Strategic Operational Management For Modern Business World - Amazon Inc. Essay.

Describe about the Strategic Operational Management for Modern Business World.

A growth in the modern business world has successfully gained the attention of organizations in terms of undergoing and adapting to the developing conditions. According to Brown, Bessant and Lamming (2013), as compared to business companies, online marketing firms greatly depend on the world and responsive strategies. One of the most important aspects that are emphasized by managers is the formation of highly effective policies. Further, administrators in an enterprise are greatly involved in monitoring the several factors and implementing strategy changes. 

For this particular project the famous retailing company Amazon Inc. has been taken into consideration. The report primarily focuses on a condition of strategic change. In additional to a general discussion on the topic, the external and internal analysis greatly contributes in towards the development of new strategies. Also, a SWOT table, action plan, timeline application and its implementation has also been included in the project. Further, a list of recommendation adds up as a positivity to the company`s undergoing alterations.

According to Kantor and Streitfeld (2015), Amazon Inc. is based in Seattle, WA. It was one of the first companies that started to sell goods over the internet. It was founded in the year 1994 by Jeff Bezos, CEO of Amazon.com. The company was launched in the year 1995. At first, they started to sell books online and then with a recognition of the large market scopes moved onto dealing in several other commodities.

With a highly efficient team and an ongoing business base, Amazon finally made it to the list of leaders in the year 2003. This company is now serving around 30 million customers across 150 countries. Although the company faced some problems in the year 2001 due to which around 1200 employees were reduced but with proper management everything came together that resulted in a total income of $64million in 2002 (Resca and Spagnoletti 2014).

Figure: Growth of Amazon Inc.

(Source: Amazon.com. 2016)

Amazon.com Inc.’s mission statement has pushed the company to become one of the largest organizations in the world. With a development in the sustainable world, the firm objects to serve the people with their desired products at a cheap price and also gain stability in the rapidly evolving market (Amazon.com. 2016).

As stated by Slack (2015), the stakeholders of Amazon are considered to be the most important element by the managers. Depending on the presence and contribution towards the organization the wide list can be dived into two parts, internal and external. Further the most influential stakeholders are as follows:

Mission Statement

Table: Stakeholder Types

(Source: Bozarth and Handfield 2016)

Figure: Stakeholders in a Company

(Source: David and David 2016)

In order to know more about the environmental factors, the managers perform a PESTEL analysis to check factors that directly or indirectly affect the company.

Political Factors: The political aspects prevailing in a country greatly affects formation and functioning of strategies in Amazon. Further, a dominance of parties and government interference acts a threat to the company. On the contrary, stability in international relationships provides a large business scope.

Economic Factors: Economical issues in a nation affect strategy development of Amazon. Concerning opportunities, wealth distribution, market mechanism solidity and economical stability the company is able to put into practice policies. Further, inflation rates, alteration in exchange rates and downfall of investments are a threat to the firm.

Social Factors: Operating as an online marketing firm, managers tend to benefit from the arising scopes in the demographic and physiographic market segments (Heizer, Render and Munson 2016). Advancements in lifestyle, population growth and high demands for products prove to be fruitful for business. On the other hand, the cultural trends and fluctuations in the customer perspectives affect performance levels.  

Technological Factors: Advancements in technologies greatly benefit the company. Innovation of new mechanisms, automation and development in the technical factors evolve to be an opportunity for Amazon. On the contrary, high costing shifts and overthrow of the old processes add an extra cost to the final products.

Environmental Factors: A change in the external and natural aspects of the society affects transportation of goods. Moreover, the climatic changes results in a delay of procurement and distribution. In terms of market scopes, the large diversification in distribution channels benefits the firm.

Legal: Operating at the global level Amazon is greatly affected by the domestic and international lawful conduct. A rigid base of rules and regulations leads to a containment of shipping and supplying of goods. Further, organizing of safety and labor laws builds a firm taskforce.

Figure: PESTLE Analysis

(Source: David and David 2016)

The management of Amazon focuses on performing an internal analysis to be able to locate the strength and weaknesses in the organization.

Strengths:

High Investment Capability: Being a large and vastly spread company, Amazon is able to raise financial sources from all over the world. Moreover, the high ability of capital funding enables to firm to not only develop plans but also implement strategy changes (Agarwal and Braguinsky 2015).

Company Stakeholders

Highly Trained Management: With a well-organized team of employees and managers, the company is able to undergo changes at ease. Further, the effective leadership skills and efficiency of the management team facilitates a smooth flow of strategies in the firm.

GLOCAL Policy: The plan of operating as a global firm and acting in a local sense is one of the most affecting factors that prove to be beneficial for Amazon. With a development of new strategies on recognition of changes the well-policy benefits the company.

Simple Organizational Structure: The simple structure of organization contributes towards a smooth flow of information and also facilitates communication among the departments of the company. A positive relationship contributes towards coordination and hence results in a better formation and practice of strategies.

Weakness:

Poor IT Flow: A faulty and downfall in the IT factor of Amazon has resulted in wrong utilization of resources. Damage in long-term obligations has also affected the company over the years. Improper development and poor management of the IT system lead the company to a downfall situation (Grünig and Kühn 2015).

No Physical Existence: Being an online retail company, Amazon has absolute zero physical presence. Also carrying out every function over the net acts as a hindrance to the firm.

Workplace Criticism: A condemnation of the workplace environment also affects functioning of the policies in the company. Moreover, the views and perspectives of the employees also play an important role in the application of strategies in accordance to the external changes and objectives of the firm.

Excessive Stakeholder Interference: As opined by Cummings and Worley (2014), an increased number of ventures and capital rising from shareholders leads to the creation of too many perspectives. Interference by the stakeholders in fields of decision making is an unfruitful solution to the company.

