Was Written on June 07 2020 for MBA 512 Strategic Management Class at Stony Brook University
Discussion Question #1
How would you define Amazon’s industry? What difficulties do you encounter in identifying primary competitors and key lines of business?
Amazon’s industry is E-Commerce, the idea of buying goods online (Parnell, 2017). Amazon has a complex set of distribution centers, their own delivery company, larger selection as well as their line of “Amazon Basics”. Amazon also works with Zappos, ToysRUs, and Whole-Foods (which completes the grocery aspect of online shopping) and more. Amazon is unique because it’s a “one-stop-shop” for every kind of product there is (Snap Agency, 2018). This feature makes it hard to identify competitors for Amazon because there is nothing in the US that is comparable. There isn’t a store where by going to one place, a person can get everything they need.
There is a lot of competitors that do sub-sections of what Amazon does, but there isn’t a company in the U.S that does everything, the way Amazon does. The closest competitor in the U.S is Walmart which has a similar footprint but not a similar infrastructure. Internationally, the closest competitor is “Ali Baba” which is highly popular in China and not very popular in the U.S.
The dominance of Ali baba in China is one of the reasons Amazon hasn’t made its way there as strong as it did in other countries.
Discussion Question #2
There has been a general trend toward “bricks and clicks”—the combination of Internet and traditional retailing outlets. How has Amazon succeeded as an e-tailer without brick-and-mortar operations?
Amazon is doing an incredible job at staying dominant and relevant and that is why it succeeded at competing with physical stores. For example, Amazon Kindle, which includes a large online book library. Amazon Music, and Amazon Video (Amazon.com, 2020). The most important of it all is Amazon Prime which allows members to receive quick deliveries (as short as same-day delivery), streaming benefits, easy returns, and additional shopping benefits. Prime Wardrobe, for example, allows members to receive clothing articles in the mail, return the items that did not fit, and only pay for the items kept.
The easy navigation, simple use, and useful shipping/ return policies are what makes Amazon so convenience and outperform physical stores.
Discussion Question #3
Given its Internet base, can Amazon’s success be easily duplicated by copying its web materials? If so, why has Amazon been so dominant in recent years?
In my opinion, Amazon cannot be copied successfully. That is because it keeps developing and improving, constantly adding more features and values that kept Amazon dominant. For example, up until 2019, FedEx was the main carrier delivery company to work with Amazon. However, in late 2019 Amazon switched from a third-party delivery company to create its own delivery company. Amazon also created its streaming services and manufactured its line of products with the Amazon brand. By creating its brand, the company is selling less of other companies’ products.
Personally, I think there is only a matter of time until Wholefoods become irrelevant to Amazon, because Amazon will start selling its own brand of grocery goods. Then, Amazon will no longer work with Wholefoods, similarly to what happened to the Amazon partnership with FedEx.
Discussion Question #4
With myriad websites that offer price comparisons that exist for books and other e-tailers (e.g., www.bestbookbuys.com), is it possible for Amazon to maintain a strong customer base without an extreme emphasis on low prices?
Absolutely. Amazon can maintain a strong customer base by offering value to its services. For example, specifically in the books industry Amazon can offer online books, an unlimited library for a flat subscription rate, and more selection. Amazon can also serve its customers better by giving better book suggestions, identifying books that are relevant to one’s origin and interest, and market using a different approach. Amazon approaches can include – books from local communities, and environmentally friendly solutions to reading, and discount membership to students/elderly, etc.
References
Amazon.com. 2020. Amazon.Com Help: About Amazon Prime. [online] Available at: <https://www.amazon.com/gp/help/customer/display.html?nodeId=201910360> [Accessed 6 June 2020].
Snap Agency. 2018. 7 Reasons Why Amazon Is So Successful | Snap Agency. [online] Available at: <https://www.snapagency.com/7-reasons-why-amazon-is-so-successful/> [Accessed 6 June 2020].
Parnell, J., 2017. Strategic Management: Theory And Practice. 5th ed. The University of North Carolina at Pembroke: Academic Media Solutions.