LASA 1—Preliminary Strategy Audit
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crowesl_m1_a3.docxRunning head: MARKET POSITION ANALYSIS 1
MARKET POSITION ANALYSIS 4
Sherry L. Crowe
Argosy University
B6028-T A01 Capstone Experience in Integration & Strategy
Module 1, Assignment 3
Dr. Wan
March 23, 2016
This market position analysis is an assessment of the value proposition and the competitive advantage of Amazon.com, an effort to provide insight into its product portfolio. Amazon.com is the largest internet retailer that is based in the United States. The company’s products range from electronics, electronic books, media (movies and music), games, groceries to home bases items like toys and the like. The company was founded in the year 1994 and its headquarters is based in Seattle, Washington. This information was acquired by means of an interview with an anonymous senior level manager in the company.
The first issue under scrutiny during this interview was the target market. Amazon.com was once the world's largest bookseller. The company therefore targets customers globally. It internet presence has proved to be a crucial asset in terms of how it advertises, sells and distributes its products worldwide, It is, therefore, able to penetrate and reach the most of the local markets in the world.
The company strives to achieve its main objectives by being the most customer focused company in the whole world. The company is therefore driven by obsession in its customers instead on focusing on its competitions, innovation, and successful, efficient operations. Amazon has two major segments i.e. the Northern American segment and the international customer segment. The company is therefore basically managed on a geographical basis. Its presence in the two segments is therefore facilitated by operations headquarters that oversee the company’s operations.
Amazon focuses on product selection, price, and convenience. The company has established internet platforms that enhance its convenience by enabling the sale various unique products by either the company or third party retailers. The products are very diverse and are available under various categories to enlarge the consumer base. Consumers, therefore, access these products through these internet platforms and Amazon applications that are at their disposal. The company strives to offers its customers the lowest possible prices by pricing its products on a daily basis with regard to market fluctuations. It also offers the consumers affordable shipping deals. An example of this is a membership program that is offered by Amazon Prime annually. The program entails free unlimited shipping and free streaming services for digital content or free access to the Kindle device.
The company is very competitive and aggressive in its strategic management. It, however, faces competition from physical retail stores all over the world, vendors and the producers of its products. It also faces competition from other electronic commerce parties and companies that sell digital content through the internet and other online retailers. Media companies and online media portals are also becoming very crucial competitors.
Amazon focuses on product selection, price and the convenience of its delivery systems. It achieves convenience through its retail web services i.e. Amazon.com and Amazon.ca. The online retail store also partners with third-party entrepreneurs through the establishment of programs that allow them to sell their products on these websites and their sites.
The modern man is a being of very sophisticated tastes and needs. Product differentiation is a strategy that is aimed to capitalize on these sophisticated needs and at the same time increase the market size by enhancing the consumer base. This, Amazon achieves by ensuring that every particular need is addressed by stocking goods from various producers, various brands, and quality.
Amazon draws its competitive advantage from two main ideas i.e. its strategy and its brand. The founder of Amazon, Jeff Bezos created an ingenious strategy which he referred to as the cunning plan. The ingredients of this plan include the diverse choice of products, the reliability, speed and the superiority of the company's service to its customers. With the aid of this strategy, Bezos broke through the industrial mindset of the market by providing the customers with the ability to browse through make orders and receive shipments of the purchased products at their convenience.
The other crucial ingredient of the cunning plan from which Amazon draws its competitive advantage is its brand. As Bezos visualized the venture, he dreamed of a worldwide retail network. He wanted his venture to be like the Amazon River. The company is however not only interesting as a result of its competitive advantages. This is because it has an impeccable marketing strategy. The strategy has it that the company’s products offer a very superior value to the customers, with a price premium that is very definite (Jay, 2013).
At the moment, Amazon has dominance over the digital market that the possibility of another online store knocking off its game is very slim. The fact that the company enjoys very substantial economies of scale gives it the power to offer the lowest retail prices. The company is also extremely networked throughout its two major segments through a series of warehouse and delivery systems. It also has a massive base of credit card subscribers that make it next to impossible to compete with the retail store.
References
Amazon.com Inc. (2014). Retrieved March 23, 2016, from http://www.annualreports.com/Company/amazoncom-inc
Grundy, T. (2015, May 29). The source of Amazon’s competitive advantage. Retrieved March 23, 2016, from http://www.accaglobal.com/za/en/discover/cpd-articles/business-management/amazon-flow.html
