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Nowadays, a certain number of world-famous online retailers provide their services to people around the globe, and of their social status or interests. One such company is Amazon – a worldwide provider of services and goods that offers from books and videos to large industrial and construction equipment. No such organization can survive in the market without being competitive enough. Additionally, since there are always new firms that have something modern and interesting to offer, the existing retailers have to raise their competitive advantage with the help of various methods and strategies. The purpose of this paper is to discuss the competitiveness of Amazon and explore multiple factors related to this concept.
To begin with, it is essential to notice that there are several different strategies for developing a competitive advantage. They are focused on a narrower or broader customer base, lower prices, or better quality. Although all of them are considered effective, it is possible to suggest that the primary strategy of Amazon is a low-cost provider strategy. Indeed, it is hard to disagree that this online retailer is known for its extremely low prices and wide range of goods and services for the broad customer base. Amazon does not focus precisely on sportsmen, business ladies, housemaids, or children (EPC Group.net., n.d.). Instead, the company makes sure that everyone can find something related to their work or hobby and buy it at a low price. The less they pay for a product, the more they want to buy, and this is the trick that provides Amazon with more loyal customers.
Further, seven strategic actions correspond with the chosen competitive advantage plan. As for Amazon, it is possible to say that, in 2020, it went on the offensive and tried to move into the grocery market by opening a new supermarket with no cashiers (Manskar & Kosman, 2020). What is more, in 2017, Amazon acquired another firm – Whole Foods, and this purchase allowed the company to become more competitive and gain insight into high-street shoppers.
Since Amazon was one of the innovators in the market, the company enjoyed an extended number of first-mover advantages. For example, Jeffrey Bezos managed to earn brand recognition for his organization: since it was one of the first online retailers, people knew exactly that they could buy specific items on Amazon (Ettington, n.d.). Further, the company even created its new market for selling online books, and it is evident that they are always ahead of other firms (Ettington, n.d.). What is more, Amazon managed to create a brand-new product – the first e-reader and the company managed to enjoy this first-mover advantage by constantly improving this product.
Unfortunately, there is also the risk of facing certain first-mover disadvantages, and amazon was not successful at avoiding them. To begin with, they had to overcome the risk of having their goods and services copied and even improved by a vast number of competitors (Ettington, n.d.). Further, they had to risks and create a new market and brand-new services and goods with no guarantee that customers would want to buy them. Finally, it was extremely expensive for Bezos to enter a new market and create their own rules, and there was almost no prior experience for Amazon to fall back on (EPC Group.net., n.d.). Despite these first-mover disadvantages, the company managed to overcome them and enjoy the prolonged effects of the first-mover advantages. Nowadays, Amazon has many competitors, including eBay, Walmart, and Apple. Nevertheless, it successfully operates and takes specific strategic actions to reinforce its competitive advantage. For instance, the firm improves its delivery systems, reduces costs without reducing the quality so that its items are cheaper but still attract clients, and also makes the customer experience even more personalized.
References
EPC Group.net. (n.d.). Founder Jeff Bezos discusses Amazon business model mission [Video]. YouTube. Web.
Ettington, D. R. (n.d.). First-mover advantage.Reference for Business. Web.
Manskar, N., & Kosman, J. (2020). Amazon opens full-size grocery store with no cashiers. The New York Post. Web.
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