Amazon a Strategic Approach

“Strategy used to be about protecting existing competitive advantage, but not anymore. Today it is about finding the next advantage.” Vijay Govindarajan

Jeff Bezos not only came up with a practical demonstration of this statement but rather pushed it to the limits. He founded a company, Amazon, with its roots in innovation. Initially,
Amazon.com positioned itself as “Variety Based Positioning” as it focused on selling books online. As their business model expanded they positioned themselves as “Earth’s most Customer Centric Company”. Amazon spent a considerable effort in developing capabilities around its core competency. i.e., online sales. And coupled this with a considerable effort to build an ecosystem around it to drive a unique experience for its customers. In order to kick-start the e-book market and stake out a dominant role, Amazon created its own hardware, the Kindle. It’s interesting to note that Apple built media to support hardware, but Amazon built hardware to support media. The result of this innovation was fairly disruptive.

Amazon then made a brilliant move, once they had established the market, they divided the
Kindle division into two:

• software focused group: get the app on as many pieces of hardware as possible
• hardware focused group: to compete on the merits of its products

Thus giving Amazon the flexibility to drop its hardware and continue focus on core business if
market forces dictated it to. In simple words with its continuous innovation Amazon managed to "do a lot more for a lot less (money) for a lot more (people).” Amazon took another strategic initiative to use metrics to get smarter about customer behavior,
the supply chain, product development, new service models, financials, talent management, and other areas. The ability to use quantitative data to shape decisions and outcomes has become a key source of competitive advantage over the past decade or so. With information technology practically ubiquitous, and computing power and transaction volumes increasing at an accelerated pace, Amazon developed advanced analytical capabilities that helped them to move ahead of competitors.

Technology innovation is a core principle at Amazon.com in creating customer value from the
front-end shopping experience to the logistics behind order fulfillment. Today the amazon
business encompasses online sales, cloud services, online streaming media, software as a service, but that has definitely not prevented Amazon from looking further. So much has Amazon invested itself in technology that it has gone the furthest announcing a new UAV based delivery initiative dubbed ‘Prime Air’ by Amazon’s next-generation R&D laboratory. The proposed solution would use VTOL aircraft to pick up packages from a distribution warehouse and deliver to a customer address. This is definitely going to be a treacherous innovation with cost concerns intertwined with legal conundrums. However this initiative has made one thing clear, Amazon’s resolve to continue with its endeavor in search of next competitive advantage.