1.

Introduction to the company

Amazon.com, or Amazon, is one of the American giant players in the field of e-

commerce and cloud computing business. Founded by Jeff Bezos in 1994, this company started
as a bookstore available online for everyone. In a month of its commencement, the organization
had as of now delivered books to more than forty various nations. Amazon's prosperity begun
with one small item classification, which is books, yet it didn't remain as such. Jeff Bezos had
the possibility that Amazon would turn into "the everything store", and it did. Amazon has
changed the way how shoppers and sellers interact by introducing an online platform where a
wide range of products and services are provided. The presentation of the Kindle didn't beat
other tablets to showcase, however Amazon's turned into the most well-known company. Since
that day, Amazon has kept on developing into one of the world's biggest online organization.

2. Company data

What started about 23 years ago as a web based bookselling try has courageously
advanced into a retail leader that is dreaded and regarded by different retailers (Ellis, 2017).
Truly, Amazon has turned into a relentless constrain in web based business. Yet, since it
permits all stores to offer by means of its stage, it truly is not attempting to contend. Amazon
has become the winner unusual approach. With more than 107 billion USD of net sales in 2015,
the giant Amazon is leading in the United States e-retail field (Statista, 2017). Most of the
organization's incomes are created through the offer of electronics, trailed by media and various
other items. As of the last quarter of 2015, Amazon revealed more than 304 million client
accounts that are active around the world (Statista, 2017). Because of Amazon's worldwide
extension, it is likewise viewed as a standout amongst the most valuable brands around the
world. In the two decades that it's been around, Amazon has kept on growing at a impressive
pace (Ellis, 2017).

Amazon does lead as far as desktop retailing as well as taken to portable business
(Ellis, 2017). Recent report demonstrates that Amazon’s mobile products reach 68.6% of
smartphone users in US, ranked number fourth, after Google (92%), Facebook (84.6%), and
Yahoo (83.2%) (Fox, 2017). In addition, the retailer also offers Amazon Prime, a membership
that is paid every year, offering free two-day dispatching in the United States and marked down
one-day shipping rates, which current clients view as the key purpose behind subscribing to the
website. The normal online consumption of Amazon Prime individuals in the United States adds
up to USD 58 per exchange, contrasted with USD 41 of a non-Prime clients (Statista, 2017).
The organization likewise offers its own particular line of individual electronics, above all is the
Kindle product. Initially offered as an essential tablet, the Kindle has unequivocally affected
digital book deals. The current Kindle Fire tablet run has changed into a line of gadgets that
additionally empower the utilization of media inside the Amazon biological system (Ellis, 2017).
As indicated by a study of Prime family units, Amazon Prime Video was the most well-known
esteem included computerized benefit, trailed by music and digital book rentals (Statista, 2017).

3. Business reasons behind the success

Amazon has figured out how to change itself from an online book shop to one of the
world's key web based shopping places. Creating from a start-up to one of the biggest
organizations on the planet in marginally over 20 years, it has become one among the top
leaders in the industry. Reasons for the company’s success include: leadership, diversification,
customer orientation, and innovation.

Leadership: At the beginning, book deals were Amazon's demonstrating ground.

However, the company doesn’t stop there. Bezos imagined them as the initial move towards
making the "everything store" that he imagined ("7 Reasons Why Amazon Is So Successful",
2017). This methodology, which is beginning with one particular item and building a solid
internet business framework around it before enhancing, let Bezos gradually transform Amazon
into a web based business mammoth

Diversification: Today, Amazon offers pretty much everything, from books and films to
garments and basic supplies. Through overwhelming interest in development, proficient
utilization of stock on account of an absence of physical retail facades, and a great many
outsider offshoots, Amazon.com has an unmatched cluster of brands and items ("4 Success
Lessons From Amazon's Jeff Bezos", 2017). A client searching for a different crate of
merchandise including golf clubs, an extra-large flat screen TV, gourmet jam beans, and a
fashioner purse will be unable to discover these things somewhere else with free sending, not to
mention a solitary store that has everything and the capacity to convey it the following day. This
assortment and accommodation makes Amazon.com the best place to begin with any web
based shopping ("4 Success Lessons From Amazon's Jeff Bezos", 2017).

