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Marketing Plan for Company AZ

Komal Salim

Background information

AZ is an internet retailer firm founded in 2005. The company has its headquarters located in Seattle, Washington D.C., in the United States of American. The company has other stores located in different parts in Europe and Asia. AZ offers a wide range of household goods and services ranging from electronics and furniture to many other goods. Company AZ seeks to offer a wide range of products to its clients at the most convenient way possible. It is a one stop shop where customers are able to purchase different types of goods and services without having to worry about missing a single product. The company 150 stores located in strategic locations across the globe to ensure first shipping of orders to its products. Its offers a one to two day delivery period for customer orders to ensure that customers get their products within the shortest time possible. AZ uses trucks, airplanes, and vans to ship goods to customers. In addition, it also relies on logistics companies such as DHL and FedEx to ship goods to its clients. AZ does not manufacture its own products but rather relies on third party sellers and suppliers who list their products on the AZ ecommerce website. There are more than 5000 sellers registered in the website offering different types of products. AZ keeps an updated inventory to ensure that enough products are available for customers. Sellers ship their products to AZ fulfilment facilities across the globe and AZ takes care of storage cost and shipment of products to customers.

Company AZ has 20,000 employees and in the financial year 2019-2020, the company recorded the highest net sales of $50 million. The high sales were recorded following the effects of COVID-19 that led to closure of physical grocery stores and customers were forced to move to online shopping. The purpose of this paper is to analyze the short term and long term goals of company AZ, the environment in which it operates, and SWOT analysis of the company.

Mission statement

The mission statement of AZ is to transform how sellers market, sell and operate in order to improve their efficiency by providing technological infrastructure and marketing reach by providing the needed logistics infrastructure.

Vision statement

AZ pursues to ensure that customers can make orders and have their products delivered in the most efficient and effective manner without any delay. We place our main focus on customer satisfaction by offering high quality goods and services that super pass customer’s expectations.

AZ short goals

One of the primary short goals by AZ is to integrate technology in its operations to cut on operational costs and maximize on outputs as well as revenues. In the modern digital era, technology plays a very critical role in business operations. Adopting the right technology increases efficiency and ensures seamless operations. Furthermore, technology cuts on production costs. The company seeks to invest in innovation research to implement technological innovations that increase productivity efficiency while cutting productivity costs.

The last short goal by AZ is to ensure that it has the most skilled and knowledgeable employees onboard. The firm seeks to implement career development programs to support employees to further their skills and knowledge. Having the most competent employees is directly linked to employee productivity. If employees possess the right skills and their duties and responsibilities, they become motivated in doing their work. In addition to career development program, the company seeks to ensure that it hires the most talented and competent. The success of an organization is largely dependent on the type of talents it hires.

Long-term goals

AZ’s long term goal is to become the world’s leading internet retailers in offering high quality services to our customers. The company seeks to build one of the strongest brands in ecommerce in the world through leveraging technology to offer efficient and effective services to the customers. The company continues to invest in technology to improve overall customer experience with the main objective of creating customer loyalty. The company seeks to increase the total revenues by 10 percent in the next two years.

AZ seeks to make sales and marketing a priority. Currently, the company operates in the United States, Europe and Asia. The company seeks to expand its number of stores to nearly 75 percent of the total countries worldwide. This will ensure that the company commands a significant percentage of market share. In addition, expansion would bring goods close to the clients thus enhancing fast and efficient delivery. Expansion of stores comes in hand with marketing. The company seeks to invest in marketing to attract a large customer traffic to its online shopping website. This will involve use of mobile marketing strategies such as in-game advertising, social media marketing, and geofencing marketing.

The last long-term goal is to increase website traffic by at least 40 percent in the next two years. The company invest in artificial intelligence to analyze website traffic as well as the behaviors of visitors to the website. With this information, the company will be able to understand consumer purchasing patterns as well as products that are mostly searched in the website as well as location of visitors. This information would be very critical when it comes to market segmentation.

There are several metrics that can be used to measure the effectiveness of the short term and long term goals. For instant, customer growth is a key performance indicator for evaluating the success of a business. An increase in the number of customers that shop on AZ website for a given period of time would imply that the company is attracting new traffic to its website. Another indicator of growth is the expansion or penetration by AZ into new developing markets. If AZ increases its number of stores across the globe. The major KPI for short-term and long term goals is the revenues accrued in a given financial year. Increase in revenues would indicate a positive progress towards achieving organizational goals.

Environmental analysis

Competition

The internet commerce industry has witnessed significant growth in the recent years. Regardless of some fluctuations in the global economy following the COVID-19 pandemic, the ecommerce industry has remained favorable for growth. The United States and China stands to be the largest e-commerce markets (International Post Corporation, 2016). However, the two markets are significantly competitive for internet retailers, especially small to middle sized ecommerce companies. AZ operates in a very competitive environment. There are several internet retailers in the world offering stiff competition to each. Amazon is the world’s largest internet retailer and it has dominated the market making it hard for other internet retailers to thrive in the market. AZ faces stiff competition from Amazon, Ebay and Alibaba. Alibaba is the leading internet retailer in the Asia Pacific religion and thus AZ faces significant competition from the Asian ecommerce giant. Also, apart from Amazon, Alibaba and Ebay, there are other important players in the retail market such as Walmart, Target, Best Buy and Fipkart, which offer significant competition to AZ (Pratap, 2017). The retailers with physical presence such as Walmart and Target offer immense competition to internet retailers.

