Business Strategy

    

 

The five forces are the following:

 Threat of new entrants: To what extent is it easy for new entrants to enter the industry?

Bargain supply power: To what extent may they raise prices or lower quality?

 Buyers' Bargaining Power: To what extent can customers demand more service or select prices?

 Threat of Substitute Products or Services: Are there any other products or services that can replace them?

 Industry Competition: Is there competition among the companies already operating?

Power	Rate	Justification
Threat of new entrants	medium	New sites and small firms are launching despite issues with Amazon since it is so massive, has such a broad network, and is expensive to initiate.
Bargain supply power	Low	Amazon is in a powerful position to negotiate with suppliers since it is a large corporation and sources its products from various suppliers.
Buyers' Bargaining Power	High	Consumers now have greater control, as they can switch and compare prices. Amazon is also under pressure to maintain low prices.
Threat of Substitute Products or Services	Medium	Although there are other options such as ordinary stores and select shopping sites, Amazon is more convenient and offers more choices.
Industry Competition	High	It is in stiff competition with online shopping websites such as Walmart, eBay, and Alibaba, and with rapid growth in cloud computing technology.

 Is the industry profitable?

 Although e-commerce and cloud computing have the potential to earn a lot, e-commerce retail has low profit margins and usually gets impacted by pricing fluctuations and rivalry.

Amazon earns from its cloud-computing service, AWS, which contributes to its overall revenue. Due to its large infrastructure and organization investment, the e-commerce segment is increasing and has a huge number of recurring customers.

By: Abdelrhman Abdelkhalik

Competitive Strategy Amazon Follows

Ø  Amazon's cost leadership strategy focuses on offering the best prices, fast shipping, and a wide range of products to attract a large consumer base. This strategy has helped Amazon dominate the e-commerce and cloud computing markets.

Examples of Amazon's cost leadership include:

·       Efficient logistics and economies of scale to provide reasonable prices.

·       Reduces warehousing costs using automation and artificial intelligence.

·       Amazon Prime offers free and fast shipping, along with exclusive discounts.

·       Amazon Web Services (AWS) generates revenue by funding profitable small retail businesses.

How Amazon’s Strategy Responds to the Five Forces:

Force	Response Through Strategy
Threat of New Entrants	Amazon's production, rapid delivery network, and strong brand loyalty make it challenging for new companies to compete with them.
Bargaining Power of Suppliers	Amazon has substantial negotiation power since it makes large purchases and collaborates with a range of suppliers to avoid becoming overly dependent.
Bargaining Power of Buyers	Despite consumer power, Amazon maintains customer loyalty with Prime benefits, affordable prices, and easy shopping.
Threat of Substitutes	Even when there are other options, buyers are less inclined to switch because of Amazon's wide selection and prompt service.
Industry Rivalry	Amazon continues to outperform competitors such as Walmart and eBay by offering a greater selection, faster shipping, and more affordable prices.

 

 

By: Toaa Abdullah

Primary Activities in Amazon’s Value Chain:

Primary Activity	Description
Inbound Logistics	Amazon has a complex global supply chain, including sophisticated warehouses, inventory management, and supplier coordination to efficiently receive and store goods. It also makes extensive use of automation and robotics.
Operations	This includes order processing, managing distribution centers, and packaging. Amazon uses advanced technologies and artificial intelligence to improve operations and reduce costs.
Outbound Logistics	A fast and reliable delivery network powered by Amazon Prime, our own delivery fleet, and third-party carriers ensure fast shipping to customers worldwide.
Marketing & Sales	The company uses personalized recommendations, on-platform advertising, email marketing, and discounts to attract and retain customers. Amazon's brand loyalty program (Prime) plays a key role in this regard.
Service	Customer support, easy returns and refunds, and technical support for AWS cloud services ensure customer satisfaction and retention.

 

For the structured process, the order fulfillment process can be analyzed—and its support for Amazon's point-of-sale systems, warehouse management systems, and organization support services.