Customer orientation: Amazon continuously positions high on the list of customer

satisfaction. The organization trusts that clients must be dealt with unique, and that an
organization shouldn't concentrate on its rivals yet rather on its clients (Shaw, 2017). Amazon's
most essential lesson originates from the expression "word of mouth" (Shaw, 2017). Keeping
this in mind, Amazon’s essential key for success is customer service. All things considered, a
large portion of the items they offer can be discovered anyplace online. There are online book
shops, online music stores and online apparel stores. At the end of the day, there are no
different retailers that show improvement over Amazon. In any case, what genuinely makes
Amazon better than any one else is its superior customer services (Shaw, 2017).

Innovation: Amazon.com is continually improving and finding better approaches to

convey item while all the while expanding consumer loyalty. Amazon has a dream of a period
when Amazon gets ready to dispatch an automaton to convey items before customers even
understand that need to request those products. There are plenty exmples for Amazon’s
innovation, including its Kindles, Amazon Prime, Amazon Flow, Amazon Locker, etc ("7
Reasons Why Amazon Is So Successful", 2017). Looking ahead, Amazon.com keeps on
discovering approaches to make the buyer encounter less demanding with experimentation in
staple conveyance, expectant transporting, and even conveyance by automaton. Persistent
innovation is also one of the keys to success of Amazon.com ("7 Reasons Why Amazon Is So
Successful", 2017).

4. Value chain and VRIN evaluation

Amazon’s value chain: Value chain analysis by Porter (1985) is a framework that helps
identify business activities that are able to bring competitive advantage and value to the
organization. Porter (1985) contends that there are just two sorts of competitive advantage:
differentiation -the one that originates from being different, and giving some sort of special
values to specific clients, and cost leadership – the one that originates from being able to
operate with lower costs. Porter (1985) trusts that these competitive advantages arise from
activities that shown improvement over contenders; done another way than contenders; that
make one of a kind advantages; or done at a lower cost than contenders. According to Porter
(1985), there are two main types of activities: primary and support activities. Primary activities
include inbound logistics, operations, out bound logistics, marketing and sales, and service
(Porter, 1985). Support activities include firm infrastructure, human resources, technology
development, and procurement. The value chain analysis of Amazon is presented as below.
From the value chain analysis, it is obvious that activities which bring competitive advantages to
Amazon include inbound logistics, operation, outbound logistics, service, firm infrastructure,
human resource management, technology development, and procurement.
 Primary activities

Activities Strategies Explanation Cost Differen

leadership tiation
Inbound Fulfillment by By using FBA, Amazon is fully Yes Yes
logistics Amazon (FBA) responsible for its logistics, inventory,
and product return (Amazon.com,
2017). FBA makes the third-party
sellers’ products available for Amazon
Prime’s benefits, such as 2 day-
shipping, etc.
Operations -Amazon - Amazon Marketplace operates in a Yes Yes
Marketplace global scale (Amazon.com, 2017).
-Amazon Prime -Amazon Prime is able to provide Yes Yes
products with competitive prices and
quick shipping (Amazon.com, 2017).
-Amazon Web - Amazon Web Services is a platform - -
Services offering cloud storage, computing
service, and building applications, etc
(Amazon.com, 2017).
Outbound Robotic Amazon uses robotic technology to Yes -
logistics technology support the logistics activities at low
cost (Amazon.com, 2017).
(Amazon.com, 2017)
Marketing The integration Marketing communication tools - -
and sales of several types include print media, promotion, online
of marketing marketing, public relation, etc.
communication
Service Selling Coach Amazon offers best experiences to its - Yes
program customers that include both sellers
and buyers. Amazon provides the
selling coach program to help sellers
be aware of their current inventory
situation, and help them to adjust their
prices to be more competitive
(Amazon.com, 2017).
 Support activities

Activities Strategies Explanation Cost Differen

leadership tiation
Firm Innovative, Amazon's corporate culture Yes Yes
infrastructure customer- strengthens the organization's
centric culture spearheading endeavors in this kind
of online retail business. It is the type
of culture that supports innovation,
encouraging new thoughts to
enhance Amazon. Another preferred
standpoint of this culture is its
concentration on the client,
guaranteeing that the organization
dependably fulfills customers’ desires
and inclinations (Amazon.com,
2017).
Human Employment Plenty of programs for employee Yes Yes
resources empowerment empowerment were led to channel
management programs and center Amazon's staff's
inspiration, mastery, learning,
advancement and experience, which
are the key skills in term of human
resource. These incorporate Career
Choices, which pays for
representatives to take course for
sought after fields, Pay to Quit, which
pays for employees to stop their
occupations, urge individuals to
consider their vocations and take out
the undesirable parts of the
organization, and Virtual Contact
Center for working-at-home-
employees to answers clients
 (Amazon.com, 2017).
Technology -Amazon Large investment in technology Yes Yes
development Web Services development. Some technology
includes EC2 and S3, one click
payment, customer database, etc.
(Amazon.com, 2017).
Procurement Negotiation Ability to negotiate to get the lowest Yes -
ability price

