Strategic management
is a constant part of the capital market, where businesses are competing
against each other. We are witnessing different strategic management every day.
Amazon started Amazon Prime, and they deliver mostly what we buy in 1 day now.
Walmart had to adopt a strategy to counter Amazon, so companies like Walmart,
Best Buy is using their stores as warehouses and trying to deliver stuff to
the customer faster.
We can discuss the
five “P’s of strategic planning for these companies.
Planning – Jeff Bezos
started selling books on the internet and then expanded Amazon as a platform on
the internet. Keeping the customer at the center, now Amazon is not just an
online retailer but media company, IT infrastructure company, and many things.
The plan Jeff Bezos came up with, that was to sell books then CDs gradually
evolved into Amazon we have today.
Ploy – I think
starting Amazon Prime was a great ploy by Amazon. When it started, it was
cheaper than Netflix membership, it guaranteed 2 days shipping, along with so
many other features such as video and music streaming. Nobody really considers
Amazon to be a media company until recently. But, Amazon Prime is a great way
to retain customers, Because it is a great value for money and with so many
features it does not feel expensive. More importantly, competitors did not have
anything like Prime.
Pattern – Amazon’s
biggest pattern is they are customer-focused. They provide great service for
online shopping. When they entered the grocery industry, the industry got
disrupted. When Walmart started 2-day delivery, Amazon started so much more
like a return to nearest Kohl’s store or Amazon store, 1-day delivery. So they
are continuously exceeding consumer’s expectations.
Position – Amazon is a
giant company now with a market cap of around 1 trillion USD. And it uses it’s
position and brand value and the sheer size to get better deals. And because of
their size, it is easier for them to take over other businesses or start a new
one where they can make a profit.
Perspective – Amazon
grew with selling books, they changed the whole industry, from how people
self-publish to how people read books on Kindle (Rao,2011). But they did not
stop there. They are constantly adapting to new situations. Being an online or
internet company they even acquired Wholefoods to go online to offline. And
they made it work because Amazon is constantly evolving ( Boss,2017). This is a
perspective of Amazon’s leadership, that they are not just an internet company.
They will do whatever it takes to stay ahead of the game.
Example for Ancient
Strategic Management: Sun Tzu’s “The Art of War” talks about winning without
fighting. Walmart and Amazon with their huge size can negotiate better prices
with suppliers and as a result, we see companies like Toys are the US is going
bankrupt. This is a great way how big is getting bigger and some are
disappearing from the market.
3500 years back how
Moses delegated tasks to achieve the main mission, we see in every big company.
Executives are wearing different hats but they are working towards achieving
one single mission for the organization they work for. While Jeff Bezos is
Amazon CEO, but along with him there are executives leading different divisions
inside the company (Kim,2019), such as –
Jeff Wilke, CEO of
worldwide consumer
Andy Jassy, CEO of
Amazon Web Services
Jeff Blackburn, SVP,
business and corporate development
Dave Limp, SVP, Amazon
devices, digital management
Brian Olsavsky, SVP
& CFO
David Zapolsky, SVP
& general counsel
Beth Galetti, SVP,
human resources
Jay Carney, SVP,
corporate affairs
Wei Gao, VP Technical
Advisor to CEO
Another a great example is of Trojan horse. Where Greek soldiers hid inside a wooden horse and
attacked Troy and won the battle. We have the whole antivirus industry to stop
such Trojan Horse incident in today’s connected world, that software is
looking out for such virus, malware and protecting our devices. Symantec,
Mcfee, Microsoft, AVG all these companies provide security software to
safeguard our devices from such Trojan horses.
References -
Boss, J (
June,2017). Amazon's Competitive Advantage Isn't Cost Or Convenience, It's
This. Retrieved from
Rao,V(December,2011). Why
Amazon Is The Best Strategic Player In Tech. Retrieved from https://www.forbes.com/sites/venkateshrao/2011/12/14/the-amazon-playbook/#3f69bd993bcb
Kim,E(January,2019). Amazon’s
executive org chart, revealed. Retrieved from https://www.cnbc.com/2019/01/23/who-are-amazons-top-executives-2019.html
Comments
Post a Comment