marketing strategies

6

Company: AMAZON

Milestone: 1

Introduction

Amazon Inc. is an American multinational corporation that deals with e-commerce, digital streaming and cloud computing. The company’s headquarters is at Seattle, Washington, USA. Amazon is ranked as the best e-commerce platform globally, having the biggest market share in the industry. Amazon was founded by Jeff Bezos in July 1994. It started off as an online platform for selling books but later advanced to sale of diverse products including apparel, games, food, jewelry and toys. Over the years, Amazon has been making advancements in its business. In 2017, the company acquired the whole foods market thus increasing its competitive advantage in the industry. Amazon operates in a highly competitive e-commerce industry, having an average annual revenue of $386.064 billion.

Amazon’s Competitors

Amazon operates in a competitive e-commerce industry. With the current trends and advancement of technology, many investors are taking the path of e-commerce. Investors view e-commerce as a potential investment with positive benefits. Amazon’s main competitors are the big corporations operating in the e-commerce industry and those offering subscription services. The e-commerce competitors include include Walmart, Target, Best Buy, Costco, JD, Otto, Alibaba Group. Competitors offering subscription services include Netflix, Google and Apple. Amazon’s competitors can be classified into three general groups namely online stores, physical stores and third party sellers (Onyusheva & Seenalasataporn, 2018).

Amazon’s diversification has helped the company acquire a larger market share than its competitors. The company’s services are differentiated from other companies thus attracting more customers. Having a larger market share than its competitors has gained Amazon a competitive advantage in the industry. As of December 2020, Amazon had reached a market capitalization of $1 trillion, which was higher than that of Amazon’s competitors.

Consumer Benefits

With the ever-changing e-commerce market, the most important aspect is to remain in business is to become innovative. In this industry, there is no company that has managed to build its brand around the customer such as Amazon. Jeff Bezos majorly aimed at integrating customer needs in the company’s vision (Onyusheva & Seenalasataporn, 2018). In the recent years, considering customer feedback, Amazon established a membership only delivery service called Amazon Prime. This service has enabled customers to download music, access unlimited cloud storage and free delivery of purchased items to the required destinations.

Jeff Bezos has put his focus on customers’ needs while making innovations. Amazon offers fat and hassle free online ordering and delivering services. Based on browsing history, customers can easily choose products and get the best deal. To understand the customer experience, analytics from the company’s website are used in improvement of services. Regular has regular interactions with customers by a non-intrusive satisfaction surveys. Through this surveys, Amazon is able to make the necessary changes so as to meet customer needs thus making their services better. The customer service at Amazon is outstanding. The staff at Amazon are trained on good customer service and how to handle different situations. This makes it simple for customers to get services as make purchases thus increasing customer loyalty. This is because customers will go where they get the best services.

Amazon focuses on quality over quantity. Amazon’s services and products are of high quality (Onyusheva & Seenalasataporn, 2018). Customers always prefer high quality which will give them the highest utility. Amazon makes sure that the quality of its products and services meets the expectations of its customers. While most of its competitor companies have similar services and products as Amazon, Amazon focuses on differentiating its services to a high quality to beat its competitors. Amazon also offers fair prices despite the high quality products and services, which makes it more affordable than its competitors. Through these factors, Amazon has managed to acquire a larger market share than its competitors thus an increased competitive advantage.

The Policy Gap

Amazon experiences a policy gap. This gap gives a reflection that the management incorrectly translates the service policy into working rules for the company’s employees. This creates a tough working condition for the employees. Most employees at Amazon do not clearly understand their roles since the management mixes up roles without considering role definition. Being an online platform, most activities are not physically handled. Employees tend to offer services that they are not required. For instance, an accountant answering to customers’ queries on product availability which should be handled by the sales representatives.

Amazon also experiences a policy gap in consumer expectations. There is misinterpretation of consumer needs which leads to production of poor service design, poor maintenance and poor service delivery to customers. Amazon therefore lacks standardization which could make customers seek the same service at a better quality elsewhere.

Conclusion

From the discussion, it is clear that Amazon is an advanced company. To improve on its service delivery, it is important for the management to work on its policy gap that exists as a loophole. This gap can be used by competitors to beat Amazon in the market.

References

Onyusheva, I., & Seenalasataporn, T. (2018). STRATEGIC ANALYSIS OF GLOBAL E-COMMERCE AND DIVERSIFICATION TECHNOLOGY: THE CASE OF AMAZON. COM INC. The EUrASEANs: journal on global socio-economic dynamics, (1 (8)), 48-63.