Description
Scenario – topic – amazon sustaniable shopping initiative
The funding pitch went extremely well, and you just received word that your idea for the new product/service has been approved. In fact, senior management sent a memo, company-wide, announcing the project.
One line in the memo really caught your attention: “We are eager to see the project to completion and the many other product offerings to come from this initiative.”
You reach out to the project manager (PM) and are told that, typically, senior management expects to see product/service extensions or some type of next steps stemming from an original product. This could include different versions of the product/service, such as cheaper or premium versions, new targeted customers, and more. The PM also adds that senior management will look for contingency planning to protect the funding for the project.
Prompt
For your business continuity plan, consider your next steps, including project improvements and how to mitigate risk to the project to protect the product investment. To accomplish this, you must leverage employee and customer feedback on the new product/service. Additionally, research the market and use a PESTLE analysis to examine if any external factor could affect your new product offering.
Specifically, your plan must address the following criteria:
Business continuity plan: Outline a basic business continuity plan for your business that identifies key business areas and critical functions as well as identifies at least one measure for recovering or maintaining critical business operations in case of an emergency. Include how you will ensure that this plan is followed.
Post-launch stage: Propose new ideas for the post-launch stage, including one idea for a product/service improvement you plan to implement after the initial launch, and one idea for increasing your customer base or engagement after the initial launch.
Feedback loops: Explain how you will implement feedback loops for your product or service.
PESTLE analysis: Use PESTLE analysis to identify at least one external risk factor that may affect the project. Then provide a solution or contingency plan for mitigating that risk.
What to Submit
Submission must be a 1- to 2-page Word document. Any sources cited should use APA formatting.
Unformatted Attachment Preview
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Amazon Sustainable Shopping Initiative
Molly LeCompte
SNHU
BUS 400
10 December 2023
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Amazon Sustainable Shopping Initiative
Company Information
Amazon.com is a multinational technology, Company. The Company provides online
retail shopping services to its customers. Amazon is an online retailer and web service provider.
It deals with products such as auto, apparel, beauty and health products, and industrial items.
Amazon divides its operations into three different segments, including North America, AWS
(Amazon Web Services) and International. North America and International in these categories
refer to the geographical breakdown of where the business conducts its operations (de Assis
Costa, 2018). For example, the North American segment deals with retail sales of consumer
products. The International segment, on the other hand, is centered on the resources generated
from the retail sales of consumer products with the inclusion of subscriptions. The AWS
segment, the Company’s last segment, is comprised of global sales of databases, storage and
computing.
1. Value Proposition
Amazon operates according to the following four principles: customer obsession,
commitment to operational excellence, long-term thinking and a passion for invention. The
Company strives to become Earth’s most customer-centric company, the safest and most
comfortable place to work. According to Jeff Bezos, Amazon has three key value propositions
including:
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Fast delivery of goods and services
•
Low prices/affordability
•
Large and varied product and service choices.
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First, it is necessary to understand that Amazon provides its customers with free shipping
of eligible items. All they have to do is pay an annual or monthly subscription fee on Amazon
Prime. For Consumers, this is increasingly convenient as it enables the fast delivery of their
goods and purchases.
Second, Amazon is customer-centric. It focuses on providing customers with the best
value. From the beginning, the company has focused on offering customers low prices across its
wide selection of products. For the sixth consecutive year, Amazon has been ranked as the
lowest-priced online retailer in the United States (Amiri & Vida, 2023). Their prices are 13%
lower than that of their average competitors.
Third, Amazon has a wide selection of goods and services. It started by offering
customers books and then slowly expanded to DVDs and discs. Now, customers can purchase
literally anything on the Amazon website. This feeds into the brand’s popularity and makes it an
obvious choice for most customers.
The Company’s main product/service:
As previously established, Amazon began as an online bookselling Company. Slowly, the
Company grew to become a band that is largely focused on offering e-commerce, digital
streaming, cloud computing and Artificial Intelligence services to its consumers (Sadq et al.,
2018). Currently, Amazon deals with many product lines, including beauty products, gourmet
food, health and personal care products and even industrial and scientific supplies.
