Amazon business level strategy
Not what you're looking for?
Discuss Amazon's business level strategy including identification of the industry, development of the value creation frontier, identification and justification of the company's generic business level strategy, market segment, strategic group, and rivals, and tactics used to manage those rivals.
Business Level Strategy
I. How does a company make a profit?
a. Be customers' "best" option
b. But not all customers value the same features
c. Unique
i. Either monopoly
ii. Or more likely, differentiate on some characteristic / price
II. Market Analysis
a. Generic business-level strategies
i. Cost leadership vs. differentiators
ii. Broad vs. focused strategies
iii. Four generic business-level strategies:
Broad Cost Leadership Broad Differentiation
Focused Cost Leadership Focused Differentiation
b. Value Creation Frontier
i. Curve represents customers trade-offs between low price and features
1. Location of firm represents low price vs. features
2. Size of firm represents broad vs. focused
ii. What can be learned from the curve?
1. Market segments, strategic groups, rivals
2. What customers are unsatisfied
3. Which direction can our firm move to reduce rivalry
III. Tactics for Managing Industries
a. Fragmented industries can be focused using:
i. Chaining
ii. Franchising
iii. Horizontal mergers
iv. eBusiness
b. Tactics for managing rivalries
i. Price signaling / tit-for-tat
ii. Price leadership
iii. Nonprice competition
iv. Market penetration / entrenchment
v. Product proliferation
vi. Capacity control
Purchase this Solution
Solution Summary
The response provides you a structured explanation of how Amazon makes profits . It also gives you the relevant references.
Solution Preview
Business Level Strategy
I. How does a company make a profit?
Amazon.com became the customer?s best option when it allowed customers to shop online for a wide variety of products at the same place. This was in direct competition to brick-and-mortar stores where people had to physically go shopping. The company Amazon.com made profit by taking a small percentage of the sale price of each item that is sold through its website. Amazon.com also makes profits by allowing companies to place advertisements on its website (1). The main characteristic that has allowed Amazon.com to make profits is the large customer base of 30 million customers. Its value frontier is that it allows its customers to shop online at one site. Amazon.com has broadened the base of products over time. It has offered retail goods, consumer electronics, digital content, and private labels. Its broad product base helps develop the value creating frontier of Amazon.com.
II. Market Analysis
a. Generic business-level strategies
Amazon.com?s business level strategy is cost leadership. It has been able to provide low cost pricing and efficient distribution capabilities. It has been able to provide world class service to its ...
Education
- BSc , University of Calcutta
- MBA, Eastern Institute for Integrated Learning in Management
Recent Feedback
- "I read your comments, and thank you for this feedback. Do I need to find other studies that applied this methodology Ive used? That's where I'm stuck at."
- "Thank you kindly sir. "
- "Excellent and well explained. --Thank you kindly. "
- "Awesome notes. I appreciate you."
- "I have the follow-up project and I will assign that to you very soon. "
Purchase this Solution
Free BrainMass Quizzes
Writing Business Plans
This quiz will test your understanding of how to write good business plans, the usual components of a good plan, purposes, terms, and writing style tips.
Income Streams
In our ever changing world, developing secondary income streams is becoming more important. This quiz provides a brief overview of income sources.
Introduction to Finance
This quiz test introductory finance topics.
Organizational Leadership Quiz
This quiz prepares a person to do well when it comes to studying organizational leadership in their studies.
Cost Concepts: Analyzing Costs in Managerial Accounting
This quiz gives students the opportunity to assess their knowledge of cost concepts used in managerial accounting such as opportunity costs, marginal costs, relevant costs and the benefits and relationships that derive from them.