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Amazon's Competitive Strategies

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The way in which resources are managed is crucial to strategic growth and competitiveness of any organisation. Operations management tackles how these resources are managed. For an organisation to be different, it therefore needs to define competitive strategies because they shape how the organisation approaches its operation management decisions and support its corporate strategy.

Three major competitive strategies that form a competitive position for organisations are: differentiation, cost leadership, and response. It may be possible to compete on all these three strategies at once, but most organisation focus on one of these major strategies.

We will look at online retail of Amazon.com Inc (Amazon) competitive strategy, how they were …show more content…

It is the largest Internet-based retailer in the world by total sales and market capitalization. It started as an online book store but later diversified its offerings to DVDs, CDs, MP3 downloads, software, video games, electronics, apparel, furniture, food, toys, and jewellery. It allowed manufacturers and sellers to sell their products through its websites (Wikipedia 2016).
Performance Objectives
It aims to be Earth’s most customer-centric company. It is guided by four principles: customer obsession rather than competitor focus, passion for invention, commitment to operational excellence, and long-term thinking. (Amazon10-K report 2015).
SWOT Analysis
SWOT analysis is a formal review of internal strengths and weakness and external opportunities and threats for an organisation (Heizer & Render 2014). Any organisation can therefore make necessary procedures to tackle the issues they find.

SWOT analysis assists Amazon because it recognised the following: Strengths
Amazon takes pride in its internal strength to grow its business. Such as:
• Brand image as it is one of the biggest growing online stores from the …show more content…

Threats
Amazon has many threats as stated in its 10-K report. Looking at its online stores these external factors reduce its performance:
• Competition with other companies, online and physical.
• Easily copied business.
• Exposed to online hacking, phishing and spamming(Greenspan 2016b).
Porters Five Forces Model
Five forces model is one best approach to evaluating a company's competitive position in light of the structure of its industry. The five forces are buyer power, potential entrants, suppliers, substitute products, and industry rivals. The organization applies the model by developing a list of factors that fit under each of these headings (Chase et al. 2007).

The following are the external factors affecting Amazon based this model:
Buyer Power
The following external factors support the bargaining power of customers:
• Customers are exposed high quality of information regarding Amazon’s competitors.
• Customers have low cost on switching to competitors.
• Availability of substitutes allows customers to change to other products that are not with

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