Essay: Strategic Direction And Changes Of Strategy In Amazon - An Analysis.

Background of Organization

Strategic management is very important for a business as it helps to set goals of an organization and make a company more competitive (Ritter and Pedersen 2020). Various types of strategic direction and changes of strategy can change the business of an organization. The objective of this report is to describe about the strategic direction and changes of strategy over the last 10 years in Amazon company with the business functions that contribute to the success of this organisation.

The integration of business function indicates the principal of external and internal environmental context of some contemporary organisations including the business and managerial context in which a business can be operated (Grant and Yeo 2021). Amazon company is leading company as they run their business all over the world and make a huge amount of profitability. The prospects of this report are to describe about the background of the chosen organisation that is Amazon company with the background information including products, timeline, market share, sector, and history of this company, discussion on the time frame, leadership, and the changes that can influence this organisation with the change of organisational response, leadership styles, vision, changes, and strategic leadership are adopted by the CEO of this company, application of various models and theories with PEST analysis and SWOT analysis and structure and culture of this organisation, and role of business functions that contributed to the success of this organisation.

Amazon company is a multinational technology company which is focusing on artificial intelligence, digital streaming, cloud computing, and e-commerce. Amazon company is the most valuable brand across the world and this is the reason to choose this company because this company is based on information technology and they grow their business very effectively which consider the cultural forces and influential economy (About Amazon, 2022). This company was founded by Jeff Bezos in the garage of his rented home in Washington. This company was opened online bookseller which is selling the largest collection of books across the world through web access. This company was selling videos and music in 1998 and started its international operations by gaining online booksellers in Germany and the United Kingdom. The industry of this company is e-commerce, artificial intelligence, cloud computing, digital distribution, electronics, consumer entertainment, and self-driving car. Amazon has a 31.2% market share as this company faces some tough competition with another e-commerce platform (Johnson-Kanda and Yawson 2018). This company is selling different types of products and services including software applications, videotapes, music CDs, DVDs, and books, baby products, scientific supplies, musical instruments, Garden items, watches and jewellery, kitchen items, industrial supplies, health and personal care items, gourmet food, beauty products, groceries, and consumer electronics. Firstly, Amazon company was selling books and computing with the local bookseller and then they started to expand their business which services beyond product including books.

Leadership, Time Frame and Changes

Leaders improve the performance bar with the promotion and hiring process. Leaders can recognise the talent of an employee and based on that; they can encourage employees for their work performance. The leadership style of Amazon company is classified as a pragmatist as this type of leader set high expectations and standards to meet the goals of an organisation by their employees (Schoemaker, Heaton and Teece 2018). Various types of leadership principles are followed by this company on a regular basis including customer obsession, ownership, simplifying and inventing, being curious and learning, developing and hiring the best, insist the highest standard, diving deep, earning trust, delivering results, a bias for action, and thinking big. Following these principles of leadership, this company has been influenced by their organisational changes. This company has the experience that the business leaders have a great influence on the business of this organisation in a wide range (Griffith, Baur and Buckley 2019). The senior leader of this company is hereby three committees including corporate and dominating governance committee, compensation committee and leadership development, and audit committee. The senior management team of this company is criticized for lack of diversity. 

This company was opened online bookseller which is selling the largest collection of books across the world through web access. After that, this company started selling videos and music in 1998 and started its international operations by gaining online booksellers in Germany and the United Kingdom. In this business, they make few profits and decided to expand their business with new product lines (Browne et al. 2018). And after that they make their e-commerce platform to sell their product lines. The business strategy of Amazon company hitting the revenue of the retail stores which is running in the traditional way. This can lead the significant changes in the pattern of consumer shopping.

The CEO and founder of this company, Jeff Bezos is a great leader for his organisation. He exercises servant and visionary leadership styles and provides exceptional Customer service which is the main business practice of this company (Al Khajeh 2018). His leadership style is very unique in different ways. As an example, when a user is searching for other internet organisations that are focusing on the different atmosphere for their employees, Jeff Bezos is proving the potential of his company 2 million customers. He could understand that this company requires invention and innovation from their team members and he is looking for new ideas. The leadership style of Jeff Bezos is analysed via the leadership theory of prism of contingency. According to the leadership theory of contingency, the effectiveness of leaders is contingent on the matches of the leadership style to the situation. This type of leadership style is fitted on different types of situations that are faced by a business when an organisation the strength on its position and based on that they can expand its industry (Schoemaker, Heaton and Teece 2018). The CEO of this company adopted different leadership principles including customer obsession, ownership, simplifying and inventing, being curious and learning, developing and hiring the best, insist the highest standard, diving deep, earning trust, delivering results, a bias for action, and thinking big.  He played the main role in the growth of the E-Commerce platform as a chief executive officer and founder of this company (Velikorossov et al. 2020). He is recognised as a transformational leader who can inspire and motivate his team members to achieve all the possible ways that will be beneficial for this company. He ensures to his team members make a commitment to the vision and mission of this company. He has the ability of strategic leadership in which he has the ability to lead, plan, visualise, and make a plan for the resources that helps to execute different types of strategies successfully and efficiently (Elrehail et al. 2018). He has welcomed the challenges and feedback and shared his perspective with his team members. The CEO of this company provides the vision and mission of this organisation by maintaining his great leadership style which is very good for the growth of this company. And the planning and plotting of the founder of this company is the main reason for the growth of this business. He is raising the bar of high standards and driving his team members to deliver high-quality processes, services, and products to the customers.