VRIN: VRIN framework was developed by Barney (1991) to help company define
whether their resources and competences is competitive advantages. One of the key objectives
of any organization is to make and keep up competitive advantages over contenders in the
commercial place. At the point when an organization holds such favorable position over its
rivals, a conceivable result of this situation can be a general enlargement of market share. As
per Barney (1991), a resource or competence is considered a competitive advantage when it is
valuable, rare, inimitable, and non-substitutable (VRIN). In particular, first, a resource or
capacity ought to be considered valuable to clients (Barney, 1991). For instance clients will pay
for Amazon Prime because they see the value of two-day shipping policy and other benefits.
Second, the resource or competence must be rare and ought not be had, or effortlessly
controlled by rivals in the commercial place (Barney, 1991). Third, the inimitability of a resource
or capacity is essential. In particular, it is the resource or capacity that contenders can't
duplicate (Barney, 1991). Fourth, the probability that the resource or competence is substituted
ought to be sufficiently low so that contenders would not have the capacity to supplant it
(Barney, 1991).

Key resources and competences are believed to significantly affect an association's long
haul survival or competitive advantages in the market (Johnson et al., 2011). According to
Johnson et al. (2011), resources are what companies possess and competences are the ways
those resources are utilized or sent viably. In the case of Amazon, its resources include a wide
range of products, services and its human capital. Amazon’s competences include quick and
reliable in bout and out bout logistics, good customer services, technology infrastructure, and
negotiation ability of manager
 The VRIN evaluation of Amazon is presented as below. According to VRIN evaluation,
Amazon’s sustained competitive advantages include product and service diversification, human
capital, logistics, and good customer services.

Resource or Valuabl Rare Inimitable Non- Implication

competence e substitutabl
e
Product and Yes Yes Yes Low Sustained
service competitive
diversification advantage
Human capital Yes Yes Yes Low Sustained
competitive
advantage
Logistics Yes Yes Yes Low Sustained
competitive
advantage
Customer services Yes Yes Yes Low Sustained
competitive
advantage
Technology Yes No No Medium Temporary
infrastructure competitive
advantage
Negotiation ability Yes No No Medium Temporary
competitive
advantage

5. Leadership and the success of the company

Leadership assumes an indispensable part in making sustainable growth of company.

