Discuss about the Amazon Strategic Management for Compact Disks.
Technology is part and parcel of the day-to-day activities of a human being. In this era, individuals seek for technologies which can help to ease various functions of their life. This paper focuses on the case study of Amazon which released a tablet dubbed as kindle fire for the purposes of allowing individuals to have access to electronic publications. This case study is intended to relay the analysis of business and strategic management that followed after the launch of Amazon kindle fire by the Chief Executive officer for Amazon, Jeff Bezos (Hitt, 2017). It is important to note that Amazon Kindle Fire was meant to have their customers have all Amazon’s experience in their laps. This meant that Jeff Bezos believed that the device would create a fulfilling experience for the customers. In the bid to make this a reality, Amazon was willing to finance the hardware device for the product (Hitt, Ireland and Hoskisson, 2016). This was with the assumption that it would lower the overall cost of the product thus increase its purchase. In the light of the above knowledge, this paper critically analyses the case study of Amazon’s invention of Kindle Fire, their strategic environment, and future strategies.
Amazon has been known to be one of those organizations which are profitable and ahead of revenues. It is largely known for selling products such as books, compact disks (CD) and various households’ items (Sinaga, 2001). In this regard, it was little surprise that it came forth with a new invention to spur up the market for tablets. The Kindle Fire is a unique electronic device that encompasses amplified e-reader functionalities while at the same time trying to incorporate basic tablet capabilities to woo tablets buyers. At this point, the Kindle Fire acts as device baring to capabilities, one for a tablet and the other of e-reader capabilities. In this regard for a layman, one can point that the Kindle Fire is a tablet e-reader. It is momentous to comprehend that since its founding in 1994, Amazons’ first kindle an e-reader was developed in 2007. Over the years, kindle touch, kindle keyboard and other versions which can access the internet were developed. However, the invention of the Kindle Fire in September 2011 was what broke the market for this online retailer.
When a closer look is taken at the environmental surroundings in regard to the Kindle Fire invention by Amazon, there are a lot of generic elements that erupt. On the financial part, Amazon comes with a relatively cheap price due to the company financing the acquisition of the hardware product. As per Britannica Book of the Year 2012, (2012), the Kindle Fire comes with a low price of two hundred United States dollars hence having a competitive advantage from other tablets which cost around six hundred United States dollars. In comparison to e-readers, kindle fire is a bit expensive because e-readers cost an average of one hundred United States dollars. However, additional features such as bigger storage, increased uses such as internet and games makes it worthwhile. As a physical element, the kindle fire falls between an e-reader and the tablet of seven inches (Rich, 2012). The price for Kindle Fire is less compared to e-readers and a little bit lower as compared to other tablets. A technical examination for Kindle Fire brings into light providing an enhanced e-reader experiences with state of the art color combination, in addition, the device, is more compact with a large storage space, durable and tactile. On the other hand, it serves as a tablet because it has features such as gaming content, access to application and internet. However, one of the drawbacks of this device is the location of its power button. The power button is located at the bottom of the device which makes it difficult to power on and off.
The Amazon Kindle Fire has an impact on the social-cultural environment. The Kindle Fire provides a unique experience to e-reader users who do not fancy full tablets regardless of the price. Amazon has enhanced readership culture among many individuals. With the current generation who seeks to have intellectual nourishment and at the same time seeks to have entertainment, Kindle Fire serves as the best device. This is because it offers different applications with convenience on one device. Kindle Fire has been juxtaposed as a device which serves different kinds of people, those who have attitudes of owning many devices for different uses and those who are keen on prices. In the global environment, Kindle Fire has impacted a lot of Android tablet vendors (Jennex, 2014). This means that Android vendors across the globe are forced to confirm their prices to reflect the price that Kindle Fire is selling at. The ecosystem of Kindle Fire is what lives android tablet developers out in the cold. This is especially when it comes to application. While Kindle Fire can allow users to have localized running apps, other android developers depend on Google for the provision of selected applications which are a cliché (Mena, 2013). In addition, most of the android tablets look the same while Kindle Fire is different due to its differentiating ecosystem.
When an individual takes up the Kindle Fire, one will realize its technical strength. The screen resolution and the color combination of Kindle Fire are perfect. The touch sensitivity of Kindle Fire is good as compared other high-end tablet in the market today. In addition, the seven-inch size of the Kindle Fire provides a good e-reading experience and also a good video streaming experience for a user. The kindle fire high definition has a forty percent higher Wi-Fi with an eleven-hour-long battery life (Conder and Darcey, 2012). The Amazon Kindle Fire has few legal impacts on the legal and political environment.