Amazon’s Overall Strategy:
Amazon’s overall strategy is characterized by continuous innovation, operational excellence, a
relentless focus on the customer and investment in different technologies.
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2. Competitive Advantage
New proposition: Expanding into physical stores
Expanding into physical stores is an opportunity for the brand to reach and connect with
new customers. Amazon’s primary competitors, Walmart, Target, BestBuy and Costco, have
successfully established physical stores in different retail markets. Amazon has been slow to
catch up, a factor that has limited its market penetration. Amazon has a limited number of
physical stores compared to other retailers. Recently, the Company has been experimenting with
different store formats, such as the Amazon Go Stores, to provide their customers with a
convenient and innovative shopping experience.
Expanding its physical store presence will enable the brand to better compete with
traditional retailers. Additionally, Amazon will be able to capture a larger share of the overall
market, further promoting the brand in markets where e-commerce penetration has been slow
(Hahn et al., 2018). One important factor to understand is that Amazon cannot entirely depend on
its online model. There is a need to physically connect with the consumers. To offer them
products and services at a physical store where their opinions, viewpoints and ideas can also be
integrated.
One important factor to understand is that prior to this, Amazon had explored the
possibility of opening up physical stores. The move was, however, unsuccessful, which can be
largely blamed on the brand’s marketing and promotion strategy. Amazon needs to do more.
Opening up new physical stores will shift the Company’s value proposition entirely. Amazon is
known for its customer-centric focus, fast delivery and innovativeness. The establishment of
physical stores will largely enhance the customer experience, promote higher levels of
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satisfaction, and increase the brand’s recognition/reputation. The management should explore a
one-size fits all store. They could offer a variety of products in these stores, which will also
eliminate the need for third parties in the supply chain.
3. Risks and Opportunities
Just like any other business, Amazon is faced with a number of risks and growth
opportunities. When managed well, these risks can translate to opportunities that enable the
brand to actualize its goals and objectives.
Some of the risks facing the Company include:
•
Channel expansion and high growth pains
•
The optimization of the technological side of the business, given the newness of
integration
•
The risks of international operations following the economic shifts and downturns that
have been occurring.
•
Government regulations
•
A highly evolving business model that makes it challenging to keep up.
The new proposal to establish more physical stores could potentially disrupt the current
industry. First, it is essential to note that Amazon’s primary competitors have successfully
explored these options. Target, for example, has a total of 1948 physical stores. By establishing
physical stores in the most buzzing locations, Amazon essentially introduces the element of
competition. To stand out against the competition, the brand needs to establish a physical store
that reflects the needs, preferences and wants of its target audience. They can benchmark with
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brands such as Starbucks to generate information and data that can be used to establish highly
efficient and customer-focused physical stores.
Risks associated with the establishment of these stores
There are a number of risks associated with the establishment of these stores. First, there
is the risk of economic downturns/shifts. Physical store purchases are often made with disposable
income. Shifts in the economy can influence the customer’s purchasing power and, ultimately,
the revenues and profits generated by the brand. Secondly, there is the risk of inventory damage.
One of the overarching risks of operating a physical retail store is inventory damage. Damaged
inventory translates to losses. Third, there is the risk of customer dissatisfaction. For instance,
when Amazon tried to open up physical stores, the number of customers trickling in was very
low. Service was slow, and the locations of these stores became inconvenient to the customers.
As a customer-centric brand, more research needs to be conducted on the tastes, preferences and
needs of the customers before rolling out the project.
4. Growth Opportunities
Amazon has a number of presenting opportunities. First, the brand has the opportunity to
expand into new markets (Rigby, 2011). One of the primary ways through which the Company
can increase its customer base and revenue is by expanding into new markets. Whether domestic
or international, Amazon can expand into new geographic zones. Additionally, the brand can
expand its product categories to better cater to the needs of its customers. Potential markets for
expansion include South America or Asia.
Second, Amazon is presented with the opportunity to expand its physical stores.
