1. How would you characterize the competitive strategy of Amazon? What are the key customer needs that Amazon aims to fill? 2. Where would you place the demand faced by Amazon on the implied demand u | Homework.Study.com (2024)

FAQs

How would you characterize the competitive strategy of Amazon? ›

Amazon's generic strategy is cost leadership in a broad market segmentation. This is also known as a Type 1 Strategy. A type one strategy is when a company has a large market and it services a varied socioeconomic background, (“Strategic Management:”, 145).

Amazon maintains its competitive edge against other e-commerce giants through several key strategies: Customer-Centric Approach: Amazon prioritizes customer satisfaction above all else, focusing on delivering a seamless shopping experience, fast shipping, easy returns, and excellent customer service.

It has a sustainable competitive advantage

When people buy things, they compare different suppliers on a ranked set of factors. For Amazon customers those factors, or customer purchase criteria (CPC), include price, fast delivery and reliable service.

A differentiation strategy is a business approach in which a company provides its customers with something unique and distinctive that only it can offer. At Amazon, differentiation is done by using technology and human resources. The employees are trained to deliver the best possible service to its customers.

Amazon often uses a pricing strategy called "competitive pricing," in which it looks at the prices of its competitors and bases its prices on those. It helps keep costs low and gives customers a lot of choices. Amazon also uses the following methods to set prices: Promotional pricing.

Amazon's strategy is focused on diversification. At its core, Amazon is an online store. The e-commerce business contributes to over 50% of the company's total revenue but a large portion of the revenue comes from supporting third-party businesses to sell on its platform.

Amazon's retail store rivals include Target, Walmart, Best Buy, and Costco. For subscription services, Amazon competes with Netflix, Apple, and Google. In the web services category, Amazon has several rivals such as Oracle, Microsoft, and IBM.

Walmart is the biggest adversary Amazon has in North America, with online sales of $559 billion in 2021. And while its focus might still lie on physical stores, Walmart keeps investing in technology, development, and marketing to make sure its online presence keeps growing.

Amazon shopping benefits extend to a vast selection of products, competitive pricing, fast shipping options, and exclusive discounts through services like Amazon Prime, further solidifying its appeal to diverse consumer needs.

Amazon is an online retailer that sells a variety of products, including books, music, movies, electronics, and apparel and is very popular worldwide. There are many reasons for Amazon's success, but some of the most important reasons are its customer focus, its innovation, and its willingness to take risks.

How do I stand out from Amazon competition? ›

Amazon's differentiation strategy focuses on a vast product selection, competitive pricing, fast shipping, and excellent customer service. This strategy helps them stand out by providing customers with convenience, value, and a seamless shopping experience, which in turn drives loyalty and growth.

Marketplace Model

Instead of solely relying on its inventory, Amazon smartly opened its platform to third-party sellers, effectively becoming a massive digital marketplace. This decision not only expanded their product range exponentially but also allowed local businesses to reach global audiences.

Amazon's over-arching business goal has shifted; it has evolved from creating a top performing e-commerce platform to becoming the enabler of e-commerce sellers wherever they choose to sell as long as one of those places is Amazon AMZN -1.1% .

A competitive strategy is simply a company's long-term action plan of how to gain an edge over its rivals. The management weighs a firm's strengths, weaknesses, and unique features against those of its competitors to draft a winning course of action. In a way, this is an instrument for outperforming competitors.

The level of industry rivalry among competitors in Amazon's industry is HIGH. Amazon operates in the highly competitive e-commerce market, where there are many large and established players, as well as many smaller and emerging players. Some of Amazon's main competitors include Walmart, eBay, and Target, among others.