As far as demographics in regards to Amazon’s kindle fire is concerned, certain demographic elements seem suitable for the device than others. According to Hitt, Ireland and Hoskisson, (2016) Children and individuals who are highly educated have been selected as targets for the product. The large storage, durability, the applications of games and also the affordable price of two hundred United States dollars make parents see kindle fire appropriate for their children (Hill-Whittall, 2015). The device has been designed in such a way that it can be able to seamlessly display textbooks with their corresponding texts, graphs, highlighting among others, a partnership with publishers serves as a worthwhile endeavor. Ultimately, its low price makes any individual who is willing to have a tablet in possession, kindle fire will be the first option.
It is important to note that Amazon operates majorly in the United States, Italy, Spain, Germany, France, and parts of the United Kingdom (Turban et al., 2017). However, this does not mean that people from Australia do not use Amazon products such as Kindle Fire. Kindle Fire is just like any other tablet technology in the market with few enhanced features. Since technology serves as the backbone of economic activities in countries such as China and Japan. This means the supply power for the hardware and the software that make up the product is high. On the part of supply power of the Kindle Fire product, it is appropriate to say that it is not stable since there are issues that touch on the advancement in technologies and that it covers a few countries as compared to normal tablets which can be supplied worldwide. The buying power for the Kindle products as far as the targeted customers are concerned is high. This is because Kindle Fire is pocket-friendly where a person earning average salary can afford. The Nook tablets by B&N, publishing firm is a new entrant which has given Amazon’s Kindle Fire a run for their money. It is very easy for people to purchase books as well as e-reading platforms from one dealer instead of spending a lot of time purchasing a tablet from another source.
On the contrary, there are other competitive products such as Apple’s iBook and Newsstand applications are giving amazon sleepless nights as far as the sale for Kindle Fire is concerned (Davis, 2014). It should be understood that Kindle Fire is concerned on how its customers use the product for it to make money. This is contrary to tablet products for Apple where if bought and if used, the company would still make money. This implies that Amazon needs to sell its products from interested buyers only who would use the device by buying contents from it. In this regard, companies such as Apple, do not view Kindle Fire as ultimate competition as it would still make more money (Rich, 2012).
Amazon is introducing a new product into a market that already exists. This implies that the product was expected to focus on the product development and enhancement in order to have a smooth sail into the market. When Amazon advertises Kindle Fire there is no mention of the word tablet. This is because the target group for the device is people who can be able to buy content from the device so as it would be able to make money from the product. As much as Amazon would like to sell more than the product to a customer, in the same manner, that Sony, Microsoft, and Nintendo sold their gaming console with the hopes that their customers would use them for a substantial period of time. Apple, Microsoft, and Samsung use a different method where they instill in their customers the need to upgrade their devices, a method that makes Kindle Fire’s future in the dark.
Amazon has many opportunities regarding expanding its market in the sale of their Kindle Fire product. One of the opportunities is innovation. In the world of technology, innovation is one of the best-selling points (Hill and Jones, 2012). The reason why Amazon still holds as the nest leading online retailer is that of its innovative nature is coming up with new products and services. As much as the Kindle Fire faces a lot of competition from big brands such as Apple, Samsung, and Sony, there are opportunities to make the hardware of Kindle Fire make money without selling its contents. The Amazon Web Services (AWS) for delivery of products are other ways of ensuring that the company still generate revenues. As per Noble, Griffin and Durmusoglu, (2015), Amazon has been able to acquire loyal customers while at the same time it tries to expand its customer base. In that connection, loyalty can result in sustainability for the company even in hard times. Due to the big size of the company, it has the opportunity to sell their products at a lower price in the bid to sell more units. This is dubbed as bait and lure model.
Amazon has experienced threats such as the new entrants in the market, for instance, the B&N who have forced Amazon to sell its products at a discount. Kotler et al., (2015), asserts that competitors such as Apple’s iPad, are imitating Kindle Fire e-book capabilities. The threat of Amazon having an e-commerce selling point is a threat since many customers would want to have a feel of what they are going to purchase.