Expanding the physical store presence is an opportunity for the brand to connect with new
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customer segments. The brand needs to create a tangible shopping experience where the
customers can physically connect with the brand. The establishment of these physical stores will
help increase sales and revenue levels. It will further propel the Company forward and establish
it as a customer-centric brand.
Third, Amazon can introduce an online payment system. Some of the primary concerns
associated with online shopping include security and privacy. Cyber-attackers are becoming
more and more intelligent with their attacks, targeting unsuspecting members of the community.
Amazon has the opportunity to scale up its payment system to accommodate these risks.
Additionally, customers are more willing to engage with a brand that assures them of their
security and privacy. The consequence: The Company’s profit and revenue margins will increase
exponentially.
How does the competitive advantage promote growth?
A competitive advantage refers to a factor/aspect that allows a Company/brand to
produce and distribute goods better than its rivals. It is what sets the Company apart.
Establishing new and improved physical stores will revolutionize Amazon’s supply chain. It will
allow the brand to quickly and efficiently deliver goods and services to its consumers. The
Company will also be able to store and manage orders much more quickly, especially due to the
strategic location of these stores.
5. Distinguish as a new product or innovation
The proposal falls within the innovative category.
The new proposal fits within the capabilities of the Company. It is necessary to
understand that this is an idea that has already been explored. Following the containment of the
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coronavirus, Amazon decided to open its first brick-and-mortar store, a clothing retail store.
Located in Los Angeles, the store integrated machine-learning technology to help personalize
recommendations for consumers and find clothes. The endeavor, however, proved to be
unsuccessful, as observed by the recent closures. Amazon has enough resources to delve into
physical stores. As of 2022, the Company’s consolidated net sales revenues amounted to
approximately $514 billion dollars. The North American segment accumulated $316 billion in
revenues.
Amazon’s SWOT analysis (Zhou, 2023).
Explain how the new product or service adds to the portfolio of the Company.
Opening up new physical stores will indirectly add to the Company’s portfolio. The
existence of additional stores directly supports and promotes the brand’s image. It promotes
growth and expansion and also feeds into the online aspect of the brand. Not only will consumers
access these products online, but they will also physically visit the stores and experience the
products and services before narrowing down on exactly which one they would prefer. It adds to
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the brand’s portfolio by also providing value-added services, which are great incentives for
customer loyalty.
6. Target Segment
The target segment for this proposition is both online and physical shoppers. For a long
time now, Amazon has targeted millennials and baby boomers. A big percentage of this older
generation uses the platform to make purchases and keep up with new trends and patterns in the
market. When opening up these new physical stores, Amazon needs to target the Gen-X and
Gen-Zs. According to an article by Rakuten (2023), sensory experiences and physical
connections do matter to Gen-Zs. A 2019 survey further revealed that approximately 60% of
Gen-Zs are Amazon Prime members. Amazon should explore the possibility of establishing
these physical stores in the United States before delving into other markets.
Blue Ocean Strategy
The Blue Ocean strategy is a business strategy that involves product differentiation, price
advantage and the provision of new products/services to create a separate and new market space.
The blue ocean strategy for the proposition will feature the opening up of new and advanced
physical locations. Amazon will integrate digital and technological elements to appeal to the
target audience. The goods and products will also be offered at a discounted price to influence
customer perception, sales and revenues. Amazon will differentiate itself from competitors in the
market by standing out in the design and location of its brick-and-mortar stores.
7. Speculate on the Projected Sales
This proposition will bolster Amazon’s sales and revenues. According to Alexander
Jeniffer (2023) analysts have studied and analyzed customer traffic at some of the stores Amazon
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had previously opened. An approximate of 550 customers visit the store each day. This translates
to approximately $1.5 million in revenue for each store.
According to data provided by the National Association of Convenience Stores,
Traditional convenience stores of similar size and structure typically generate over $1 million in
revenue. Amazon will be much further ahead compared to its competitors, especially if these
stores are structured and designed to meet the needs of their target audience.