Figure: Organizational Structure

(Source: Iqbal and Sharma 2012)

Refer to Appendix (1)

The following steps are focused by the managers of Amazon for implementing a reactive strategy:

Capability assessment of the company: In order to maximize productive level and perform in a increased practical manner, managers of the company perform an internal and external analysis of the firm to learn about the impacting elements along with focusing on judging the capabilities for strategically implications.

Recognition and recovery of lacking aspects: Supervisors greatly seek expert help in terms identifying the weakness of the firm and thereby apart from utilizing strengths implement several skill and profit oriented strategies in the business framework.

External Analysis

Distribution of allocated resources according to the activities of the strategy: One of the most important steps taken by the managers of the company is to segregate activities and focus on economical distribution of available resources. The supervisors involve in a practical approach while distributing resources.

Creating supportive plans for the newly developed strategies: The management recognizes the need for a support and backup policy for a fruitful strategy implementation. Backups plan a important role in deciding the success of the developed strategy.

Abide by a trial and error method before announcing completion of implementation process: In order to evaluate the fruitfulness of a particular strategy and its affect on a distinct segment, the supervisors check its effect on by applying the strategy on a trial basis for a particular time period. Once recognized as a factor of benefit, the strategy is examined and check ready for use.

Delegating authorities among the management: Furthermore, assigning of jobs and developing authorities among the taskforce depending upon their business knowledge among the company as a whole acts a positive effect.

Develop a sense of responsibility among the taskforce: T o facilitate smooth functioning of the taskforce and operational period briefing for working towards achievement of objectives greatly depends on the sense of responsibly among each member of the company.

Maximizing leadership skills: Leadership skills of managers play an important role in affecting decision making in the company. The participative and transformational conduct of the management greatly impacts and contributes towards tragic implementation.

Employing a parent body to monitor the practice of the new strategies: With a rapid expansion of Amazon in the world, strengths have increasing affected growth. In addition to delegating authorities, managers tend to build up a body of professional to check and monitors practicing of the new strategies.

Ensure a periodical check on the implement policies in every part of the firm: The expert tem checks implementation and performance of the policies in the company.

Prioritizing elements in strategy implantation enables a firm to operate in an efficient and on a distinct path of achieving goals.  The most important priorities of a policy are:

1. Maximize sales revenue
2. Facilitate organizational development
3. Ensure teamwork among the three levels of management
4. Stabilize product and price relationship
5. Lastly, to create sustainability in business and also contribute towards the society.

Table: Action Plan

(Source: As created by author)

Analyzing the upcoming changes in Amazon, there are a number of suggestions that can be made. The following recommendations will prove to be a factor of benefit for the company:

1. In order to survive in developed countries among the tough competition, Amazon needs to work in collaboration with dominant firms.
2. It is suggested that the firm organize training and development programs for the employees.
3. In terms of implementing a new strategy, the managers need to work in accordance to market experts.
4. Concerning the monetary factor, it is greatly recommended that the supervisors collect information from the revised budget and also abide by it.

Conclusion

Analyzing the several aspects of Amazon it can be inferred that the company`s development greatly depends on several fluctuating factors. There also exist several internal and external elements that prove to provide the firm with a vast range of strengths, weaknesses, threats and opportunities. Further, with a change in the strategies of the company it is can be seen that the managers work in cooperation with the employees to be able to implement the changes and also check on its practice.

Moreover, responding to the fluctuations in a positive manner is considered to be an integral aspect of the organization. Scrutinizing the various topics in the report in can be concluded that with a proper and systematic approach, Amazon Inc. can establish a large scale market and also evolve to be among the list of global leaders.

References

Agarwal, R. and Braguinsky, S., 2015. Industry evolution and entrepreneurship: Steven Klepper's contributions to industrial organization, strategy, technological change, and entrepreneurship. Strategic Entrepreneurship Journal, 9(4), pp.380-397.

Amazon.com. (2016). Sustainability-Amazon Products, Business and Initiatives. [online] Available at: https://www.amazon.com/p/feature/o2jsogtxrzhkobv?ref_=aa_bx_3&pf_rd_r=HPZQ2B9K5J6JVMFDBDA6&pf_rd_p=3425aa17-1f7b-4eba-a028-3c2cc42783b7 [Accessed 24 Oct. 2016].

Bozarth, C.B. and Handfield, R.B., 2016. Introduction to operations and supply chain management. Pearson Higher Ed.

Brown, S., Bessant, J.R. and Lamming, R., 2013. Strategic operations management. Routledge.

Cummings, T.G. and Worley, C.G., 2014. Organization development and change. Cengage learning.

David, F. and David, F.R., 2016. Strategic Management: A Competitive Advantage Approach, Concepts and Cases.

Grünig, R. and Kühn, R., 2015. Global Environmental Analysis. In The Strategy Planning Process (pp. 89-96). Springer Berlin Heidelberg.

Heizer, J., Render, B. and Munson, C., 2016. Principles of operations management: sustainability and supply chain management. Pearson Higher Ed.

Iqbal, S. and Sharma, R.R.K., 2012. A STUDY OF ORGANIZATION STRATEGIES, STRUCTURES, CULTURE DIMENSIONS AND MANAGEMENT CONTROL SYSTEMS OF VARIOUS RETAIL FORMATS.Journal of International Business Strategy, 12(1).

Kantor, J. and Streitfeld, D., 2015. Inside Amazon: Wrestling big ideas in a bruising workplace. The New York Times, 15.

Resca, A. and Spagnoletti, P., 2014. Business Development Through Digital Transformation: The Evolution of Amazon. Com. In Information Systems, Management, Organization and Control (pp. 163-177). Springer International Publishing.

Slack, N., 2015. Operations strategy. John Wiley & Sons, Ltd.