Amazon's Core Value Strategy

1781 Words8 Pages
The core value propositions for Amazon’s internet book buyers were price, customer service, selection and convenience. Bezos (2000) claimed. Amazon to be “Earth’s most customer centric”, which meant they needed to listen, be innovative and personalise. Amazon’s personalization efforts were summarised by the CEO of Amazon, Jeff Bezos, by stating “If we have seventeen million customers, we should have seventeen million stores.” (Bezos, 2000).
Expansion of core businesses
Amazon consists of a divisional organisational structure consisting of different departments with different products along with services, thus, allowing appropriate focus on their resources and results. This allows them to monitor the organisation’s performance, making the organisation’s
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Customers pay for value, and offering prices, lower than competitors, for the same benefits or creating unique benefits for higher price, creates superior value. A company implementing a strategy for creating value, different from competitor’s strategies, has a competitive advantage.(Barney,1991), thus, giving Amazon, a strong chance against its competitors.

Petaraf and Barney (2003), stated that when a company creates greater economic value, it has an advantage over its competitors. Economic value is the difference of the perceived benefits received by the customers from the company’s economic cost. Although there are various ways of gaining competitive advantage without being the best in all aspects, there should be superiority in value creation (Peteraf and Barney, 2003).

Amazon successfully identified the right resources and developed its capabilities in key target
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• Weaknesses and Threats (WT) – How can weaknesses be minimised and threats managed?

Part IV: Concentric Diversification strategy
This strategy uses their technology expertise, to create value being the ‘lowest cost, customer-centric, online market. This policy proved good as it helped organised their customers (B2B & B2C) as well as activities, securing their cash flows to crisis. But the huge investments for it can be risky, due to low profit margins and sales reduction can cause effects on cash flow or new technology investments.
Conclusion
Amazon.com has been strong and steady since its foundation. Jeff Bezos openly claimed the mission statement to be the guiding force behind his decisions. It can be believed that the success of Amazon.com has been due to mostly, if not totally, their unwavering commitment to its mission and its implementation.
Amazon’s major guide has been its strategy for low cost and effective innovations gaining advantage over its competitors. Amazon’s established strategies can be deemed suitable and successful and thus making it dominating player in the market. This dominance may very well continue as Amazon explores new innovative products and
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