Risks associated with projected sales:
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Some of the risks associated with the projected sales include:
•
Shopper surveillance and affordable marketing
•
Competition from e-commerce
•
Overhead costs
8. Speculate Profitability
Amazon is largely known as an e-commerce Company. In recent years, the brand has
invested in opening up new physical stores across the United States with plans for international
expansion. While these efforts have not necessarily been successful, in 2022, the brand generated
net sales amounting to almost $19 billion U.S. dollars. The proposal calls for a restructuring of
these brick-and-mortar stores. These physical locations need to appeal to the consumers. Amazon
needs to become the one-stop location where a customer can access literally anything, given the
huge product portfolio (Polacco & Backes, 2018). When all these factors are considered, the
profitability levels are bound to grow. For instance, Gen-Zs make up approximately 40% of the
global retail consumers. They have a significant influence on spending and retail purchases.
They have the ability to influence the Company’s profits by more than 30%. Retail generates the
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most profit for Amazon. If the focus is directed on establishing these physical stores, the profits
can jump as high as $25 billion.
9. CSR Plan
Corporate Social Responsibility (CSR) demands that businesses have a corporate social
responsibility to the community. Although unclear, there are so many benefits associated with
CSR in retail. The establishment of physical locations, for example, supports the brand’s CSR
efforts from an ethical perspective. Every item purchased will be easily traced back to the buyers
and manufacturers. Consumers can return plastics and other items that can be recycled and used
again. Additionally, the establishment of these physical stores will influence economic and
regional development in the areas where they are established.
Amazon’s CSR initiative:
Amazon engages in the following CSR initiatives:
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Addressing the immediate needs of the community, such as homelessness and hunger
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Helping communities that have been affected by natural disasters
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Establishing programs that support technology, science and engineering (STEM)
education.
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Providing employment and affordable housing to the community.
It is essential to note that CSR practices can aid a company in gaining a competitive
advantage. It enables the brand to meet its moral obligations, industry regulations and policies. It
reduces the rates of non-compliance and directly affects the brand image and reputation. CSR
also enables the brand to build and create goodwill with employees, stakeholders, consumers and
the government. In the long run, it contributes to the Company’s strategic vision and mission.
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a. Summary of the Project
The proposition deals with the establishment of new brick-and-mortar stores. Amazon
needs more physical locations if it will successfully beat the competition in the market. The
brand also needs to appeal to new target audiences if it wants to remain relevant. One important
factor to understand is that the survival of a company in the market is often dependent on
adaptability, which is the ability to adapt to changes, new trends, and patterns in the market. The
opening up of new physical locations fits into the Company’s overall strategic plan. Amazon is
guided by four principles: innovation, commitment to operational excellence, long-term thinking
and customer obsession. With new and improved physical locations, all these factors can be
fulfilled.
References
Alexander Jennifer (2023) Amazon Go Store: Is it the End of the Checkout Era?
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https://www.sellerapp.com/blog/amazongo/#:~:text=Analysts%20have%20studied%20the%20customer,%241.5%20million%20f
or%20each%20store.
Amiri, S., & Vida, V. (2023). Analysis of marketing strategic issues at Amazon. SEA-Practical
Application of Science, (31), 3-13.
de Assis Costa, F. (2018). A brief economic history of the Amazon (1720-1970). Cambridge
Scholars Publishing.
Hahn, Y., Kim, D., & Youn, M. K. (2018). A brief analysis of Amazon and distribution
strategy. Journal of Distribution Science, 16(4), 17-20.
Polacco, A., & Backes, K. (2018). The amazon go concept: Implications, applications, and
sustainability. Journal of Business and Management, 24(1), 79-92.
Rigby, D. (2011). The future of shopping. Harvard business review, 89(12), 65-76.
Sadq, Z. M., Sabir, H. N., & Saeed, V. S. H. (2018). Analyzing the Amazon success
strategies. Journal of process management and new technologies, 6(4).
Zhou, M. (2023, June). Analysis of the Internet Industry Based on SWOT Model and Porter’s
Five Forces Model—Taking Amazon as an Example. In Proceedings of the 6th
International Conference on Economic Management and Green Development (pp. 247254). Singapore: Springer Nature Singapore.
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