Amazon’s Resources and Strategic Capabilities – Best Guide(2022)
This article discusses Amazon’s Resources and Strategic Capabilities.
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Amazon’s Resources and Strategic Capabilities
Amazon is the leading e-commerce brand of the world. However, apart from that, it is also a leading cloud player. In the recent years, it has enjoyed fast growth in its revenue and customer base. Both its e-commerce and cloud business are seeing faster growth. The company has built strong trust and brand equity. Apart from everything, Amazon is a customer centric and innovative brand.
The company invests major sums each year in research and development so as to grow its range of technology offerings and improve its platform. The leadership position of Amazon comes from several sources and the company has maintained its edge by focusing on every aspect of business including marketing, customer service, technological innovation and more things.
Take a look at the resources and capabilities of Amazon that have helped it achieve a leading position in the market and retain its competitive edge.
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Brand equity
Brand equity is among the leading strengths of any technology brand. For a major brand to retain its leading position, it is essential to win consumers’ trust. Brand equity is build over time. However, Amazon has successfully built strong brand equity in its life span through its focus on customer service and product quality.
The high level of trust that its consumers place in it has become a leading reason behind its success in the global marketplace. Higher brand equity means higher trust, higher sales and higher revenue as well. Revenue of Amazon reached $232.9 Billions in 2018.
Customer loyalty
Since its foundation, Amazon’s focus has remained on customer service. Strong focus on customer service has resulted in higher sales and fast growth in popularity. Today, it is a leading technology brand apart from being the leading e-retailer. While Amazon has a great pricing strategy, it also has focused on serving customers well, leading to higher customer loyalty.
Its diversified product portfolio is targeted at various customer segments. It has a large and loyal base of middle class customers. Higher customer loyalty means higher sales and revenue while marketing related pressure on a brand is also low. Moreover, Amazon has always focused on customer convenience and through investment in technological innovation, it has continued to improve the level of service it offers on its e-commerce platform.
The result is that Amazon is the e-commerce platform of choice for both sellers and buyers.
Global presence
Amazon is a global brand that offers its products and services online in nearly every corner of the world. Its global presence is also an important reason that the brand has been able to achieve high level sales and revenues. Amazon mainly delivers its services online. However, it has established a large network of warehouses around the world in several countries to make delivery around the world easier.
The company also allows sellers from various countries to sell their products online through its ecommerce platform. In this way, the company has managed a strong and impressive global presence which in turn has proved beneficial for its bottom line.
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Technological innovation
Technological innovation is also a key reason behind the fast growth and global popularity of Amazon. Apart from its ecommerce platform, the company has brought a large range of cloud based services for web developers and enterprises. Amazon invests a large sum each year in research and development. The company is among the leading investors in R&D in the entire technology industry. It is also among the main reasons behind the fast growth of Amazon. It has continued to grow its range of cloud based services and the level of customer service over years. This has led to growth in popularity and demand for Amazon. In 2018, the company spent $28.84 Billion on Research and development.
Product range
Amazon being the leading e-commerce brand of the world offers a very large range of products online. Apart from them the company also offers a large range of cloud based services and technology products meant for developers and enterprises. Amazon’s AWS segment delivers cloud based products and services for developers and enterprises. Apart from that its e-commerce platforms sells millions of products and the company has also brought its own range of products including several Alexa enabled devices as well as Kindle tablets and other several more products.
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Marketing
Marketing is also a key source of competitive advantage for Amazon. Amazon uses marketing for growing demand and sales as well as for branding purposes. In this regard it uses several marketing channels including email marketing as well as other marketing channels like affiliate marketing and online advertising. Amazon also spends a fortune every year on marketing. In 2018, the company spent $13,814 million on marketing.
Related FAQs
1. What are strategic resources and capabilities?
While resources refer to what an organization owns, capabilities refer to what the organization can do. More specifically, capabilities refer to the firm’s ability to bundle, manage, or otherwise exploit resources in a manner that provides value added and, hopefully, advantage over competitors.
2. What are the resources of Amazon?
We take a look at five natural resources in the Amazon that play a major role in all of our lives across the globe.
- Fresh Water. Starting as small streams in the Andes, over 1,100 tributaries converge to form the mighty Amazon River.
- Medicinal Plants.
- Oxygen.
- Minerals.
- Food.
3. What strategic resources is Amazon creating to establish a sustainable competitive advantage?
Amazon has been able to maintain sustainable competitive advantage based on three operational strategies. These are low cost-leadership, customer differentiation and focus strategies. Low cost-leadership is pursued by Amazon by differentiating itself primarily on the basis of price.
4. What are Amazon’s core values?
Amazon is guided by four principles: customer obsession rather than competitor focus, passion for invention, commitment to operational excellence, and long-term thinking. Amazon strives to be Earth’s most customer-centric company, Earth’s best employer, and Earth’s safest place to work.