how does amazon attempt to achieve product differentiation course hero

What is product differentiation and why is it important?

Product differentiation is what makes your product or service stand out to your target audience. It’s how you distinguish what you sell from what your competitors do, and it increases brand loyalty, sales, and growth. Focusing on your customers is a good start to successful product differentiation.

How is Amazon diversifying its business?

The tech giant has used this advantage extensively to engage in successful business diversification. Recently, the company launched Amazon Home Services, a simple way to buy and schedule local professional services as a continuation of its diversification strategy.

What is Amazon’s competitive advantage?

Started only as an online shop for selling physical books in 1997, today Amazon sells anything that can be sold online in the global scale. Sophisticated global logistics represents one of the solid bases of Amazon competitive advantage. The tech giant has used this advantage extensively to engage in successful business diversification.

Should Amazon be classified as a single industry?

Amazon senior leadership engages in deriving maximum benefit from each component of company ecosystem, as well as, strengthening relationship between the components. Therefore, due to aggressive expansion of range of products and services within Amazon ecosystem, it would not be correct to classify its business operations within a single industry.

What is Amazon's strategy?

investment for fast product development and announces to the online retail market. Diversification. Amazon using Diversification strategy as the least important among Amazon’s intensive growth strategies. The objective of applying this intensive strategy is growth based on new business. For example, Amazon grew through its acquisition of Audible, which is a producer of audiobooks and related products. According to this, for implement this intensive strategy amazon moderately uses acquisition. Cost leadership generic strategy of amazon allows the organization to grow in diversification by applying the same approaches to decrease operating costs and selling prices. Diversification strategy is associated with a strategic objective which is to expand the e-commerce business through an aggressive acquisition strategy. Cost leadership strategy: Amazon clearly using cost leadership strategy. Amazon has processing skills and huge warehouse which give gives amazon economies of scale which gives them cost advantage. Amazon always conscious about the customer feedback. They try to maintain their customer by satisfying their needs, this encourage customer to buy more from amazon and provide delighted feedback as well. To strengthen its core ecommerce operations amazon has multiple acquisitions operations. Amazon also invested in many technological companies such as, harvest, cyber security player. Amazon also expands his business internationally by acquiring other businesses such as souq.com

What is the role of functional strategy?

The primary role of a functional strategy implementation is to support the company's overall business strategy. Functional strategies help in the implementation of the grand strategy by organizing and activating specific subunits of the company to pursue the business strategy in daily activities (Barnat, 2014). “The successful implementation of strategies will require invariably require some degree of change in the organizations resource profile” (Johnson and Scholes,1993). Innovation and continuous growth are the main strategies used by Jeff Bezos in his business, which he achieved through continuous technology improvement and expansion in the form of acquisitions and joint ventures. Because of the lack of management interest many strategies fail. In order to implement a successful strategy, it is important that resources should be allocated to it, The internal and external factors play important role in the success of strategy also. “It isn’t what you do, it’s the way that you do it- that’s what gets results” (Anon, 2003). Jeff Bezos know which strategy implements and when “the timing of a strategy is vital, if one is to get in before a rival aiming for a market advantage with a similar idea” (Anon, 2003). The biggest online retailer in the world is amazon. amazon is working harder to strengthen its European Union presence through expanding its distribution network and reaching into new markets, the Financial Times reported. (Source: (CORPORATE IT UPDATE via COMTEX) — 4 January 2011) Because of its strategic position in the region, it is much attracted by multinationals from all over the world including United States, and Germany etc. Last year, Amazon added 11 distribution centers to its network and Goldman Sachs analysts say that all but two were located outside the US. According to their research, there were three European, five Chinese and one Japanese opening in 2010.

What are Porter's Five Forces?

Those factors are buyer power, supplier power, competition from substitutes, entrants, and rivals. Porter’s Five Forces Analysis for Amazon: - Bargaining power of Amazon buyers: Bargaining power of Amazon buyers is always medium to high in general. As it varies for different customer categories and how the nature of products, services being consumed. Bargaining power of Amazon suppliers: Bargaining power of Amazon suppliers is low to medium. As Amazon deals with different suppliers for their different types of business and the company exercises a vast bargaining power with their suppliers. Threat of substitute products: The threat of substitute products for Amazon is very high. As there are several numbers of other brands like Flipkart, Alibaba etc. have also entered online retail and people also buy products from physical retailers. Threat of new entrants: The threat of new entrants for Amazon is very low. There are many brands who have entered the retail market, but they can't build a brand like Amazon because of the use of digital techniques in marketing and high expenses. Rivalry in the industry:

What is intensive growth strategy?

