International business strategy of amazon

This report examines the strategy adopted by Amazon in expanding internationally, providing important insights into the current nature and future direction of this global ecommerce and technology giant in the online retailing industry. The objective is to analyze the key elements of Amazons international expansion and identify the strategy it has implemented to establish a strong global presence. The report explores the companys entry into international markets, its global strategy, analyzes the effectiveness of the strategy implementation and thus identifies achievements and failures of that business strategy. Additionally, the report delves into Amazons application of international business strategy in several countries to visualize the differences related to national aspects. By evaluating Amazons international business strategy, this report provides valuable insights into the companys successful global expansion and its position as a leader in the ecommerce industry. Overall, Amazons international business strategy is centered around aggressive expansion into new markets, leveraging its core competencies in ecommerce, technology, and logistics. The companys approach combines strategic market entry, localization efforts, and a customercentric focus to establish a strong global presence.

FOREIGN TRADE UNIVERSITY SCHOOL OF ECONOMICS AND INTERNATIONAL

BUSINESS

-MIDTERM ASSIGNMENT

Subject: International Business

Topic: International Business Strategy of

Amazon

Group

- KDOE307 Lecturer: PhD Nguyen Hong Hanh

Hanoi, June 2023

TABLE OF CONTENTS

ABSTRACT 3

CHAPTER 1: COMPANY OVERVIEW 4

1 Company profile 4

2 Vision and Mission 4

3 Core value 4

4 Products and Services 5

5 Internalization path 5

CHAPTER 2: AMAZON AND GLOBAL STRATEGY ANALYSIS 7

1 Identify Amazon’s Strategy through Value Chain analysis 7

1.1 Primary Activities in Amazon Value Chain analysis 7

1.2 Support Activities in Amazon Value Chain analysis 10

1.3 A Global Strategy of Amazon 14

2 Appropriateness of the strategy 15

2.1 Internal factors (VRIO) 15

2.2 External factors (Porter’s 5 Forces) 18

2.3 Achievements and Failures 20

CHAPTER 3: CASE STUDIES OF AMAZON'S INTERNATIONAL BUSINESS STRATEGY IMPLEMENTATION 22

1 Amazon's Strategy Implementation in India 22

2 Amazon's Strategy Implementation in China 23

CONCLUSION 25

REFERENCES 26

ABSTRACT

This report examines the strategy adopted by Amazon in expanding internationally, providing important insights into the current nature and future direction of this global e-commerce and technology giant in the online retailing industry The objective is to analyze the key elements of Amazon's international expansion and identify the strategy it has implemented to establish a strong global presence The report explores the company's entry into international markets, its global strategy, analyzes the effectiveness of the strategy implementation and thus identifies achievements and failures of that business strategy Additionally, the report delves into Amazon's application of international business strategy in several countries to visualize the differences related to national aspects By evaluating Amazon's international business strategy, this report provides valuable insights into the company's successful global expansion and its position as a leader in the e- commerce industry Overall, Amazon's international business strategy is centered around aggressive expansion into new markets, leveraging its core competencies in e-commerce, technology, and logistics The company's approach combines strategic market entry, localization efforts, and a customer-centric focus to establish a strong global presence.

CHAPTER 1: COMPANY OVERVIEW

1 Company profile

Amazon is a multinational technology company founded by Jeff Bezos in 1994 Initiallyestablished as an online bookstore, it rapidly expanded its offerings to become a leading e-commerce platform worldwide Amazon boasts an extensive product catalog, encompassingbooks, electronics, clothing, household goods, and more Beyond retail, Amazon hassuccessfully diversified its operations through services such as Amazon Prime, which grantscustomers expedited shipping and access to streaming content Renowned for its customer-centric approach, innovative technologies, and unwavering commitment to convenience andvalue, Amazon has become synonymous with exceptional shopping experiences The iconic

