Amazon as an Employer Case Solution

The Harvard Business Review published a case study that primarily focuses on Amazon as an Employer. The following case solution has been designed to give the reader an overview about the business world along with a clear understanding of its growth dynamics. Recently, Amazon as an Employer has been subjected to strategic as well as managerial problems that require immediate attention so that they can be resolved to allow future growth, expansion, and competitive edge within the marketplace. This case study solution is being written to provide a strategic solution to Amazon as an Employer using various appropriate tools and frameworks. Harvard Business Review’s case studies involve a central problem that is faced by a particular company. The problem identified involves strategic and managerial implications for the company. Therefore, it is important for readers to critically identify the problem Amazon as an Employer faces. Moreover, it is also essential to highlight the key stakeholders that are impacted and influenced by the problem identified.

External Environmental Analysis

The external environment holds significant importance for Amazon as an Employer to ensure that the company is able to respond to all the changes in the macro-environment. This is because Amazon as an Employer cannot control the factors and thus can directly influence the company's operations (Indris & Primiana, 2015). The external environment of Amazon as an Employer will be assessed using PESTLE Analysis.

Political

• A stable political environment provides a favorable market growth trend for Amazon as an Employer.

• It is important for Amazon as an Employer to analyze the pressure groups, and social environment activists. The company can make close collaborations with these groups to achieve company goals (Wang, Wang, & Shi, 2022).

• High restrictions on trade and high levels of taxes can contribute to the complex business environment for Amazon as an Employer by impacting imports and exports.

Economic

• Amazon as an Employer can benefit from wide-range opportunities in business growth by operating in developing economies (Munro, 2017).

• High GDP can determine the long-term growth strategies of Amazon as an Employer, signaling the ability of consumers to spend on more products.

• Higher rates of interests can provide Amazon as an Employer with more investment opportunities.

• The flexibility in the labor market allows Amazon as an Employer to take advantage of higher workforce productivity.

Social

• The selection of appropriate demographic segments has allowed Amazon as an Employer to select the right segments of the market that have high growth potential.

• The research on gender roles has helped Amazon as an Employer to develop and align communication as well as marketing strategies accordingly.

• Amazon as an Employer has been successful in understanding the norms and cultures of different countries by developing local teams and partnerships (Hueske, Endrikat, & Guenther, 2015).

Technological

• The adoption of innovative marketing techniques that involves communication technologies has allowed Amazon as an Employer to collaborate successfully with consumers.

• The company has stayed ahead in the market, and can significantly increase its market share by placing its major focus on emerging technologies (Akpoviroro & Owotutu, 2018).

• Amazon as an Employer should maximize its profits by investing in disruptive technologies.

Environmental

• It is crucial for Amazon as an Employer to adopt effective waste management practices to reduce environmental pollution (J. K, W. J, & D., 2016).

• Amazon as an Employer should adopt eco-friendly products to establish better relationships with the stakeholders.

• Amazon as an Employer can take advantage of subsidies offered in renewable technologies to achieve the long-term goal of sustainability.

Legal

• Amazon as an Employer should follow proper laws concerning employee health and safety, and anti-discrimination laws to effectively develop HRM.

• Consumer protection laws are also important for Amazon as an Employer as it involves the consumer protection from fraudulent marketing (S. Samusenko, S. Plaskova, & A. Prodanova, 2020).

• Amazon as an Employer can gain a competitive advantage, and can position itself strongly in the market by protecting intellectual property laws.

Porter’s Five Forces Analysis

Threat of New Entrants

• It is difficult to achieve economies of scale in Amazon as an Employer’s industry, making it a weaker force for new entrants.

• There are high capital requirements in the industry. This makes it difficult for new businesses to set up their companies, and compete against Amazon as an Employer.

• The industry has a strong product differentiation, and heavy investment is needed for customer acquisition. Thus, Amazon as an Employer can focus on innovation to differentiate itself from its competitors (H. Th. Bruijl, 2018).

• There are strict legal requirements to join the industry in which Amazon as an Employer operates, making it difficult for new entrants to enter the market.

Bargaining Power of Suppliers

• The bargaining power of suppliers in the industry is weak.

• Amazon as an Employer operates in an industry with a higher number of suppliers. This means that suppliers do not have much control over their prices.

• Standardized products that have low switching costs are provided by suppliers allowing buyers like Amazon as an Employer to easily switch their suppliers (Fabbri & F.Klapper, 2016).

• Raw materials can be purchased at lower prices by Amazon as an Employer. The company can also switch suppliers for more reasonable pricing.

