Analysis of Strategic Resources in Amazon Company

Subject: Strategic Management
Pages: 5
Words: 1331
Reading time:
5 min
Study level: College

Introduction

Online retailing is a commercial enterprise where only the best firms thrive because of its ever-changing landscape. A company such as Amazon has proven to belong to the class of the best online retail business with its competitive advantages. Since its creation, Amazon has been at the top of attracting many buyers across the world due to the careful establishment of its strategic objectives. Indeed, Amazon’s vision statement has shaped the company’s business operations. The statement has focused on retaining its dominance over other online retailers regarding customer satisfaction. Amazon’s core competencies play a critical role in executing the vision, mission, and objectives and the tangible and intangible resources that other businesses have found challenging to imitate.

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Core Competencies from Amazon’s Vision, Mission, and Objectives

Based on Amazon’s vision, mission and objectives, the company has core competencies that give it a competitive advantage over its rivals. Firstly, the company boasts of excellent customer service in all its transactions. Due to its global omnipresence, the success of Amazon comes partly from its unparalleled excellent customer service (Onyusheva & Seenalasataporn, 2018). Also, Amazon’s online marketplace has many customers who need to guarantee customer satisfaction because of its diverse products.

Secondly, Amazon has the core competency of offering affordable product prices. For instance, many scholars use Amazon’s e-Kindle to purchase books at relatively lower prices than other platforms (Onyusheva & Seenalasataporn, 2018). In addition, Amazon Company has a formidable size and buying power, enabling it to expand its dominance throughout the world. As a matter of fact, Amazon has constructed a powerful business image through strategic marketing, thereby growing to acquire millions of clients across the globe.

Of Amazon’s core competencies, some are rare, costly, or not easily imitated by any online retail company. For instance, it is costly for a company to attain the tremendous size and to buy power that Amazon enjoys (Sadq et al., 2018).

Amazon’s big size has enabled it to partner with various reputable shipping companies that ferry the customers’ orders irrespective of their locations. Undoubtedly, this is critical for executing Amazon’s vision of offering the utmost convenience to its customers by providing goods and services in the comfort of their homes. Furthermore, the rarity of excellent customer service provided by Amazon makes it the best in e-commerce, as the competence cannot be imitated (Onyusheva & Seenalasataporn, 2018). The relatively lowest prices for the uncompromised quality of goods show that the company cares for its clients’ spending and therefore helps it achieve its vision of offering the lowest possible prices (White, 2019). Indeed, the core competencies are costly and rare that other competitors may find them unattainable.

Tangible and Intangible Assets through Application of Resource-Based View

Resource-Based View (RBV) is an essential strategic tool in understanding why Amazon Company has outperformed its competitors, such as Alibaba and Africa’s Jumia. The application of the method to Amazon Company determines the strengths and weaknesses of the business in addition to evaluating the workforce (Miller, 2019). The RBV method differentiates the resources of Amazon Company into two distinct categories.

The first class of resources is the tangible assets, primarily quantifiable physical resources. The infrastructure, financial and human capital and its wide range of products are in the category. The second type of resource is the intangible assets that do not occupy a physical place and they include global brand presence, the goodwill, and intellectual property of the Amazon products such as the Amazon Kindle. However, the intangible assets remain the primary source of Amazon’s competitive advantage and should therefore be used for the company to achieve its objectives.

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Two factors are carefully considered in selecting the aforementioned assets that Amazon can use to achieve its mission. Foremost, heterogeneity of the assets is considered concerning other competitors (Miller, 2019). The investments are identified in a manner that singles them out to differ from what other retailers possess. Moreover, the assets are chosen due to their immobility and intangible assets, which are not allowed to move freely outside the Amazon Company (Miller, 2019). Beyond heterogeneity and immobility, tangible and intangible assets are valuable to Amazon in terms of achieving its objectives.