"smile" A to Z logo embodies Amazon's dedication to providing an all-encompassing range ofproducts and services, reflecting their mission to serve as a comprehensive platform forcustomers from A to Z

2 Vision and Mission

Amazon’s vision and mission statement on the official website, “to be Earth’s mostcustomer-centric company,” is a commitment to providing attractive e-commerce services to itscustomers and emphasizes the importance of customer satisfaction This drives Amazon’s focus

on four major factors: the lowest prices, the best selection of goods and services, convenience ine-commerce, and global industry leadership:

Lowest Prices: Amazon aims to offer competitive prices by leveraging scale, efficiency,

automation, and technology to minimize operating costs and provide value to customers Theyregularly run promotions like Prime Day and employ dynamic pricing strategies to maintainlower prices compared to competitors

Best Selection of Goods and Services: Amazon provides a wide range of products from

various vendors, including physical and digital items, streaming content, and services Theystrive to offer a comprehensive selection that caters to diverse customer needs, making itconvenient to find everything in one place Subscription-based options also expand customerchoices and convenience

Convenience in E-commerce: Amazon prioritizes customer convenience by simplifying

the shopping experience Features like one-click ordering and saved payment methods streamlinethe purchase process They provide product reviews, recommendations, and detailed information

to assist customers in decision-making Convenience is a key factor in building customer loyalty

Global Industry Leadership: Amazon aspires to be a global leader in customer

satisfaction and extends its reach into international markets Through investments in R&D,innovative solutions, strategic acquisitions, and partnerships, Amazon aims to develop productsand services provided for customers worldwide They prioritize customer service and expandtheir logistics infrastructure to ensure efficient delivery globally

Customer Obsession: Amazon prioritizes the needs and satisfaction of its customers

above all else Instead of focusing solely on competitors, Amazon directs its efforts towardunderstanding

and exceeding customer expectations, providing excellent service, and delivering products andexperiences that delight and engage customers.

Passion for Invention: Amazon fosters a culture of innovation and embraces a passion for

invention The company encourages its employees to think creatively, challenge the status quo,and continuously seek out new and better ways to serve customers Amazon values the power oforiginal ideas and invests in research and development to drive innovation across its wide range

of products and services

Commitment to Operational Excellence: Amazon places great importance on operational

excellence and efficiency The company strives to optimize its processes, systems, andinfrastructure to deliver superior customer experiences From logistics and supply chainmanagement to customer service and fulfillment, Amazon is committed to continuouslyimproving its operations to provide reliable, fast, and seamless services

Long-Term Thinking: Amazon embraces a long-term perspective in its decision-making

and strategy Rather than focusing on short-term gains, the company takes a patient and strategicapproach, investing in areas that may take time to yield results This long-term thinking enablesAmazon to make bold and innovative bets that can reshape industries and deliver sustainablegrowth over time

4 Products and Services

Amazon states that they offer a wide range of products and services across variousindustries but they can be categorized into five main areas:

Amazon Store: Amazon is primarily known for its online retail platform, where customers

can purchase a vast selection of products This includes categories such as electronics, books,clothing, home goods, beauty products, and much more One way Amazon guarantees a wideselection of products is through the 1.7 million small and medium businesses around the worldselling on Amazon.com and offering more options for customers

Devices and Services: From Alexa and Echo, Fire TV, Fire Tablets, and more, customers

are using devices and services to make their daily lives easier and more enjoyable

Amazon Web Services: AWS is the world’s most comprehensive and broadly adopted

cloud, offering over 200 fully featured services from data centers globally

Delivery and Logistics: Amazon Logistics is a well-known shipping & delivery service,

which complements existing providers such as USPS, FedEx, and UPS In simple words,Amazon Logistics is more of a “last mile” shipping & delivery service, which gets packagesdelivered to their customers

Entertainment: Amazon creates and provides access to world-class entertainment through

Amazon Originals, Prime Video, Audible, Twitch, Amazon Music, and more for customers toenjoy

5 Internalization path

According to an article on Office Timeline summarizing the evolution and growth of Amazon over time, Amazon's journey of international expansion has a rich history that began with its roots as an online bookstore:

 July 5, 1994: Amazon Founded

After a cross-country move from New York City to Seattle, Washington, Jeff Bezosopened Amazon.com on July 5, 1994, in the garage of a rented house Originally calledCadabra.com (as in "abracadabra"), Amazon is only the second online bookstore, born of Bezos'brilliant idea to capitalize on the Internet's 2,300% annual growth.

