Critical review of the organisations corporate strategy

It is said that the change in management is vital for the success of any organization if the want to survive in this comparative environment and business oriented world (By, 2005). Similarly, critical review is vital to conduct against the performance of any company. It tells us about their progress and achievements and in the mean time it also tell us about the areas in which the company needs to improve. It highlights to positive and negative aspects marketing strategy of the organization and helps to formulate better plans for the future.

Introduction

“Strategy” Is the fundamental concept od this modern world and it has replaced the prior terms and terminologies such as “administration” or “planification.” According to, the meaning of the word strategy originated in the military field and comes from the word “strategos” meaning general in Greek (Fuertes et al., 2020). This word expresses the meaning for strict balance between things and good collaboration and cooperation to work together. Otherwise, people will suffer from the negative affects bring with it.

Amazon has become the world’s largest e commerce and retailing platform and it is a pioneer in this filed as Jeff was the one who initiated this business in his garage in the form of online book selling store and from then and there the success venture of the organization started and still going on and now they are selling every possible thing (Juneja, n.d.). Its been a long journey for Amazon but they somehow managed to become world’s largest e commerce organization. There are many reasons behind but the most important one is the following.

Failure to execute may be the one reasons but there are much complicated then the usual one people cite in the daily life. The problem with innovation improvement efforts is rooted in the lack of an innovation strategy (P. Pisano, 2015).

Critical review of the organisations corporate strategy

Critical review of the organization corporate strategy is important and students can learn many things about the real world settings and reasons regarding the downfall and rise of different organisations under the rule of their country and authority of law. To conduct successful corporate strategy analysis we need to consider some very basic models of organizational analysis such as SWOT, TOWS and PESTLE.

SWOT analysis

SWOT analysis are often conducted to see how the biggest organizations used their competitive advantages to becomes the key player in the business world (Jurevicius, 2020). It means that they look for the shortcoming their competitors had then worked on those areas and improved them. When they went into market with preparation, consumers trusted them and enjoyed their improved services as compared to their competitors.

Strengths

Strengths include huge number of third part sellers and low cost structure. They balanced demand and supply chain thus maintaining good prices for the consumers. They also introduced deals and discounts for the customers. It is interesting to note that growth of Amazon alone was more than American’s whole retail industry in the recent years and it means that company has increased its market share by taking it from its rivals in the market (Jurevicius, 2020). Low cost structure leads to low prices and brought benefits both for company as it helped it grow and for consumers as it provided them with relatively cheaper products on their door steps.

Amazon sells around 120 million product at its market place. It is indeed a huge number. There careful selection of these 120 million products helped them to grow super fast and become the only one in the market because everything available in their store house. Amazon’s business model works on the basis of third party sellers. Third part seller is the biggest asset of Amazon as in 2018, third party sellers sold 58% of the total products and Amazon took its commission because it provides them services. In 2018, the third party sales were reached to $160 billion.

Weaknesses

Amazon is offering free delivery and shipping for its customers and there is an eminent threat that Amazon will lose its part of the margin that is why, Amazon may not be able to hold the price using this strategy (Juneja, n.d.). It is one of the biggest threats for Amazon and Amazon do realize it. They are working on this issue and trying to resolve it by producing enough resources to fill the gap.

One of the biggest weakness of the Amazon is that the company works in zero margin business  model that means that the profit ratio are nearly nothing for the company. Despite having a lot of sales and huge revenue, the company can still suffer if it goes for a long time.

Opportunities

Amazon can gain the opportunity to penetrate or expand its operations in developing markets (Maggy, SG and Castano, 2020). Amazon is a rich company and world is open for investment. It has a huge opportunity to go and find the areas of interests in which it can invest and make huge profits out of it. After all, they are doing everything to make money, why not making a little more.

In the field of technology, Amazon has great opportunities. They had already made so much money out of it already but after the Covid 19 pandemic they can make even more. The IA and could computing can help them to expand in the filed of computer and technology.

Threats

These is a price for everything and being the biggest company also costs you a lot. Many people are sources criticize Amazon for its policies. The work ethics of the company, their work environment and certain practices are questioned by the general public as well (Amazon SWOT Analysis Strategic Analysis of Amazon.com, 2021). The fake news and fake criticism and news are the real threat of good reputation of the institute. But, there are very less people that understands the real meaning of life and these are the people who enjoys life at its full and they also find some job before us.

Government’s regulations and new taxes are the other threats Amazon is facing at the moment. They are working under a government and as soon as their interests got distracted the both with stand each and it will not be good for the general public.