Northhouse (2013) finds that an association is affected by a pioneer's capacity to decide steps
and activities important to propel the association. Investigating the leadership of associations
can consequently, give understanding to why certain associations flourish while others don't.
Obviously, leadership is one of the key elements for the success of Amazon. In Amazon, there
are fourteen leadership principles ("About Amazon - Working at Amazon - Our Leadership
Principles", 2017). First, it is “customer obsession”. Pioneers begin with the client and work in
reverse. They work vivaciously to gain and keep client trust. In spite of the fact that pioneers
focus on contenders, they fixate on clients. Second, it is “ownership”. Pioneers are proprietors.
They think long haul and don't yield long haul esteem for fleeting outcomes. They follow up for
the benefit of the whole organization, not only of their own particular group. Third, it is “invent
and simplify”. Pioneers expect and require advancement and innovation from their groups and
dependably discover approaches to disentangle. They are remotely mindful, search for new
thoughts from all around. Fourth, it is “are right, a lot”. Pioneers are correct a lot. They have
solid business judgment and great senses. They look for differing points of view and work to
disconfirm their convictions. Fifth, it is “hire and develop the best”: Pioneers perceive
outstanding talents, and readily move them all through the association. Pioneers create
pioneers and consider important their part in guiding others. Amazon deals with benefit of its kin
to design instruments for advancement, for instance, Career Choice. Sixth, it is “insist on the
highest standards”: Pioneers have persistently elevated expectations, although many
individuals may think these principles are absurdly high. Pioneers are ceaselessly increasing
present expectations and driving their groups to convey superb items, administrations, and
procedures. Pioneers guarantee that deformities don't get sent down the line and that issues
are settled so they remain settled. Seventh, it is “think big”: Thinking little is a self-satisfying
prescience. Pioneers make and convey an intense heading that motivates comes about. They
think contrastingly and check out corners for approaches to serve clients. Eighth, it is “bias for
action”. Amazon believes that speed is very essential in doing business. Numerous choices and
activities are reversible and don't require broad review. Amazon esteems figured hazard taking.
Ninth, it is “frugality”. Amazon’s principle is to finish more with less. Limitations breed genius,
independence and creation. There are no additional focuses for developing headcount,
spending size, or settled cost. Tenth, it is “learn and be curious”. Pioneers never stop learning.
They always try to become better and always curious about new knowledge. Eleventh, it is
“earn trust”. Pioneers listen mindfully, talk genuinely, and treat others deferentially. They are
vocally self-basic, notwithstanding while doing as such is cumbersome or humiliating. Pioneers
don't trust their or their group's personal stench odors of aroma. They benchmark themselves
and their groups against the best., Twelveth, it is “dive deep”. Pioneers work at all levels, remain
associated with the points of interest, review habitually, and are doubtful when measurements
and account contrast. No undertaking is underneath them. Thirteen, it is “have backbone;
disagree and commit” . Pioneers are committed to deferentially challenge choices when they
dissent, notwithstanding while doing as such is uncomfortable or debilitating. Pioneers have
conviction and are constant. They don't trade off for social attachment. Once a choice is
resolved, they confer completely. Forteenth, it is “deliver results”. Pioneers concentrate on the
key contributions for their business and convey them with the correct quality and in an
auspicious manner. In spite of mishaps, they meet people's high expectations and never settle.

Regarding Bezos, he is a both transactional and transformational leader. According to

Northouse (2013), transactional leadership concentrates on supervision, association, and
execution; it is a style of leadership in which pioneers advance consistence by subordinators
through both prizes and disciplines. Bezos is described as a micromanager with thorough
measures, and a person who is frequently uninterested in other individuals' opinions (Stone,
2013). Therefore, he is a transactional leader. This type of leader is additionally named to be
very successful in accomplishing operational objectives and results and making organizations
that flourish, especially in the era of globalization (Ismail et la., 2010). In addition, Jeff Bezos is
also a transformational leader. According to Northouse (2013), transformational leadership is a
style of initiative where a pioneer works with subordinates to distinguish required change,
making a vision to control the change through motivation, and executing the adjustment couple
with conferred individuals from a gathering. Transformational pioneers are known to make an
entrancing vision without bounds, which picks up the hearts, and brains of individuals
(Northouse, 2013). By connecting their organization's long haul objective to their kin's qualities,
transformational pioneers stir intrigue and duty to follow up on the vision, driving collaboration
past standard conceivable outcomes (Northouse, 2013). Jeff Bezos, without a doubt, is a
transformational leader. This can be seen from the development of Amazon.com, which is
seemingly a consequence of his capacity to imagine, move, and improve.

6. Alliance

One form of strategic alliance is called coopetition. Coopetition is the term made by the
combination of the word “collaboration” and “completion”. Coopetition is a strategy for
competing companies to cooperate and to gain competitive advantages (Czakon et al., 2014).
Amazon has done a good job in having coopetition with Apple. In the late of 2007, Amazon
propelled its tablet, Kindle, for clients to peruse eBooks on Amazon.com in the format called
"AZW". After two years, Kindle 2 was acquainted with the market. An imperative contender of
Amazon's Kindle is Apple's Ipad, which was acquainted with the market in 2010, as a tablet for
peruses to peruse eBooks on IBooks application in the format called "E-PUB". Mac is an
American innovation organization that offers PC programming, equipment, and online
administrations, and so on. Established by Steve Jobs in 1976, Apple these days is known as
the world's biggest organization in the data innovation area. Clearly, Apple's Ipad outperformed
Amazon's Kindle as far as plan and capacities; in the meantime, E-Pub organization was more
famous than AZW design for eBooks. Not long after the dispatch of iPad, Amazon and Apple
started a coopetitive relationship where Apple was scattering Amazon's eBooks through the
Kindle Application on iPad (Ritala et al., 2011). Going before this, the Kindle application was
made open by Amazon.com on Apple's iPod touch an iPhone, where Apple iBooks was by then
available. This appears to bring up many issues as whether the Kindle application on IPad
would bring down the interest for Kindle gadget, and whether Apple's offers of its eBooks would
be decreased.

