Amazon.com Inc.’s Transnational Strategy

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Amazon is a Seattle-based Fortune 500 company that was founded in 1994 by Jeff Bezos and launched the next year. Back in a day, the company has become one of the first large Internet sellers. Looking at the industry giant that Amazon has grown to be over the last 25 years, it is difficult to believe that the business had humble beginnings. It started as an online book store; however, thanks to Jeff Bezos’ thoughtful guidance, the range of goods offered on the platform was quickly diversified (Rossman, 2016). Soon, Amazon’s customers were enjoying DVDs, electronics, video games, and clothing. In 1998, Bezos became Time’s “Person of the Year” for his contribution to online shopping.

The Seattle-based company started an aggressive expansion campaign in the 2000s. As of 2019, Amazon runs 13 country-specific sites, and nine countries enjoy Amazon Prime – a subscription-based service with a fast delivery. Prime-eligible countries include the United States, United Kingdom, Spain, Japan, Italy, Germany, France, Canada and Austria. Amazon does not provide any public information on exactly how many people use Prime worldwide. However, apparently, the service is reaching broader audiences at a steady pace. For instance, in 2015 alone, the number of Prime subscribers across the board saw a 51% surge (Statista, 2019).

The question arises as to exactly what competitive advantages allowed Amazon to reach out to foreign markets, especially given the presence of serious contenders. Ever since the 1990s, the world has seen the rise of online shopping and the emergence of such giants as AliExpress, Alibaba, and TaoBao (Enright, 2016). In the case of Amazon, the client’s interests take front and centre of the company’s strategies which capitalise on using every opportunity to harness the unprecedented tech revolution. The passion to serve the customer and gain a competitive advantage over numerous contenders was the impetus to innovation and has become one of the pillars of Amazon’s transnational strategy (Grigorescu & Zaif, 2017). The other important concept behind the corporation’s strategy is the empowerment of partners and collaborators by providing them with various benefits.

Amazon’s success and survivability largely relies on its ability to attract third-party sellers to its platform (Zhu & Liu, 2018). Voigt, Buliga, and Michl (2017) describe the various advantages that small business can gain from joining Amazon. By using an online platform, they have a chance to expand their customer base. On top of that, some businesses may discover that they can get by without having actual physical outlets. One may wonder as to why the relationship between Amazon and its partners matters in the context of running business transnationally and how it has become a crucial part of the corporation’s strategy.

A prime example to illustrate the case of Amazon is its empowerment of small businesses in India. In this South Asian country, Amazon has created an innovative initiative under the name of “Tatkal,” which stands for “instantaneous in Hindi. The initiative facilitates the process of starting an online business with Amazon. It comprehensively demonstrates how a small seller can be ready to start selling on Amazon within an hour. What is interesting is that Amazon’s support for small businesses does not end there. Sawhney (2018) reports that as of 2018, Amazon had started to use vans that visit retailers and suppliers. The vans have a built-in photo studio and bring qualified Amazon employees to take pictures of new products, catalog them, and get everything ready to start a business.

Another feature of Amazon’s transnational strategy is its interest in emerging markets and readiness to face the difficulties that come with entering them. According to Strauss (2019), these four markets will play an important role in Amazon’s e-commerce expansion strategy in the next three-four years:

Turkey. As of 2019, Amazon has become the second-most popular e-commerce site in Turkey in terms of traffic. It is estimated that by 2023, the sales will have generated $345 million as compared to $35 in 2019;
Brazil. In 2018 alone, Amazon generated a revenue of $107 million; the figure is expected to jump up to $1.3 billion in 2023;
Mexico is another crucial market generating as much as $500 million per annum;
India is the fastest expanding market with the potential to account for 13% of all sales by 2023.

To make the entrance into these markets as smooth as possible, Amazon took into account that the countries have emerging economies and their citizens might still experience some difficulties with e-commerce. For instance, in India, around half of the population still uses old phone models with slow Internet connection. The usual version of Amazon would not be loading as fast as expected, so the company decided to provide Indians with a modified app (Winn, 2016). Apart from that Amazon took seriously the fact that delivery in India was strenuous due to the frequent inability to track down residential addresses. This is where the third pillar of Amazon’s transnational strategy came into play: innovation. As of now, Amazon uses artificial intelligence that pins down the locations with a high confidence rate.

References

Enright, A. (2016). Amazon grows services around the world.Web.

Grigorescu, A., & Zaif, A. (2017). The concept of glocalization and its incorporation in global brands’ marketing strategies. International Journal of Business and Management Invention, 6(1), 70-74.

Rossman, J. (2016). The Amazon way: 14 leadership principles behind the world’s most disruptive company. Bellevue, WA: Clyde Hill Publishing.

Sawhney, M. (2018). 7 ways Amazon Is winning by acting ‘glocally’ in India. Web.

Statista. (2019). Amazon Prime – Statistics & facts.Web.

Strauss, D. (2019). These 5 key markets could help Amazon’s international retail business explode.Web.

Voigt, K. I., Buliga, O., & Michl, K. (2017). Creating the Global Shopping Mall: The Case of Amazon. In Business Model Pioneers (pp. 67-77). Springer, Cham.

Winn, J. K. (2016). The secession of the successful: The rise of Amazon as private global consumer protection regulator. Arizona Law Review, 58.

Zhu, F., & Liu, Q. (2018). Competing with complementors: An empirical look at Amazon.com. Strategic Management Journal, 39(10), 2618-2642.

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Amazon.com Inc.’s Transnational Strategy

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