BA 405
Gresia Gomez
Amazon Case Study
1. What functional-level strategies has Amazon pursued to boost its efficiency?
- In 2012, Amazon purchased Kiva, a manufacturer of robots that service warehouses,
enabling Amazon to embrace automation. This means that the staff needed per
distribution center decreased by 30 to 40%, increasing productivity simultaneously.
2. What functional-level strategies has Amazon pursued to boost its customer
responsiveness?
- Amazon intends to reduce inventory-holding cost while having product in stock by
investing in network and distribution centers that count on a software that analyzes
customer purchasing habits and informs what to order, where to store it, and what
to charge for it and when to mark it down. In this way Amazon achieves delivery at a
more rapid pase at a lower cost.
3. What does product quality mean for Amazon? What functional-level strategies has
Amazon pursued to boost its product quality?
- Quality would mean how well the services or products meet customer’s
expectations. To boost product quality, Amazon would need to control or oversee
the quality of products sold by 3rd parties vendors/sellers/merchants/retailers.
4. How has innovation helped Amazon improve its efficiency, customer responsiveness,
and product quality?
- Amazon has been able to succeed over physical stores by offering a wide variety of
merchandise at a lower price and by eliminating customers’ travel time to stores or
other efforts implied in the process of obtaining the desired product.
5. Do you think the Amazon has any rare and valuable resources? In what value creation
activities are these resources located?
- Amazon’s early investment in cloud-based infrastructure to build Amazon Web
series is a rare and valuable resource because that is believed to match Amazon’s
online business in sales volume, in the near future.
6. How sustainable is Amazon’s competitive position in the online retail business?
- Amazon appears to be ahead of the curve. It started as a retailer of books to later on
be the one digitalizing them for a more convenient usage in this new era where
electronics are increasingly being used. Amazon has implemented new technology
to increase efficiency, and customer responsiveness to improve product quality by
investing in Kiva, resulting on better productivity. Furthermore, Amazon invested on
a cloud based infrastructure to develop AWS. These decisions and actions solidifying
amazon’s competitive position in the online retail business.