Political factors

Despite the fact that political threats may not be the same for the internet retailers as they are for physical retailers, there are still a couple of political hurdles than impact internet retailers. Global leaders in ecommerce such as Amazon and E-bay growth in Asia region can negatively be affected by the Red tape (Pratap, 2017). AZ is not exception from the Red tape and any other internet retailer operating in the Asia Pacific region. Research shows how Red Tape in India has significantly affected businesses trying to extend their presence there. The political and regulatory challenges around internet businesses keep evolving. The growth of internet commerce in the European Union has been also affect by political factors. The region keeps targeting technology companies such as Google, Amazon and other U.S technology companies. Political factors can significantly affect the growth of an ecommerce in countries that have imposed ecommerce Red Tapes.

Economic factors

The COVID-19 pandemic has significantly affected the global economy. Following the lockdown and cessation of movement measures, many businesses have closed down resulting in massive layoffs. Unemployment has contributed to less income and thus less disposable income among consumers. Despite the fact that closure of groceries and retails stores have forced people to shift to online shopping, customers do not have enough income to spend on shopping due to the pandemic and thus they are only spending on basic commodities. During recession periods, spending decreases. During the pandemic, people have adopted cost cutting measures as the level of economic activities and employment have gone down. Economic fluctuations affect internet retailers just like any other business. It affects both global and local businesses (Pratap, 2017). Higher economic activity means fast growth and higher revenue for the internet industry while lower economic activity implies the opposite. The pandemic has led to lower economic activity following the lockdowns and cessation of movement hence slow growth and low revenues for most internet retail businesses. This way, economic factors have direct and deep impacts on the internet retail industry.

Sociocultural factors

Sociocultural factors have an immense impact on the internet commerce industry. Majority of ecommerce firms are more successful locally than in foreign markets. For example, AZ has been successful in the United States as compared to foreign markets especially in Asia. On the other hand, the growing use of technology has had more impact on the ecommerce. Mobile technology has widely be spread and a significant number of people in the world are now using mobile devices for shopping. This has increased expansion and growth of internet commerce business (Pratap, 2017). Also, sociocultural factors affect how businesses market themselves. For instance, the United States market requires a different marketing approach from the one used in the Asian market. This is because the two markets have different socio cultural practices and values.

Technological factors

Technological advancements have significantly shaped how internet retailers do business. It has made it possible for internet retailers to carry out their operations in seamless and efficient manner. Every aspect of ecommerce business is based on technology from sales to customer service. All internet retailers are in a race to be ahead of their competitors in terms of technology so as to create a competitive advantage (Ramaiah, 2019). For instance, Amazon is currently working on introducing drones in its supply chain to help in delivery of customer orders. Currently, it uses robots in its fulfilment centers to help in picking and packaging of customer orders. The reason why Amazon is ahead of other internet retailers is because it has been able to invest significantly in technology. Ecommerce companies are using artificial intelligent technology to analyze the purchasing behaviors of the clients by collecting and analyzing data on how website visitors interact with their site. For example, if majority of queries on the ecommerce website are about electronics, and ecommerce company will know that electronics are on demand. In addition, web analytics is able to identify visitors by the location. As a result, an ecommerce business is able to understand the location where majority of its visitors are coming from. This information is important in informing decision making such as were to establish new fulfilment centers.

Legal factors

Legal compliance is an important for businesses globally. Internet industry is no exception. A tussle with the law can have devastating on internet brands, which can become a target if they do not take care of compliance. Before expanding to any foreign region, an ecommerce business has to ensure if the foreign country has favorable regulations for conducive operations. Most of legal frameworks are concerned about environmental sustainability and labor. Different countries have different laws in regards to labor and environmental sustainability. Therefore, ecommerce firms are required to be aware of the legal framework of the country they operate in and how they might affect their business operations.

AZ SWOT Analysis

Strengths

· No geographical limitation: AZ like any other ecommerce business can operate in any part of the world as there is no specific boundary required. AZ can expand to a global level.

· AZ has a strong brand name making it to stand out in a competitive ecommerce market

· AZ has a large number of third party sellers which helps AZ to effectively manage its inventory.

· AZ has effective logistics and distribution systems.

Weaknesses

· Ecommerce business is an easily imitable business model and this it other for competitors to copy the model.

· Ecommerce has limited brick and mortar presence.

· AZ has thin profit margin so as to sustain its cost leadership strategy.

Opportunities

· AZ has the opportunity to penetrate or expand operations in developing markets.

· Technological advancements offers AZ an opportunity to integrate technology into its operations.

· AZ has the opportunity to manufacture its own products and reduce its over reliance on third party products.

Threats

· AZ faces immense competition from ecommerce giants such as Amazon, Ebay and Alibaba.

· Government regulations can significantly threaten operations of AZ in some critical countries such as Iran, North Korea and other countries with political instability.

· Imitation is very easy creating an opportunity for new entrants in the market.

References

International Post Corporation. (2016). States of e-commerce: global outlook 2016-21. https://www.ipc.be/services/markets-and-regulations/e-commerce-market-insights/e- commerce-articles/global-ecommerce-figures-2017

Pratap, A. (2017). PESTEL analysis of the E-commerce industry. https://notesmatic.com/2017/11/pestel-analysis-e-commerce-industry/

Ramaiah, K. (2019). Impact of technology on E-commerce industry. https://www.entrepreneur.com/article/326982