Truth be told, by making Kindle tablet adaptation open on the iPad, Apple will have the
ability to attract more iPad buyers. The additional advantage Apple produces from
arrangements on IPad's business more than compensates for the diminished computerized
book bargains through iBooks. Meanwhile, Amazon will have the ability to offer more eBooks,
and the additional advantage Amazon produces from computerized book arrangements is more
important than the hardship in diminished Kindle tablet's business (Ritala et al., 2011).
Additionally, benefitting from its coopetitive association with Apple, Amazon made sense of how
to extend the offers of the books in AZW configuration and make the AZW design as one of the
standard organizations in the eBooks segment (Ritala et al., 2011). The coopetition additionally
makes Apple focus fundamentally more on device arrangements and Amazon more on book
bargains for their advantages.

7. External factors

4 Success Lessons From Amazon's Jeff Bezos. (2017). Inc.com. Retrieved 11 January 2017,
from http://www.inc.com/marla-tabaka/4-success-lessons-from-jeff-bezos.html

7 Reasons Why Amazon Is So Successful. (2017). Snap Agency. Retrieved 11 January 2017,
from https://www.snapagency.com/blog/7-reasons-why-amazon-is-so-successful

About Amazon - Working at Amazon - Our Leadership Principles. (2017). Amazon.com.

Retrieved 12 January 2017, from https://www.amazon.com/p/feature/p34qgjcv93n37yd

Amazon.com(2017). 2015 annual report. Retrieved from

http://www.annualreports.com/HostedData/AnnualReports/PDF/NASDAQ_AMZN_2015.pdf
Barney, J. (1991). Firm Resources and Sustained Competitive Advantage. Journal of
Management, 17(1), pp.99-120.

Czakon, W., Mucha-Kus, K. And Rogalski, M. (2014). Coopetition research landscape - a

systematic literature review 1997-2010. Journal of Economics & Management, 17(1), pp. 121-
150.

Ellis, M. (2017). These Amazon Statistics Will Make Your Head Spin. ReadyCloud. Retrieved 11
January 2017, from https://www.readycloud.com/info/these-amazon-statistics-will-make-your-
head-spin

Fox, Z. (2017). 92% of Smartphone Owners Use a Google App. Mashable. Retrieved 11
January 2017, from http://mashable.com/2013/10/08/smartphone-users-
google/#rdGJHRADasq5

Ismail, A., Mohamad, M. H., Mohamed, H. A-B., Rafiuddin, N. M., and Zhen, K. W. P. (2010).
Transformational and transactional leadership styles as a predictor of individual
outcomes. Theoretical & Applied Economics, 17(6), 89–104. Retrieved from
http://web.a.ebscohost.com.ezp.waldenulibrary.org/ehost/pdfviewer/pdfviewer?sid=eb95e4b6-
f676-4582-9944-4471e5450de8%40sessionmgr4003&vid=1&hid=4112

Johnson, G., Whittington, R. and Scholes, K. (2011) Exploring Strategy. 9th ed. Prentice Hall

Northouse, P. G. (2013). Leadership: Theory and practice (6th ed.). Thousand Oaks, CA: Sage
Publications 

Porter, M. (1985). Competitive advantage (1st ed.). New York: Free Press.

Ritala, P., Golnam, A. And Wegmann, A. (2011). Coopetition in the global book industry: the
case of Amazon. com’s evolution. In 21st Nordic Workshop on Interorganizational Research,
Vaasa, Finland (August 15-17, 2011).

Shaw, B. (2017). 4 Basic Reasons for Amazon.com's Ongoing Success -- The Motley Fool. The
Motley Fool. Retrieved 11 January 2017, from http://www.fool.com/investing/high-
growth/2014/01/26/4-basic-reasons-behind-amazoncoms-ongoing-success.aspx

Statista, S. (2017). Topic: Amazon. www.statista.com. Retrieved 11 January 2017, from

https://www.statista.com/topics/846/amazon/
Stone, B. (2013). The Everything Store: Jeff Bezos and the age of Amazon. London: Transworld
Publishers