For the dynamic process, the marketing campaign process is analyzed—with a focus on Amazon's use of data analytics platforms, social media support services (such as Amazon Ads), and AI-powered personalization.

Business Processes (Examples):

An example of a structured process is the order fulfillment process (sales process).

This is a routine and specific process that includes receiving orders, selecting inventory, packing, shipping, and invoicing.

An example of a dynamic process is the marketing campaign process.

Amazon dynamically adjusts its marketing strategies based on customer data, trends, and competitor actions. Campaigns can be quickly updated or customized using real-time data and social media engagement.

By Nora Abdelsadek

 

Information Systems Used

Ø  Amazon’s Information Systems

            We discovered crucial Information Systems (IS) that support the structured and dynamic processes chosen for our project by examining Amazon's business operations.

Ø  Methodical Procedure: Order Completion.

            Amazon's Order Fulfilment operation is a highly structured operation that relies on a robust collection of information systems to function well. Amazon's proprietary Fulfilment Centre Management Software is linked to the Warehouse Management System (WMS), the primary system in use. This technology automates important activities such as order selection, packaging, shipping, and inventory tracking. Logistics Information Systems connect with Amazon's internal and external delivery networks to ensure timely and accurate delivery. These real-time technologies, which use robotics and artificial intelligence, allow Amazon to manage massive order volumes with precision.

Ø  Marketing Campaign: A Dynamic Process.

    Amazon employs a variety of information technologies in its dynamic and adaptable marketing campaign approach. The Amazon Advertising Platform serves as the core platform, creating personalized advertising based on user behaviour and preferences via big data and machine learning. Amazon also employs artificial intelligence-powered recommendation engines on its website to personalize product recommendations. Amazon also uses social media platforms such as Instagram, YouTube, and Twitter/X to extend its reach, integrating them with analytics tools to make real-time campaign modifications. These technologies enable Amazon to retain its competitiveness by continually altering its marketing approach and content in response to user interaction and market trends.

By: Moaz Maher

Competitive Advantage from IS

As seen in Figure 2-12, Amazon uses both structured and dynamic processes to obtain a substantial competitive edge by using its Information Systems (IS). Its order fulfilment system, which depends on technology like the Warehouse Management System (WMS), Fulfilment Centre Management Software, and Logistics Information Systems, is a crucial structured procedure. Important processes like order selection, packaging, shipping, and inventory tracking are automated by these technologies, which are further enhanced by robotics and artificial intelligence. Because of this, Amazon can manage large numbers of orders quickly and accurately, which lowers errors and operating expenses while increasing consumer happiness. Customer loyalty is influenced by this well-organised and highly scalable organization infrastructure, which guarantees dependable and quick delivery that many rivals find difficult to match.

 

Amazon's marketing initiatives, on the other hand, are a dynamic process backed by a variety of flexible and data-driven information technologies. Amazon can provide tailored advertisements and product recommendations based on consumer behavior and interests thanks to the Amazon Advertising Platform, big data analytics, machine learning, and AI-powered recommendation engines. By

integrating social media with sites like Instagram, YouTube, and X (previously Twitter), Amazon can communicate with customers more and adjust campaigns in real time in response to user activity and market trends. By consistently improving its customer acquisition and retention strategies, Amazon's marketing adaptability helps it maintain an advantage over rivals.

 

Amazon might launch a gamified loyalty program that gives users points for purchases, reviews, recommendations, or video streaming to capitalise on these advantages. Customers would be less likely to quit the platform and lose their accrued awards, which would result in an additional switching cost. Additionally, Amazon might improve efficiency and product availability by integrating AI-driven inventory forecasting systems into its structured operations. These systems would predict regional demand and modify stock levels accordingly. Lastly, by confirming product origins and ethical sources, using blockchain technology to improve supply chain transparency may draw in ethically concerned customers. When combined, these efforts would strengthen Amazon's long-term competitive edge, increase customer contentment, and increase consumer dependency.

 

By: Youssef Hagag