The Company Diamond:
Amazon’s Company diamond begins at the bottom with its main priorities it has for the company as a whole. These include strong customer service and convenience for the customer. Their capabilities are the processes that the company provides to add more value to their main goals. Some of Amazon’s capabilities include their extremely fast delivery service and their constant NPS involvement in the business. Their fast delivery service is provided in a range of ways for all customers. For the specialty Amazon Prime customers, their subscription allows them to receive free two day delivery for most of the items on their site. In some cities, these customers also receive free same-day and one-day delivery on many items. For other non amazon prime customers, they have the opportunity to get their items fast and free. The company grants free and convenient shipping when customers meet a price requirement by adding filler items into their cart. They also allow customers to include pre purchase items into their cart to avoid extra fees. Their NPS involvement is how the company stays up to date on their customer satisfaction and loyalty throughout the value chain. After purchasing items and receiving items, customers have the opportunity to rate the service and the quality of handling the item once received. If customers are dissatisfied with any part of the process (i.e. it took way longer to arrive than normal, was received damaged, or did not show up at all) they are able to give Amazon a bad review. Amazon takes this and sends follow up emails asking for feedback and ways their customers believe the company can improve in these areas.
The next stage of the company diamond is the resources that Amazon uses to meet their priorities. These are any assets, attributes, information, and knowledge that the company uses to achieve its desired value. Some of the resources include their multiple 400,000-1,000,000 square foot warehouse centers where they handle all distributions, the many acquisitions that have with other companies, their 750,000 employees that all bring value to their business, and their strong database for products worldwide. Amazon’s strengths are the actual ways that give them a competitive advantage over their competitors in the industry. Some of their main strengths include fast shipping, a wide variety of items to choose from and the inclusion of 3rd party sellers to build profits. Throughout the entire company diamond, Amazon has made things happen and have strived to give their customers the best overall experiences with their company. Over the years, they have developed into one of the fastest growing companies that is worth over $124 billion and rising.
VRIO Analysis:
External Analysis
Porter’s Five Forces:
Porter’s Five Forces theory consists of five factors that are key when analyzing a market and when sketching strategies to be successful. Four of these factors apply pressure over the market and intensifies the rivalry within an industry. These factors are: Bargaining power of suppliers, bargaining power of customers, threat of new entrants and threat of substitute products or services. The sum of the ‘pressure’ applied by these four factors lead to the increase of the last and main factor: Rivalry among competitors.
Recommendations
One recommendation that would improve Amazon’s overall competitive advantage is to remain where their feet are and to not get ahead of themselves in the business. The senior management must make sure they are making the conscious and ethical decisions that will keep them moving forward. Because Amazon is so valuable and so many people are both physically and emotionally tied to this company, they must make sure they make every decision to the best of their ability. It takes years to grow a company to the heights that it is at its current state, but a company can be destroyed in seconds with the wrong moves. Lives ruined, jobs lost, and customers having to find new ways to buy products. Amazon’s senior management and board members must make sure they maintain the CSR stages of obligations to economics, legality, ethics, and philanthropy so they remain as one of the best companies in the world.