Strategic Leadership, Changes, Vision, Leadership Styles

Amazon is following the platform business model that can make a huge amount of money by selling their products and in this way, great revenue by selling the third-party products on their platform. Selling products are not only the one way by which this company can make money, they can also make money via advertising (Sadq, Sabir and Saeed 2018). Which company sells third party products on an eCommerce platform and attracts different brands to tie up with them and customers are also attracted to the brands on the Marketplace. In this way, various organisations can promote their brand through their platform. The business model of this company is based on three value propositions including a wide selection of products, fast delivery, and low price.

SWOT analysis

SWOT analysis is based on strengths, weaknesses, opportunities, and threats. In this section, we have discussed the SWOT analysis of Amazon company.

• This company is an online retailer company across the world that is focusing on cost leadership and differentiation (Alshmrani 2021). This helps this company to gain business profits and help the shareholders of this organisation to derive value from this company.
• This company can derive their competitive advantage from information technology and the usage of The E-Commerce platform which helps to ensure that this company is growing fast than its competitors.
• The main strength of this company is enjoying the recall from consumers across the world and recognition to enter new markets.
• Using the distribution system and superior logistics, this company improve themselves better to fulfil the demands of the customers and this helps to make a competitive advantage over its rival company.

• This company is trading their diversity that is very thin as they are focusing on the core competence of retailing books through the internet. And this is required to focus on different new areas (Arenhardt et al.2018). This will be a good strategy from the perspective of risk diversification.
• This company is offering free shipping to their customers and this can lose the margin and this will not be optimised on cost.
• This company is an online retailer company and they are focusing on a single-minded business strategy of online retailing, this can affect the expansion plan in the emerging markets.
• This company has faced different types of challenges because of the industry experts and analysts that operate the business of this company in a zero-margin business model.

• Amazon company has an opportunity to improve its business strategy and skill up the fact that has concerns regarding online shopping with privacy and security (Marathe and Gawade 2020).
• This company can roll out more products under the brand instead of focusing on third-party products.
• This company can expand their Global footprint and open different sides in emerging markets.
• This company can also increase their portfolio with more products and translate a higher revenue.

• The main threat of this company is hacking and identity theft which can expose the information of a customer which is the increasing concern of online shopping (Bento et al.2020). Therefore, security and privacy are the main important for this company.
• Government regulations threaten the business of this company in some critical nations as this company cannot ship their products to such nations.
• The increasing number of Cybercrimes can affect the security system of the network of this company.
• The increasing number of fake products can threaten the profits of this company.

PEST analysis is based on a political factor, economic factor, social factor, and technological factor. In this section, we have discussed the PEST analysis of Amazon company.

Amazon company is offering an online catalogue for their products across the world because they can operate overseas and they must abide by the legal and political regulations for each area (Alshmrani 2021). Different types of users can interfere with online purchases and this company is rely on the support of the government to profit, distribute, and implement its business strategy.

The economic factor is very important for this company as this company is focusing on the online system and offering more third party and branded products on their E-Commerce platform (Jiang, Sun and Wei 2021). They have made their website with the searching improvement for purchasing and this can increase the better accessibility for all the users. Online retailing can take the economic beating and make a profit.

Social factors are the determinant of this company and the aspect of this analysis has a great impact on socio-cultural changes and the performance of this company (Grigan 2021). Samsung company is facing some sociocultural external factors for increasing online buying habits and increasing consumerism in different developing countries which are the opportunities for this company.

Technological advancement has a great impact on this company that has some consequences of new trends and technologies on the microenvironment and remote access (Li 2020). Technological external factors are very important for this company and its business as it is following excellence of rapid Technology, increasing the efficiency of the resources of Information Technology, and increasing rates of Cybercrime.