Undeniably, the tangible and intangible assets are all related to the vision, mission, and objectives of the Amazon Company because of how they help in the execution of the company’s strategies. Infrastructure and financial capital are related to the vision execution when Amazon channels its resources to ensure that it creates a user-friendly site for its customers to remain a customer-centric online retailer (Onyusheva & Seenalasataporn, 2018).

In addition, the assets are important to the mission of offering a diversified range of products for the customers to shop. The vast resources are important in creating sustainable partnerships with producers of different products to ensure that Amazon Company presents a varied selection of goods and services to its clients (Onyusheva & Seenalasataporn, 2018). Accordingly, the assets are crucial for implementing Amazon’s strategic plan, encompassing the vision and mission statements.

Amazon’s Capabilities and Resources

Amazon’s capabilities and resources are difficult to imitate by their competitors due to several factors. For instance, the intellectual property and the trademark of Amazon are protected by United States laws. Accordingly, for a competitor to copy them, they need to obtain authorization from Amazon lest court proceedings are instituted against them by the copyright holder. In addition, a capability such as the ability to offer excellent service is a culture that evolves entirely and therefore reflects the unique aspect of Amazon (Onyusheva & Seenalasataporn, 2018).

This ever-changing nature makes it difficult for any competitor to imitate it because it has been ingrained in the culture of the Amazon Company in a way that the firm places customers at the center of its focus (Onyusheva & Seenalasataporn, 2018). Therefore, if another online retailer were to copy the same capability, it would have to establish the culture of customer-centric first, which would take a lot of time and continuous effort. As evident, the legal restrictions on copyrights transfer and the evolving nature of the resources make the assets and core competencies challenging to replicate.

Further, it is essential to understand the relative value of the identified resources and capabilities of Amazon Company and their potential rarity in sustaining competitive advantage. Through value chain analysis, it can be deduced that infrastructure and all related activities may increase the end-user benefit to the clients as compared to other resources, and hence it has a higher relative value compared to other resources (Miller, 2019). Additionally, there exists a potential rarity in the resources of infrastructure and diversified products of Amazon. The firm’s infrastructure is highly priced and valuable, as in the case of Kindle (Onyusheva & Seenalasataporn, 2018).

Amazon exclusively owns Kindle, a platform for purchasing electronic books, and it is expensive to maintain if another firm establishes a similar resource. Also, the capability to offer affordable prices for its goods and services is rare because its online marketing model ensures that the operation costs remain minimal (Sadq et al., 2019). In essence, the relative values attached to the resources and capabilities, together with their rarity of infrastructure and price affordability, make Amazon Company a leader in online retailing.

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Conclusion

In summary, Amazon’s core competencies are essential in implementing the business strategy concerning the company’s vision, mission, and goals while utilizing its tangible and intangible resources, which are inimitable. In consequence, Amazon Company has core competencies of excellent customer service and affordable product prices. Some of the competencies are rare, costly, or inimitable, which makes them unattainable to most competitors.

Apart from competencies, Amazon also exhibits a plethora of assets that are classified as either tangible or intangible and are dependent on the factors of immobility and heterogeneity to bring sustainable competitive advantage. Notably, the resources and capabilities are associated with the company’s strategic goals, which is why most of them are rare to find in other companies. Therefore, an organization’s vision and mission statements are efficiently executed through the possession of strategic resources.

References

Miller, D. (2019). The resource-based view of the firm. In, Oxford Research Encyclopedia of Business Management. Oxford University. Web.

Onyusheva, I. & Seenalasataporn, T. (2018). Strategic Analysis of Global e-commerce and diversification technology: The case of Amazon. Com. Inc. The EUrASEANs: Journal on Global Socio-economic Dynamics, 1(8), 48-63. Web.

Sadq, Z., Sabir, H., & Saeed, V. (2018). Analyzing the Amazon success strategies. Journal of Process Management and New Technologies, 6(4), 65-70. Web.

White, L. (2019). Amazon VRIO Analysis – Competitive Advantages, Core Competencies. Web.