 December 1998: Entry into the United Kingdom and Germany

After establishing a strong presence in the United States, Amazon expanded its reach tothe United Kingdom in 1998 by acquiring Bookpages.co.uk The following year, it entered theGerman market by acquiring Telebook

 January 2000: Amazon Unveils a New Logo

Amazon makes the official transition from "bookstore" to "everything store." Toacknowledge the company's change in focus, Amazon unveils a new logo The iconic “smile”logo, designed by Turner Duckworth, replaces the abstract rendering of the Amazon River(which inspired the company's name)

 2002: Entry into Canada and European markets

Amazon expanded into Canada in 2002, followed by entering additional Europeanmarkets like Italy, Spain, and the Netherlands during the 2000s These expansions allowedAmazon to tap into new opportunities and serve a wider customer base

 August 2004: Entry into China through Acquisition

In a pricey landmark deal, Amazon bought Chinese retail giant Joyo.com in August 2004.The $75 million investment gives the company access to a major market, and Amazon beginsselling books, music, and videos through the platform

 June 2013: Amazon launches in India

Amazon initially entered the Indian market by acquiring Junglee.com, an online shoppingcomparison website, in 1998 Junglee.com served as a precursor to Amazon's direct entry intothe Indian market However, in June 2013, Amazon officially launched its marketplace platform,Amazon.in, in India Initially, the platform offered books, movies, and TV shows

 June 2017: Amazon Acquires Whole Foods

While Amazon dominates almost all of the markets it enters, the company has longstruggled to gain a foothold in the highly competitive grocery business In 2017, Amazon boughtall of Whole Foods' 471 stores for $13.4 billion Amazon has since integrated the two companies'distribution systems, and combined discounts to loyalty members of both stores

 Until now: Amazon continued expanding its global presence

On the world scale, they now operate across 5 continents with around 20 countries havingdedicated websites for shoppers and sellers These include the United States, France, Italy, theUnited Kingdom, Turkey, India, Saudi Arabia, Japan, Singapore, Mexico, and Brazil to namesome They also have built over 150 fulfillment centers globally with a majority of them residing

in the U.S (Gourmet Ads) Although they don’t have operations in every country, they stilldeliver to over 100 countries in the rest of the world

CHAPTER 2: AMAZON AND GLOBAL STRATEGY ANALYSIS

1 Identify Amazon’s Strategy through Value Chain analysis

1.1 Primary Activities in Amazon Value Chain analysis

1.1.1 Inbound Logistics

Inbound logistics plays a critical role in the success of any organization, and for a globalgiant like Amazon, it is a key component of its value chain Amazon's ability to obtain, store, anddistribute goods and inputs efficiently is instrumental in ensuring smooth operations and meetingcustomer demands

Supplier Management: At the core of Amazon's inbound logistics is its robust supplier

management system With a vast network of vendors worldwide, Amazon focuses onestablishing cost-effective deals, ensuring prompt shipments, and maintaining successfulrelationships with suppliers By strategically managing these relationships, Amazon secures areliable supply of goods and materials necessary for its operations (EdrawMax)

Warehouse Operations: Amazon's extensive system of fulfillment and warehouse

facilities around the world plays a crucial role in its inbound logistics These facilities act as hubsfor receiving, storing, and managing incoming deliveries Warehouse operations encompassvarious tasks, including unloading shipments, controlling stock levels, ensuring qualityassurance, and optimizing storage practices Efficient management of these operations ensuresthat products are readily available for distribution, minimizing delays and improving customersatisfaction worldwide (Profit Whales Online)