Intensive growth strategy is to increase research and development (R&D) is a strategic objective

Is Amazon a competitor to Costco?

Walmart and Costco are main competitors in the e-retail business. Strategic financial analysis: The sales of Amazon accounts to $74.5bn according to the report in 2013 as compared to $8.6bn of Alibaba and the estimated online sales of Walmart account to $9bn. There is the high investment of Amazon in future growth and reported earning with a net loss of $437mn. This only resulted in high investments which were made in technology and retail activities. There is a superior value provided to the customers. This is an attractive feature for the company and adds value to the brand. There has been a tremendous growth in top line revealing a revenue CAGR of 29.6 percent. The net income has also deteriorated during the period of 2010 to 2013. There was also average ratio for efficiency and profitability measures. There was a slight improvement during 2013. There was an increase in the assets, revenues and liabilities for long-term value and equity and the net income and operating price was on the decrease. There was also an increase in the gross profit and the gross margin. The economies of scale were revealed in COGS and there was over a proportional increase in the expenses of operation as compared to the revenue growth resulting in the decreasing operating and figures of net income. Amazon also has shown efforts to expand its business by using the high investment activity method and this has also been achieved by increasing CAPEX. Amazon serves as a financially strong company with the successful formulation and implementation of value-creating the strategy.

How to differentiate your product?

Another way to differentiate your product is through bundling. Product bundling encourages customers to buy more products, offering multiple products together for one price. Customers benefit from product bundling because they pay less for each item than what it would cost if they bought each item individually.

How to engage customers off Amazon?

It is vital that you continue to engage with customers off Amazon by using other social media platforms such as Instagram, Facebook, and YouTube. You’d want to connect with customers on a deeper level through “emotional marketing”. One great way is to incorporate real customers into your storytelling that your audience can connect with by illustrating how customers benefit from what you offer.

Why Do You Need to Be Different?

Gone are the days of sourcing for private label products and slapping your own label on it . There are way too many sellers doing that and the only way to stand out is pricing … which tends to become a downward spiral for the lowest prices offered – (and, of course, the slimmest margins).

What is Amazon listing optimizer?

Listing Optimizer helps you scan your Amazon listing page for keywords that you want to rank for, and then identify where in your listing those keywords are not, so you can tweak and improve to be more visible to the largest possible audience.

How to get more sales on Amazon?

In order to generate more sales on Amazon, sellers need to optimize their product listings. Listing Optimization is another way to differentiate yourself. By identifying and adding relevant long-tail keywords and a couple of simple benefits/features, you drive more relevant traffic to your listing which improves your chances of converting sales, are get you one step closer to the “halo-effect” by improving your rank for even more high-traffic keywords on Amazon.

What is the first thing customers see when they search for and buy your product?

You and I both know that first impressions count – and your product packaging is the first thing customers see when they search for and buy your product. Let’s take a look at how Tide’s recent laundry detergent stands out from the crowd.

When choosing products to bundle together, what is the rule of thumb?

A rule of thumb when choosing products to bundle together, select products that complement each other so customers can actually use.

What is Amazon's strategy?

Amazon business strategy can be described as cost leadership taken to the extreme. Range, price and convenience are placed at the core of Amazon competitive advantage. The global online retailer operates with a razor thin profit margin and succeeds due to a combination of economies of scale, innovation of various business processes and a constant business diversification.

What are the four principles of Amazon?

Amazon business strategy is guided by four principles: customer obsession rather than competitor focus, passion for invention, commitment to operational excellence, and long-term thinking . [1] . The following four points constitute the cornerstones of Amazon business strategy: 1. Regularly entering into new niches and segments.

What is Amazon's ecosystem?

Ecosystem is placed at the core of Amazon corporate strategy. Amazon ecosystem consists of merchants, writers, reviewers, publishers, apps developers, and the information market of commentators, analysts, journalists and feature writers who get the word out about opportunity on the Amazon platform. [3] . Amazon senior leadership engages in deriving ...