• Amazon as an Employer can benefit from a variety of suppliers as it can have multiple suppliers for its various geographical areas (Cho, Ke, & Han, 2019).

Bargaining Power of Buyers

• The bargaining power of buyers in the Amazon as an Employer industry is weak.

• There is a high product differentiation in the industry, making it difficult for buyers to switch to alternative firms.

• Amazon as an Employer can come with differentiated and innovative products to attract more buyers of the industry (Zhao, Zuo, & Wu, 2016).

• Buyers of this industry has low incomes. This means they prefer to purchase items at lower prices, making them more price sensitive. Organizations like Amazon as an Employer can offer lower prices to attract customers.

Threat of Substitute Products or Services

• There are few substitute products available in the industry in which Amazon as an Employer operates.

• Expensive substitutes are available in the industry of Amazon as an Employer, making it difficult for buyers to switch to those substitutes (Aithal, 2016).

Rivalry Among Existing Firms

• The rivalry among existing firms is moderate to weak.

• There are few competitors in the industry in which Amazon as an Employer operates.

• A large market share is enjoyed by fewer firms in the industry. This means that more competitive actions will be made to become leaders in the market (Seema, 2016).

• The industry in which Amazon as an Employer operates has highly differentiated products, making it difficult for companies to win each other customers.

• Amazon as an Employer can focus on making more differentiated products to gain a strong competitive edge in the market (Zhao, Zuo, & Wu, 2016).

Internal Environmental Analysis

Amazon as an Employer can use internal environmental analysis to identify and evaluate the competitive positioning of a company in the business environment. This involves conducting a SWOT Analysis that can help Amazon as an Employer to identify the company’s internal strengths, weaknesses, opportunities, and threats (Halmaghi, Iancue, & Băcilă, 2017).

SWOT Analysis

Strengths

• Amazon as an Employer has a strong distribution network that has allowed it to make its products available to large customers within the given timeframe.

• A strong presence on social media platforms has allowed Amazon as an Employer to have a high level of customer engagement (Rizaldi, 2015).

• Amazon as an Employer has been successful in building a large product portfolio, so unique and distinctive products can be offered to consumers.

• Amazon as an Employer has a strong brand image in the market.

• A low-cost structure of Amazon as an Employer has allowed it to manufacture products at lower costs, so they become affordable for consumers to purchase.

• The financial position of Amazon as an Employer is strong as the company has generated higher profits over the past years (Phadermrod, M.Crowder, & B.Wills, 2019).

• Amazon as an Employer has invested in the training and development of its employees to keep them motivates, leading to higher efficiency and productivity.

Weaknesses

• The expenditure of Amazon as an Employer on its research and development is comparatively less to other competitors of the market.

• Amazon as an Employer uses a centralized decision-making process that takes time and reduces operational efficiency (Ahmadi, Dileepan, & K. Wheatley, 2016).

• There are high rental costs because Amazon as an Employer operates on more of the rental properties rather than purchasing them.

• There is no workforce diversification in Amazon as an Employer. This makes it difficult for the employees to adjust with the different workers who belong to different backgrounds.

Opportunities

• Since the online shopping has increased significantly, Amazon as an Employer can take it as an opportunity to expand its online presence.

• Amazon as an Employer can make use of social media platforms to market its products, with more customers interactions.

• Due to more technological developments, Amazon as an Employer can make its operations more automated so that overall company costs can be reduced (Ahmadi, Dileepan, & K. Wheatley, 2016).

• Globalization provides an opportunity to Amazon as an Employer to expand its operations in multiple countries.

• Amazon as an Employer can enter in a niche market and sell distinctive products to gain a competitive advantage.

• The increase in the demand of environmentally friendly goods, Amazon as an Employer, can place its major focus on making such products (E.Quezada, A.Reinao, & I.Palominos, 2019).

Threats

• In recent times, there has been an increase in the bargaining power of suppliers, making it difficult for Amazon as an Employer to buy raw materials at lower costs.

• Numerous players are entering the industry, posing a major threat to Amazon as an Employer.

• There has been constant pressure on Amazon as an Employer to conduct frequent research to understand the changing customer tastes and preferences (Kolbina, 2015).

• Technological advancements require workforce training. This adds to the costs of Amazon as an Employer.

VRIO Analysis

Amazon as an Employer uses VRIO Analysis to assess and evaluate the company resources to determine the competitiveness, and strategic advantage.

Valuable

• Amazon as an Employer has a strong brand image and engages in corporate social responsibility.