SWOT Analysis and PEST Analysis

With values and assumptions, the culture of an organisation can influence the frame of reference of the top management that can shape the organisational structure of this organisation. This company has an organisational culture that can enable the capacity of the business to respond to the demand of the market of the e-commerce platforms. The corporate culture of this company can set the values and traditions which can influence the behaviour of the employees (Rodrigues et al. 2019). The corporate culture of this company also pushes the employees for the conventions and traditional limits to develop solutions and ideas. The organisational culture of this company has some characteristics in peculiarity, customer centricity, and boldness. Organisational culture helps to reinforce the pioneering effort of this company. The cultural characteristics of this organisation have a competitive advantage as it supports innovation (Tou et al. 2019). Organisational culture has different types of advantages as it focuses on the customer and ensure that Amazon company is satisfying the preferences and expectations of their customers. The organisational culture of this company also pushes the employees of this company to take up bold approaches in their jobs.

Business functions indicate the activities that are carried out by this organisation and this can be divided into main functions and the company supports those functions. The main business functions are the main activities of the income of an organisation (Sainidis, Robson and Heron 2019). Different types of business functions are used in the business of an organisation including finance and accounting, distribution, Human Resource Management, marketing and sales, purchasing, development and research, and production. These business functions are depending on each other. The production function of the specific position in the business activity of this organisation which is depending upon the marketing function. Production function also depends upon the working capital and investment in fixed assets (Almheiri and Omar 2022). The development and research function are depending upon the new processes, innovations, new products, and improving the existing processes and products. The purchasing function in this business is depending on the services and goods which includes raw components and raw materials for production equipment and manufacturing equipment. Sales and marketing are carried out to promote the business and reach out to the investor, and prospects. The main purpose of this function is to increase brand awareness and generate sales. The human resource of this company is attracting talent and managing the relationships between the employees by maintaining the working condition within this organisation. Finance is all about record-keeping all the transactions of this company. Distribution can increase the benefits of this organisation in form of high profit.

Functions Contributed to the Success of the Organization

Purchasing mix is depending upon four characteristics including delivery, price, quality, and quantity. This company is focusing on these characteristics for their marketing because can make this company successful. These four factors are very important for this organisation as they can enhance the user interface performance. In this way, customers can easily access the website of this organisation. The above-discussed business functions will ensure this organisation runs properly and take care of all the things of shareholders, leaders, employees, and customers (Islam and Azad 2018). The research and development function helps to understand the sales and marketing activities and this will be beneficial for this business. This company higher a specialist in marketing and sales who is responsible to research the market with the target audiences (Sivarajah et al. 2020). This company is monitoring their image of them on social media and based on that, they have created new customers through an advertising campaign. This can also increase the marketing and sales of this company and this company can make a huge amount of profitability.

Conclusion

Amazon company is a multinational technology company focusing on artificial intelligence, digital streaming, cloud computing, and e-commerce. This company was founded by Jeff Bezos in the garage of his rented home in Washington. This company has expanded their business by selling different types of products and services including software applications, videotapes, music CDs, DVDs, and books, baby products, scientific supplies, musical instruments, Garden items, watches and jewellery, kitchen items, industrial supplies, health and personal care items, gourmet food, beauty products, groceries, and consumer electronics. This company adopted various leadership functions that can influence the organization's change. From the above discussion, we have discussed about the background of the chosen organisation that is Amazon company with the background information including products, timeline, market share, sector, and history of this company, discussion on the time frame, leadership, and the changes that can influence this organisation with the change of organisational response, leadership styles, vision, changes, and strategic leadership are adopted by the CEO of this company, application of various models and theories with PEST analysis and SWOT analysis and structure and culture of this organisation, and role of business functions that contributed to the success of this organisation. Various types of business functions have been discussed in the business of Amazon company including finance and accounting, distribution, Human Resource Management, marketing and sales, purchasing, development and research, and production. This company is fully customer-focused and they have maintained three value propositions including a wide selection of products, fast delivery, and low price. Hence, it can be concluded that the above discussion has successfully highlighted the strategic direction and changes of strategy over the last 10 years in Amazon company with the business functions that contribute to the success of this organisation.

Reference

Al Khajeh, E.H., 2018. Impact of leadership styles on organizational performance. Journal of Human Resources Management Research, 2018, pp.1-10.

Almheiri, K.M.O. and Omar, R., 2022. The Relationship Between Leadership Functions and Performance Continuity in UAE Public Organizations: Moderating Role of Technology Business Analytics. South Asian Journal of Social Sciences and Humanities, 3(1), pp.86-105.

Alshmrani, H.M., 2021. An analytical view of amazon success in the worldwide. Life Science Journal, 18(6).

Arenhardt, V., de São Pedro Filho, F., Schalch, V., Deliza, E.E.V. and Back, R.B., 2018. Integrated waste management technology with focus on the Brazilian Amazon. International Journal of Advanced Engineering Research And Science, 5(3), p.237404.

