Amazon.com, Inc. Introduction
This blog is written by a C-cluster student of the Arnhem Business School as an assignment for a HR-accounting class. For this assignment, a blog has to be written that discuss about one multinational company considering different topics: financial accounting, risk management and corporate social responsibilities.
The multinational chosen for this blog is Amazon.com, Inc. and in the first entry the strategy is the topic.
Amazon.com, Inc., one of the largest global online retailers founded in 1994 by Jeff Bezos. It is a service company that sells a wide range of merchandises from books and DVD’s to shoes. Its global headquarters are in Seattle’s South Lake Union neighborhood, Washington and the one responsible for Europe is situated in Luxembourg-city.
Bezos choose the name Amazon because he wanted the company name to be at the beginning of alphabetical lists, secondly he liked the idea of calling his company after an “exotic and different” place and finally the Amazon river is by far the biggest river by drainage, as his aim is to make his company the biggest in the world.
The current logo shows a curved arrow that leads from the A to the Z, which is not only shaped as a smile but also represents that Amazon provides everything, from A to Z.
Our vision is to be Earth's most customer centric company; to build a place where people can come to find and discover anything they might want to buy online.
SWOT of Amazon
A SWOT-Analysis has a closer looks at the internal and external factors that explains the current situation of the company.
- Cost leadership strategy
- Superior quality services and products
- Efficient distribution chain and logistics
- Customer Service
- Global Brand
- Only online presence
- Selling at low margins
- Negative publicity
- Online payment system
- Release more its own brand products and services
- Increase services and product portfolio through acquisitions
- Open more online stores in other countries
- Physical presence (like outlets)
- Growing E-commerce
- Online thefts
- Legislation against tax avoidance
- Regional low cost online retailers
- Growth of competition
5 Strategies from Jeff Bezos that allowed Amazon.com, Inc. to realize their enormous growth
1.Make offers they can't refuse
The negotiations with Amazon has been described a “having a dinner with a godfather”. Amazon.com makes offers that cannot be refused.
2. Don’t give up information when it is not absolutely necessary
Bezos isn’t keen to publish any information. As example they stay mum about the exact sales of their Kindle. No one not directly involved with the Kindle is allowed to set a foot on the floor where the Kindle team works.
3. Keep teams small
He practices the two Pizza rules, which means that the teams shouldn’t be bigger than 5-7 people so that you can feed the whole team with 2 pizzas. According to Amazon this creates more creativity and innovation.
4. Stop talking to much
Even if that seems odd to most of us but cross-team communication is not encouraged by Bezos. He is convinced that it limits independency of the team and the innovation of the company.
5. Get adversarial
One of Amazon’s value is “Have Backbone; disagree and Commit”, which means that they encourage disagreement of the employees. To have a different opinion is encouraged, even if it leads to friction in the company and is exhausting for the company’s members, however this also leads to more commitment of the employees when the decision if once taken.
Jeff Bezos is someone who likes to think outside the box and he is very successful with it. He does the opposite of that what is taught in Business School and proves with thinking outside the box it is possible to become very successful