s mission has been a success because in the past 25 years, the Amazon has brought various innovations that have changed e-commerce (Specialist, 2021). In addition, profits have increased by a great magnitude because consumers perceive that Amazon is the only online retail platform to shop for everything and anything. Amazon’s success comes down to focusing on the consumer and offering great experience consistently.
I would assess Amazon’s focus and current strategic efforts by conducting a scan for the internal and external environment. The benefit of an environmental scan is that, I will be able to know the Company’s operating environment. The environmental scan is otherwise known as the PEST analysis and it includes the economic, technological, social and political environment. The scan may also include the legal and ecological trends. Also, I can assess Amazon’s strategic and current efforts by looking at the strategies issues critically. The aim of analyzing the strategic issues is to ensure that Amazon and its employees do no lose focus as they delve deeper into details and data. A SWOT analysis might play a significant role in analyzing the strategic issues. Conducting a competitive analysis would be another step to assess Amazon’s strategic issues because it help to track every move from the competitors and know how the Company should react. Still, I should what competitors offer and what they do not offer to Amazon’s potential customers.
Amazon balances exploration vs Exploration by adopting the most appropriate execution and strategy for every step of the businesses. For Amazon, it means securing long-lasting market positions through differentiation and cost leadership (Hobcraft, 2021). Also the Company cultivates adaptive capability because their external and internal environment can sometimes be unpredictable. The Company tries as much as possible to minimize excessive reliance on prediction and planning and instead learn how to amplify, vary and select. Finally, Amazon has mastered the art of shaping capability. Big Companies should recognize this art as well because it can help them to reshape their collaborative systems and industries. However, shaping a Company capability requires technological credibility and large customer base.
References
Hobcraft, P. (2021). Balancing Exploitation and Exploration to Improve Performance. Blog.hypeinnovation.com. Retrieved 13 September 2021, from https://blog.hypeinnovation.com/balancing-exploitation-exploration-for-changing-
Specialist, P. (2021). The Golden Circle: How Payline is changing payments. Payline. Retrieved 13 September 2021, from https://paylinedata.com/blog/payline-the-golden-circle/.performance.