PESTLE analysis of Amazon

This PESTLE analysis of Amazon.com Inc. reveals the significance of operations expansion into more markets to support the global growth of the e commerce business (GREENSPAN, 2019). PESTLE anaysis is includes all the necessary factors that are vital for the progress and growth of any organization. That is why, it is necessary to consider these factors for substantial growth and progress. It gives us insight about the areas the organization lack certain abilities and also tells us the potential strong areas in which there are strong chances of growth.

Political Factors:

Political red tape and tightening regulations due to political bureaucracy and processes increase the hurdle of doing business in several markets (Attari, 2020). The increasing political tension has made it difficult for the international companies like Amazon to operate in the remote markets. For example, during Trump era Amazon had to shut down its certain operations in China due to increased tension between two countries. The economic and trade war also made it difficult and now the situation has reversed in a way that economic and trade war is giving shape to new political order like we can see in China’s one belt one road project and how it brought together the countries of the region.

Economic factors:

Political and economic factors are linked to each other one way or the other. economic factors is the driving force behind all the business activities. It is a simple phenomenon not a rocket science that if economy is positive then business will grow in such an economy. There is no exception for Amazon. But it has been seen the retail industry is one of those who can take up the economic beating and still survive (Frue, 2021). This feature of the retail and e commerce industry enables it to survive almost in any situation even during the global pandemic where the businessmen was losing their fortunes Amazon was net 21.33 billion U.S. dollars. It is the reason people are investing in this platform because it has not only survived the worst circumstances but also brought profit to its owner and share holders in those hard times as well.

Social factors:

With the advancement in 5G technology, Amazon took advantage of the situation and expended its network even further. It breached the national, cultural and social boundaries and reached to far off places for business. Who can think of Amazon operating in China, a country who has totally different political, economic and cultural system and it is the biggest opponent and rival of America and Amazon itself but still the company managed to make its way into that market despite of their own retailing and e commerce company Ali Baba operating successfully in their company. General believes and thinking patterns of general public are determined by social factors. These are mostly related to demographical trends and cultural trends. The behavior of the customers is determined by these factors (Cuofano, 2020). These social factors are the driving forces in business industry.

Technological Factors:

Amazon needs to advance in technology because it is the basic requirement of this organization as the entire online retailing, marketing and e commerce industry runs on technology and can flourish by the use of modern technology (Team, 2019). Technology is the new form of rivalry in the world. These giants are fighting with each other on both fronts, i.e. economic and technological because one is incomplete without other and one supports the other. That is why, Amazon is investing huge money in cloud computing and making a fortune out of it. These are all the strategies to keep things moving and in a good balance to make as much profit as they can.

Environmental Factors:

Amazon is hiding information from the stockholders and do not want to disclose information regarding the impact on environment. Amazon recently said in a statement that the information will be released latter this year (Farooq, 2021). This statement tells that Amazon is certainly trying to hide something from its shareholders and general public as well. There is always a dark side of any bright face and same is true for Amazon. One should not driven away from the big numbers the organization had made and still making and earning huge profits all over the world but we should also consider the bad effects it is causing to the environment we are living in and we must speak about it.

Legal Factors:

Amazon needs to follow the rules, regulations and laws of the country and region in which the company operates, it they do not, they will have to face the lawsuits and fines and it has happened in the past (David, 2020). We are living in 21th century and there is strong legal system in this era. Organizations have to follow the set of rules and regulation in order to operate in any company.  It was fined $134,523 in the USA for selling products or services to people in sanctioned countries (David, 2020). A big organization like Amazon has to consider everything before making any move, otherwise, they have to face serious consequences of their actions.

Identify, prioritise, justify and evaluate recommendations for the Company’s future direction to 2025:

Amazon has become the world’s largest retailer and e commerce organizational. They reached $1 billion marker cap after Apple Inc and become second company in the history of human kind to achieve that mark. Amazon is still the fastest growing industry in the world and even a global pandemic is not able to halt its progress. The organization has secured billion of dollars in this pandemic and make a fortune out of it.

In January 2018, Amazon opened its first cashier less convenience store called Amazon Go, in its birthplace of Seattle, and there are now 28 worldwide (Amazon s future plans, from cashless stores to home robots | lovemoney.com, 2021). These cashier less stores offer customers to shop without the assistance of any human being. These stores has reduced the cost and brought positive results for the company. Amazon can expand these stores in the future.

Amazon offers its customers free delivery but this service is costing too much. Amazon now introduced delivery drones that can carry the package and deliver it the door step of the customers. It is a new and eye catching move and if they work on it properly it can surely save them a lot of money also it can provide a faster deliver service in busy streets of cities.

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