• Amazon as an Employer has a high brand recognition because of the quality of products it offers to its customers (Ariyani & Daryanto, 2018).

• The distribution system of Amazon as an Employer is valued all round the world. The company has been able to successfully establish strong relationships with its suppliers.

• Amazon as an Employer focuses on continuous innovation in its business. The company has expanded this innovation in its multiple functional areas.

• There are potential growth opportunities in the market, and Amazon as an Employer has been able to penetrate the market through its ability to raise large funds.

Rare

• Amazon as an Employer operates globally. This global presence has allowed the company to increase its customer base (Miethlich & G. Oldenburg, 2019).

• Amazon as an Employer has an organizational culture that promotes more teamwork, innovation, and creativity among its employees, that leads to a competitive advantage.

• Since Amazon as an Employer has a global presence, it allows the company to easily adapt to different cultures, norms and values.

• The risk-taking ability of Amazon as an Employer is strong. This provides more opportunities to the company to penetrate different markets.

Inimitable

• The inimitable resource for Amazon as an Employer is its high-quality products. These products have allowed consumers to make repeat purchases.

• Amazon as an Employer operates through multiple locations of stores in different companies, allowing easy access to products.

• Strong marketing communications have been used by Amazon as an Employer to attract more customers.

• Amazon as an Employer has been using integrated technology that has allowed it to offer competitive pricing to its customers (Ariwibowo, Saputro, & Haryanto, 2021).

• Amazon as an Employer maintains an excellent customer service that has enabled it to have a high brand engagement.

Organization

• Strong financial position has allowed Amazon as an Employer to explore more product development opportunities.

• Amazon as an Employer is successfully maintaining the efficiency and effectiveness of its business operations with the help of more integrated and advanced technology.

• Employees are given both in-house and off-the-job training opportunities by Amazon as an Employer that allow more skills development (Adnan, Abdulhamid, & Sohail, 2018).

• The strong value chain and distribution network has enabled Amazon as an Employer to increase its revenue through the sale of its products.

Marketing Mix

Marketing Mix is needed by Amazon as an Employer to formulate effective strategies to achieve the company objectives.

Product

• Amazon as an Employer has five product categories. Each of these categories has a product line that involves more variety of products (Išoraitė, 2016).

• Highly differentiated products are offered by Amazon as an Employer to its customers. These distinctive products are not easily available at competitors.

• The products of Amazon as an Employer are of higher quality, and thus, customers pay more prices for these products.

• Amazon as an Employer designs products with traditional designs giving customers more product variety.

• Amazon as an Employer offers multiple sizes for its every product to make it easy for its customers to select the right product.

• Warranty and same-day delivery option if also provided by Amazon as an Employer to its customers.

Price

• Amazon as an Employer follows a competitive pricing strategy.

• To attract more customers, bundle pricing has also been used by the company.

• Little higher prices are charged for products that are sold online because of the delivery costs (Thabit & Raewf, 2018).

• Optional product pricing strategy is also adopted by Amazon as an Employer for some of its products, such as a base product is offered for a certain price, and there are separate prices for its accessories.

• Regular promotional prices are also offered by Amazon as an Employer to its customers.

Place

• Amazon as an Employer uses two channels for its product distribution. This includes online selling and through own stores.

• There are more than multiple stores owned by Amazon as an Employer globally. This ensures easy product availability to customers (Pogorelova, Yakhneeva, & Agafonova, 2016).

• Amazon as an Employer has partnered with delivery service companies to distribute its products effectively to consumers.

• Amazon as an Employer has also adopted an omni-channel distribution system.

Promotion

• Amazon as an Employer uses a traditional promotional strategy that involves TV advertisements (Fan, Y.K.Lau, & Zhao, 2015).

• Social media advertisements are also adopted by Amazon as an Employer to increase brand awareness.

• Amazon as an Employer takes part in various events and exhibitions as a way of promoting its products.

• Large sales force is used to provide the customers with a more personal experience.

• Amazon as an Employer also makes use of influencer marketing to increase the demand for its products.

• Regular content and deals are posted on the social media pages of Amazon as an Employer to attract and retain customers.

Value Chain Analysis

Amazon as an Employer can use Value Chain Analysis to identify and assess inter-relationships as well as interdependencies.

Primary Activities

• Amazon as an Employer’s primary activities involves the production and selling of products to the final consumers (Mintz, J.Gilbride, & Lenk, 2021).

• Amazon as an Employer has a strong relationship with the suppliers. This ensures that the product is received, stored, and distributed in a timely manner.

• Operational activities of Amazon as an Employer are effectively aligned.