Bento, D.F., Gomes, E.S., Guedes, V.M. and Coelho, E., 2020. SWOT Matrix (Strengths, Weaknesses, Opportunities and Threats) of a cooperative focused on logging and non-timber management in the Amazon. Revista Brasileira de Ciências da Amazônia/Brazilian Journal of Science of the Amazon, 9(2), pp.11-18.

Browne, A.J., Varcoe, C., Ford-Gilboe, M., Nadine Wathen, C., Smye, V., Jackson, B.E., Wallace, B., Pauly, B.B., Herbert, C.P., Lavoie, J.G. and Wong, S.T., 2018. Disruption as opportunity: Impacts of an organizational health equity intervention in primary care clinics. International Journal for Equity in Health, 17(1), pp.1-16.

Elrehail, H., Emeagwali, O.L., Alsaad, A. and Alzghoul, A., 2018. The impact of transformational and authentic leadership on innovation in higher education: The contingent role of knowledge sharing. Telematics and Informatics, 35(1), pp.55-67.

Grant, D. and Yeo, B., 2021. Enterprise integration using Service-Oriented Architecture. Issues in Information Systems, 22(1).

Griffith, J.A., Baur, J.E. and Buckley, M.R., 2019. Creating comprehensive leadership pipelines: Applying the real options approach to organizational leadership development. Human Resource Management Review, 29(3), pp.305-315.

Grigan, N., 2021. STRATEGIC ANALYSIS OF HUAWEI IN RUSSIA: SWOT AND PEST ANALYSIS. Norwegian Journal of Development of the International Science, (66), pp.3-17.

Islam, M. and Azad, M., 2018. Emerging Role of Electronic Human Resources Management Functions in Bangladesh-A Critical Review. Emerging Role of Electronic Human Resources Management Functions in Bangladesh-A Critical Review (December 31, 2018).

Jiang, Z., Sun, J. and Wei, K., 2021, September. The Application of PEST Analysis and POCD Framework to Skydio’s Venture Capital Investment. In 2021 International Conference on Financial Management and Economic Transition (FMET 2021) (pp. 202-208). Atlantis Press.

Johnson-Kanda, I. and Yawson, R.M., 2018, May. Complex adaptive leadership for organization and human development. In Proceedings of the 55th Annual Eastern Academy of Management Conference, Providence, RI.

Li, J., 2020. Differentiation, Diversification and Acquisition from an Online Bookstore: Multidimensional Assessment of Amazon’s Strategic Management. Available at SSRN 3683474.

Marathe, D.A. and Gawade, G., 2020. Literature review on customer perception about online shopping with reference to Amazon in India. Juni Khyat Journal, 10(7), pp.372-384.

 Ritter, T. and Pedersen, C.L., 2020. Digitization capability and the digitalization of business models in business-to-business firms: Past, present, and future. Industrial Marketing Management, 86, pp.180-190.

Rodrigues, C.G., Garcia, B.F., Verdegem, M., Santos, M.R., Amorim, R.V. and Valenti, W.C., 2019. Integrated culture of Nile tilapia and Amazon river prawn in stagnant ponds, using nutrient-rich water and substrates. Aquaculture, 503, pp.111-117.

Sadq, Z.M., Sabir, H.N. and Saeed, V.S.H., 2018. Analyzing the Amazon success strategies. Journal of process management and new technologies, 6(4).

Sainidis, E., Robson, A. and Heron, G., 2019. Environmental turbulence and the role of business functions in the manufacturing strategy debate: The case of UK-based SMEs and the Great Recession. Journal of General Management, 44(4), pp.190-208.

Schoemaker, P.J., Heaton, S. and Teece, D., 2018. Innovation, dynamic capabilities, and leadership. California Management Review, 61(1), pp.15-42.

Sivarajah, U., Irani, Z., Gupta, S. and Mahroof, K., 2020. Role of big data and social media analytics for business to business sustainability: A participatory web context. Industrial Marketing Management, 86, pp.163-179.

Tou, Y., Watanabe, C., Moriya, K., Naveed, N., Vurpillat, V. and Neittaanmäki, P., 2019. The transformation of R&D into neo open innovation-a new concept in R&D endeavor triggered by amazon. Technology in Society, 58, p.101141.

US About Amazon. 2022. About Amazon. [online] Available at: <https://www.aboutamazon.com/> [Accessed 14 March 2022].

Velikorossov, V.V., Filin, S.A., Genkin, E.V., Maksimov, M.I., Krasilnikova, M.A. and Rakauskiyene, O.G., 2020. HR systems as a new method for the automatization of business processes in organization. In 2nd international conference on pedagogy, communication and sociology (ICPCS (No. 2020, p. 415).