Amazon enjoys the asset of goodwill among many customers both loyal and potential customers. The goodwill is measured using the balance sheet where the profits increased yearly. Innovation is an intangible assent that Amazon enjoys greatly (Peng, 2013). For a company to stay in the market as long as Amazon, it must come with innovation so as to be in tandem with the changing generation. According to Hitt, Ireland and Hoskisson, (2011), Amazon brand acts as an intangible asset as it is the only company which is known largely in retain online sales. The information technology such as the drones for the delivery of products such as books is an intangible asset (Berry, 2005). The property and equipment that belong to Amazon act as tangible assets. They include money, furniture, software and premises among others
Strategic capabilities of Amazon has been a reason for its long survival. Strategic capabilities are composed of the resources in terms of technology and the premises that the company possesses. The physical capabilities which include the products, warehouses, patents and customer database are consequential to the company survival. The employee motivational programs are important to the service delivery that Amazon offers.
Amazon Company own a very large space which can accommodate a significant number of customers. Amazon has twenty-five million square feet of warehouse space. In addition, Amazon has the hold of ten percent of North America loyal customers who have an affinity for e-commerce mechanisms. The ability of the company to come up with innovations such as the Kindle Fire serves as a core competency (Bali, Wickramasinghe and Lehaney, 2009). Logistics innovation such as the use of drones to deliver products provides efficiency of services which make the company have a lot of customers. The e-books that Amazon provides makes it spend less in distribution costs thus making more profits. The fact that its sales its products at low prices in a bid to sell more unites gives it an advantage over other competitors.
Amazon does not have a long-term contract with any of its vendors to guarantee the availability of its products. Its inbound logistics is the backbone of Amazon’s success. Amazon sale points are separated into three segments North America, international and amazon web services which offers activities such as software services for institutions. In the bid to manage its big market, Amazon has outbound logistics such as FedEx and TNT. The company has plans to lease twenty Boeing 767 freighters in a bid to reach international markets. Amazon sales have been increasing every year. This is because Amazon marketing message focus on fast delivery of products which is number one priority of its customers.
Amazon has only two weakness, one of them is that it does not permit sharing of the e-books due to copyright issues (Strauss and Raymond D., 2016). Another weakness is the dwindling of the stock price.
Amazons use cost leadership generic strategy in order to have a competitive strategy over its competitors (Pantano et al., 2004). This is the continuous improvement of its information technology structure and heavy investment in its research. One of the amazon’s strategy is market development. Market development is Amazon’s primary strategy for its market growth. In this market development strategy, Amazon seeks to have entered into new markets. Case in point, initially Amazon used to provide its retail services only in the United States. Recently, the company has expanded its market base up to ten different countries that include, China, Canada, and the United Kingdom. With a new website that conforms to a country, Amazon believes that venturing into new countries provides another opportunity to have access to new markets.
Market penetration is another strategy that Amazon uses to be relevant in the market. The interest of many people to shop in online activities have encouraged amazon.com. The generic strategy has made Amazon have many customers who make Amazon sell its products at low costs thus giving other companies a run for their money (Plant, 2000). Product development is a strategy that is very dear to Amazon’s growth. It is no doubt that the ability of Amazon to develop new products makes it have more customers. Amazon products such as Amazon Web Services (AWS) ensures that the company makes revenues from different avenues. Diversification is another strategy that Amazon uses. This implies that Amazon sales a lot of income-generating activities other than online retailing to make a profit and reduce risks (Wynn-Williams, 2017).
The future of Amazon can be best sustained by applying strategies such as dynamic pricing. This can help the company get rid of new entrants such as B&N who give competition to Kindle Fire by offering their products at a lower price. By having the knowledge of the real-time purchasing power and act accordingly, no entrant will be able to outdo Amazon (Yeoman and McMahon-Beattie, 2004).
Sidestepping the economies of scale is one of the future strategies that Amazon can use to advance in its market for a long time, many business people believe that reducing the costs of the product by reducing the quality assist business make profits. Amazon can make its products deposable by focusing on the content of a product rather than the outside hardware of the product. This makes a product to have low cost thus making an individual be able to purchase another hence ensuring a company make profit from high sales (Stalk and Butman, 2008).
By embracing complexity in their products as a strategy, Amazon can be able to provide a competitive advantage for their customers. For example, the fact that Amazon produced a complex device dubbed as the Kindle Fire which could be able to act as a tablet and as an e-book reader ago, gave big companies such as Apple and Samsung fierce competition. As much simplicity is the mantra of the day, when it comes to technology, simplicity does not hold any waters.
Having products in which its use is controlled is a future strategy that Amazon should take advantage of. In this regard, Amazon should learn a lesson from itself with the coming up with a device that is unlike other products in the market. For instance, the Kindle Fire is user controlled, unlike Apples iPad. This is because the product contains ports such as USB which makes a lot of users prefer the product as compared to iPads which do not contain such ports which are essential to a techno survey being.
