Amazon Inc.: Business Strategy

Topic: Strategic Management
Words: 919 Pages: 3


Amazon Inc. is one of the first Internet services focused on real goods of mass demand sale and the world’s largest company in terms of turnover that sells goods and services over the Internet. It was founded on the fifth of July 1994 in Bellevue, Washington, by Jeffrey Bezos (Althafairi et al., 2019). This company sells products online and operates in the United States, United Kingdom, Canada, Germany, Italy, and Spain (Hutchins et al., 2019). The major customers of this organization are people from nineteen and older.

Current Strategy

Amazon is, without exaggeration, the company with the most customer-centric vision in the world. It pursues talent strategy, adopted when in 1998 Jeffrey Bezos said that “setting the bar high in their approach to hiring has been, and will continue to be, the single most important element of Amazon’s success” (Ranosa, 2020, para 5). This statement proves the general strategy of Amazon to provide the best service for its clients, and that includes hiring the best people to improve their jobs.

Amazon started as a bookselling company but changed its direction to a more significant number of different products. Their global strategy can be classified as a cost strategy because they sell a wide variety of products at low prices and deliver them fast. Their strengths are their data on consumers and sell to advertisers, their prime membership and clients’ trust, their global recognition, logistics, and agility. Their weaknesses are fragmentation because they sell everything, limited offline presence, and not being friendly to brands in some categories (Table 1). PESTLE analysis shows that the company has advantages in economic, social, technological, and economic spheres (Table 2).

The next big thing in the company’s strategy is the use of environmentally friendly trucks that would allow the company to keep high standards of environmental protection. Moreover, further pursuit of costs reduction strategy could be beneficial due to the inflation and downward trend in household consumer spending.

Table 1. SWOT analysis

Strengths Weaknesses
data on consumers and sell to advertisers
prime membership and clients’ trust
global recognition
limited offline presence
not being friendly to brands in some categories
Opportunities Threats
Increasing the number of customers
Enhancing global presence
Opening offline shops with automatic service
Extending the number and variety of brands sold through increasing the number of suppliers
Rapid development of other online selling companies, such as Ebay
Increasing competition
Possible recession
The downtrend in the households’ expenses

Table 2. PESTLE analysis

Political Economic Social Technology Environment Legal
Political stability of market Significant costs cuts due to offline format;
Cuts on expenses due to the large quantity of goods sold
Customer-friendly on terms of prices;
High level of service;
Allows to make purchase without leaving a house
cloud systems;
Planned use of electric vehicles International regulations to be followed;
International patent

Megatrend and Drivers’ Impact

Amazon Prime Day first happened in 2015′ July as a sale in honor of the company’s twentieth birthday and has continued as an annual tradition (Islam, 2022). Amazon caused the increase in e-commerce demand because of its online course. That tendency launched a wave of demand for fast delivery. While previously everything was brought to retail shops by trucks, the Amazon store provoked the development of shipping products to the consumer directly. Amazon also invests in electric vehicles that are more technologically progressive and clean for the environment.

It is crucial to say that Amazon is not only known for its effect on delivery and retailing but also its influence on internet technology. Amazon Web Services is the company’s subdivision that is engaged in cloud computing and other services related to IT. Their customers are Netflix, Expedia, and Coca-Cola, which use their infrastructure, architecture, analytics, and databases (Bhatte et al., 2022). Amazon Web Services is the leader in the cloud market, followed by Google Cloud and Microsoft Azure (Lorandi, 2022). Thus, Amazon megatrends comprise cloud computing and e-commerce. All these megatrends (technological breakthroughs) and drivers (environmental awareness, partnership models, globalization) affect the strategy because it attracts more attention to the company and its new decisions and innovations.


Even such giants as Amazon need to periodically rethink their strategies and understanding of their identity. Cloud services are a great industry to expand the company because it is a trend now and will develop even more with time. The strategic use of technologies is a key to success and Amazon follows that rule by staying innovative and keeping up with the times. The direction of buying other companies such as Whole Foods Market and Twitch is risky but profitable. That is why they can continue to improve that area of the company’s business. They can also choose the expanding global strategy and start their services in other lands, such as “Scandinavian countries where the population is highly connected as well as have high incomes” (Juneja, 2022, para 10). Even though Amazon is a massive player in the market, they still have many territories to explore.


Amazon secured the name of the most client-centric company, an innovator, a leader. However, it is crucial for it to continue developing to stay competitive. The young audience of the company is one of the main engines that move this machine. Amazon is a well-balanced company that knows how to achieve its goals and does not fear to risk. That is why it is one of the most successful companies of this time. Amazon was founded in 1994 and gained colossal success over the decades. However, watching their new steps after this long path is even more interesting.

Reference List

Althafairi, B., Alhoumaida, N., Saxena, M. & Almsri, Z. (2019) Case study – Amazon. Journal of The Community Development in Asia, 2(2), 1-8. Web.

Bhatte, N., Prajapati, V., Varia, S. & More, J. (2022) Comparison of different cloud providers. International Journal for Research in Applied Science & Engineering Technology, 10(6), 651-655. Web.

Hutchins, B., Li, B. & Rowe, D. (2019) Over-the-top sport: live streaming services, changing coverage rights markets and the growth of media sports portals. Media, Culture and Society, 41(7), 975-994. Web.

Juneja, P. (2022) How Amazon can improve its corporate strategy. MSG. Web.

Islam, R. (2022) Four megatrends underlying Amazon: E-commerce and more. VettaFi. Web.

Lorandi, J. P. (2022) The ultimate guide: An introduction to cloud computing services. Azumo. Web.

Mille, R. (2022) World’s billionaires’ list. Forbes. Web.

Ranosa, R. (2020) Hiring the best? Amazon CEO Jeff Bezos shares his method. Web.

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