Amazon Business Model: Analyzing Corporate Strategy, Vertical Integration, and Competitive Advantage

Introduction to Amazon's Business Model

General Instructions:
Read the following scenario and evaluate using the Critical Evaluation points identified.

Case Study. The Amazon Business Model:

Amazon is the world’s largest online retailer and is indeed a pioneer in the online retailing space. Though it started as an online bookstore, its success in its venture spurred it to diversify into selling anything that can be sold online. Further, Amazon has also expanded globally and now operates around the world through a combination of localized portals and globalized delivery and logistics platforms.

 

The way in which Amazon has leveraged technology as a source of competitive advantage and reaped the benefits of the economies of scale in addition to leveraging the synergies between its internal resources and external drivers has spawned many rivals who aim to imitate and better its business model.

 

Amazon has popularized “one-click” selling wherein customers can buy anything and everything that is for sale on its portal with just a click of the mouse. Going by the rate at it, which Amazon is growing, it is indeed the case that its business model is “clicking” with its customers. Having said that, the need of the hour for Amazon is to sustain its growth rates and maintain the momentum.

 

Further, a worrying factor for the company is that it has not made profits in many of the quarters over the last three years. A possible reason for this can be its excessive focus on cost leadership, which means that in the “race to the bottom” its bottom line is being impacted.

 

Finally, Amazon needs to adopt a Global approach in its international markets wherein it adapts its Global business model with that of its Local delivery and logistics supply chain. This would indeed create a globalized business value chain wherein anyone anywhere can buy products anytime and every time.

 

In conclusion, the future looks bright for Amazon and if it continues to focus on its core competencies and at the same time expands its global value chain, there is no reason why it cannot maintain its market leadership.

• Explain, discuss and analyze the key issues involved in corporate strategy 
• Identify and discuss the different types of vertical integration
• Explain the context for acquisitions, mergers and divestment

Critical Evaluation:
1.Evaluate, Explain, Discuss and Analyze the key issues involved in Amazon’s Current Corporate Strategy 

2.Review Amazon’s Business Model in the context of vertical integration, acquisition, mergers and divestment
3.Discuss Amazon’s strategy on Cost Leadership 
4.Amazon’s Corporate Strategy is driven by its sources of competitive advantage. Discuss what is Competitive Advantage and its importance in Corporate Strategy

 

Rubric: Assignment 1

You clearly understood the case and explained its importance in terms of Corporate Strategy Corporate Strategy concepts. (20 points)

The question is analyzed from several perspectives, including corporate strategy, vertical integration, acquisition, mergers divestment, Cost Leadership and Competitive Advantage. Insights are clearly stated and conclusions are convincing.    (50 points)

Mechanics of Writing. Ideas are interesting and Organization is logical and effective. Voice is individual and appropriate to the exercise. Word Choice is specific and sentences are fluent, smooth and expressive. Punctuation, spelling and grammar are correct and appropriate. (20 points)

References are sited and identified properly. (10 points)