In conclusion, Kindle Fire is more than an e-reader. It serves as a table in which tablets are used for content consumption. This is crystal clear that Amazon used a clever way to ensure that its content is delivered to the customers in a form that their customers can be able to relate to. With its cheap price, the product has been able to give stiff competition to big players in the market such as Apple, Samsung, and Sony. As much as new entrants such as B&N are giving competition to Amazon’s Kindle Fire. There new strategies such as ignoring economies of scale, tolerating complexity, and embracing real-time pricing.
References
Bali, R., Wickramasinghe, N. and Lehaney, B. (2009). Knowledge management primer. New York: Routledge, p.32
Berry, J. (2005). Tangible strategies for intangible assets. New York: McGraw-Hill, pp.29-31.
Britannica Book of the Year 2012. (2012). Encyclopaedia Britannica, Inc, p.219.
Conder, S. and Darcey, L. (2012). Android wireless application development. Upper Saddle River, NJ: Addison-Wesley, p.166.
Davis, V. (2014). Reinventing Writing: The 9 Tools That Are Changing Writing, Teaching, and Learning Forever. Routledge, p.34.
Hill, C. and Jones, G. (2012). Strategic Management Cases: An Integrated Approach. Cengage Learning, p.282.
Hill-Whittall, R. (2015). The indie game developer handbook. CRC Press, p.111.
Hitt, M. (2017). Strategic management. New york: Cengage learning, p.50.
Hitt, M., Ireland, R. and Hoskisson, R. (2016). Strategic management. 12th ed. Cengage Learning, p.27.
Hitt, M., Ireland, R. and Hoskisson, R. (2011). Strategic Management: Concepts and Cases: Competitiveness and Globalization. Cengage Learning, p.80.
Jennex, M. (2014). Knowledge discovery, transfer, and management in the information age. Hershey, Pa: Information Science Reference, p.127.
Kotler, P., Burton, S., Deans, K., Brown, L. and Armstrong, G. (2015). Marketing. Pearson Higher Education AU, p.108.
Mena, J. (2013). Data Mining Mobile Devices. CRC Press, p.233.
Noble, C., Griffin, A. and Durmusoglu, S. (2015). Design Thinking: New Product Development Essentials from the PDMA. John Wiley & Sons, p.126.
Pantano, E., Gerlach, S., Dennis, C. and Merrilees, B. (2004). E-Retailing. Routledge, p.183.
Peng, M. (2013). Global Strategy. Cengage Learning, p.65.
Plant, R. (2000). Ecommerce. Upper Saddle River, NJ: Financial Times/Prentice Hall, p.10.
Rich, J. (2012). How to Do Everything Kindle Fire. McGraw Hill Professional, p.8.
Sinaga, R. (2001). Amazon Marketplace: Getting Started in the Amazon Marketplace. Private Label Rights, p.5.
Stalk, G. and Butman, J. (2008). Five Future Strategies You Need Right Now. Harvard Business Press, p.30.
Strauss, J. and Raymond D., F. (2016). E-marketing. 2nd ed. Routledge, p.63.
Turban, E., Whiteside, J., King, D. and Outland, J. (2017). Introduction to Electronic Commerce and Social Commerce. Springer, p.69.
Wynn-Williams, M. (2017). Managing Global Business. Palgrave Macmillan, p.38.
Yeoman, I. and McMahon-Beattie, U. (2004). Revenue Management and Pricing: Case Studies and Applications. Cengage Learning EMEA, p.38.
Essay Writing Service Features
Our Experience
No matter how complex your assignment is, we can find the right professional for your specific task. Contact Essay is an essay writing company that hires only the smartest minds to help you with your projects. Our expertise allows us to provide students with high-quality academic writing, editing & proofreading services.
Free Features
Free revision policy
$10Free bibliography & reference
$8Free title page
$8Free formatting
$8How Our Essay Writing Service Works
First, you will need to complete an order form. It's not difficult but, in case there is anything you find not to be clear, you may always call us so that we can guide you through it. On the order form, you will need to include some basic information concerning your order: subject, topic, number of pages, etc. We also encourage our clients to upload any relevant information or sources that will help.
Complete the order form
Once we have all the information and instructions that we need, we select the most suitable writer for your assignment. While everything seems to be clear, the writer, who has complete knowledge of the subject, may need clarification from you. It is at that point that you would receive a call or email from us.
Writer’s assignment
As soon as the writer has finished, it will be delivered both to the website and to your email address so that you will not miss it. If your deadline is close at hand, we will place a call to you to make sure that you receive the paper on time.
Completing the order and download