• For inbound logistics, after the arrival of raw material, the company processes it to manufacture the final product (Hasan, Nekmahmud, & Yajuan, 2019).

• In terms of outbound logistics, Amazon as an Employer has been able to set up optimal costs as well as efficient delivery processes to deliver the product on time.

• Amazon as an Employer invests in its sales and marketing activities to build relationships with customers.

• Marketing funnel approach is used by Amazon as an Employer to effectively devise and build sales and marketing activities.

• Amazon as an Employer offers both pre-sale and post-sales services to its customers.

Secondary Activities

• Amazon as an Employer has an effective infrastructure that has allowed the company to successfully optimize its value chain.

• The competitive pressure in terms of employee skill development, motivation, and commitment is reduced as Amazon as an Employer has developed a strong HRM (Linkov, Carluccio, Pritchard, & Bhreasail, 2020).

• Amazon as an Employer uses a cost minimization approach to reduce its costs by analyzing the costs associated with training and hiring the employees.

• Amazon as an Employer has been using integrated technology in its value chain activities. This includes technological customer support, research and data analytics concerning product design, and automated software.

• The procurement activities of Amazon as an Employer are effectively optimized with its inbound, outbound, and operational activities (Maheswari, Yudoko, & Adhiutama, 2019).

Market Penetration Strategies

• Amazon as an Employer can increase the capacity of its production so it can reach more of the customers in its existing market.

• Amazon as an Employer can focus on controlling the overhead costs so that it can offer competitive pricing that can attract customers of the market (Dawes, 2018).

• Investments can be made by Amazon as an Employer in marketing and sales activities to increase the chances of successful market penetration.

• Amazon as an Employer can design and develop a content that increases customer engagement within a particular marketplace.

• Amazon as an Employer can assess and identify more enhanced distribution networks (Radpour, Mondal, & Kumar, 2017).

• Improved distribution systems and supply chains can improve the product accessibility for the customers, making it easier for Amazon as an Employer to penetrate the market.

• Amazon as an Employer can adopt price cuts in its products to compete in the market. This will give a company a competitive edge over its competitors.

• Amazon as an Employer can plan strategies where it can focus on acquiring the leading players of the market. Such acquisitions will give the company an opportunity to reach more customer segments.

• Strategic partnerships and joint ventures agreements can be signed by Amazon as an Employer to mitigate the risk factors, and to gain customer groups of the market.

• Amazon as an Employer can come up with new and innovative features in its already existing product for the market (Daouda, Barth, & T. M. Ingenbleek, 2019).

Market Development Strategies

• It is important for Amazon as an Employer to invest in the research and development department so potential markets can be identified (Hilman, Bohari, & Abdullah, 2018).

• Regional expansion strategy can be used by Amazon as an Employer for growth purposes. This will also take into consideration the cultural differences.

• Amazon as an Employer should also consider to expand its business operations in the international market. This will allow access to a larger customer base.

• New customer groups and segments should be explored by Amazon as an Employer.

• Amazon as an Employer should also invest in brand-building activities as it will give an opportunity to reach more potential customers (C. Koks & M. Kilika, 2016).

• Amazon as an Employer should consider the market education in terms of its product. The company can significantly increase its sales by giving product awareness to new segments.

Product Development Strategies

• Amazon as an Employer can come up with new improvements and modifications in the existing products to attract the market.

• Amazon as an Employer should undergo the NPD process, so the company is able to assess and identify new points for its customers.

• Regular investments in the research and development will help Amazon as an Employer to develop something new and innovative that can give a competitive advantage (Kalogiannidis & Mavratzas, 2020).

• Amazon as an Employer can develop new products by getting into more strategic partnerships.

Diversification Strategies

• Amazon as an Employer can adopt vertical diversification to develop business. This can be done by adding more products to the existing portfolio (Kalogiannidis & Mavratzas, 2020).

• Horizontal integration can also be adopted by Amazon as an Employer, where the company can enter into a completely new product development phase that does not exist in the current product line.

• Amazon as an Employer can also consider to conglomerate by starting a different business.

Conclusion

Based on all the models and frameworks discussed above, it is concluded that Amazon as an Employer should focus on widening the existing product portfolio. Moreover, the psychological pricing strategy can be adopted. Amazon as an Employer should also maintain close relationships with its suppliers to benefit from lower prices. Similarly, Amazon as an Employer should develop more integrated outbound logistics for its perishable items. It is also important to continue producing quality and innovative products, so Amazon as an Employer is less affected by the new emerging competition in the industry.

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