Inventory Management: The company uses a centralized inventory management system

that allows it to monitor inventory levels and movements in real-time across its network ofwarehouses and fulfillment centers worldwide To maintain a streamlined supply chain, Amazonemploys advanced tools and analytics for effective inventory management Through accuratedemand forecasting, the company determines optimal stock quantities and develops restockingplans By avoiding stockouts and optimizing stock levels, Amazon reduces the risk of lost salesand minimizes the costs associated with excess inventory This strategic approach to inventorymanagement is crucial in meeting customer demands while maintaining cost efficiency in anycountry (Sell Amazon Online)

Transportation and Freight: Once goods are received at Amazon's fulfillment centers,

the challenge lies in efficiently transporting them to the appropriate shipping facilities or directly

to consumers Amazon employs a range of transportation methods in all of its different markets,including trucks, air freight, and its own delivery systems like Amazon Prime and Amazon Flex,for final-mile shipping By carefully selecting transportation options and optimizing freightstrategies, Amazon ensures timely and cost-effective delivery, further enhancing its customerexperience

Technology and Automation: Amazon leverages modern technology and automation to

streamline its inbound logistics activities Robotics, automated sorting systems, and predictivealgorithms are employed to optimize processes, increase productivity, and reduce expenses.From machinery for categorizing and selecting products to advanced stock control and shippingconsolidation strategies, technology plays a pivotal role in enhancing efficiency throughoutAmazon's inbound logistics operations (Profit Whales Online)

Data Analytics: A key factor in Amazon's success lies in its ability to harness the power

of data analytics By gathering and evaluating data on various aspects, such as vendor efficiency,transport routes, inventory levels, and consumer interest, the company can make informeddecisions to enhance productivity and reduce costs Data analytics enables Amazon to identifytrends, optimize supply chain operations, and continuously improve its inbound logisticsprocesses from country to country (EdrawMax)

By effectively managing supplier relationships, optimizing warehouse operations,implementing robust inventory management practices, utilizing efficient transportation andfreight strategies, leveraging technology and automation, and harnessing the power of dataanalytics, Amazon has built a formidable inbound logistics system that operates on a globalscale These elements collectively contribute to Amazon's ability to provide customers with aseamless experience, while driving efficiency, cost savings, and maintaining its position as aleader in the e-commerce industry

1.1.2 Operations

A value-chain evaluation offers valuable insights into how a business generates value ateach stage of its operations Examining Amazon's value chain reveals key elements that shedlight on the company's approach to creating value

Customer-centric Focus: Amazon's business plan centers around providing exceptional

interactions with customers across all regions of the world The company's commitment to thiscustomer-centric approach is evident in its emphasis on efficient order processing, dependableshipment, and attentive customer care By focusing on these aspects, Amazon aims to createremarkable experiences that build customer loyalty and satisfaction, serving as the foundation forits success (Visualise Solutions)

Operational Efficiency: Amazon leverages state-of-the-art technologies, robotics, and

data insights to drive operational efficiency across its value chain worldwide Through theapplication of cutting-edge solutions, the company streamlines operations, reduces costs, andboosts productivity This focus on operational efficiency extends to various areas such asshipping, warehouse services, fulfillment, and stock control By harnessing technology, Amazonensures its operations are optimized to meet customer demands effectively (Business StrategyInsights)

Supply Chain Management: Effective supply chain management is a critical component

of Amazon's logistics strategy The company actively collaborates with suppliers to establishstrong relationships, negotiate reasonable terms, ensure prompt delivery, and uphold highstandards of product quality Through efficient management of vendors, inventories, andshipping, Amazon maintains a reliable supply chain This commitment to seamless integrationand collaboration with suppliers enhances the overall efficiency and effectiveness of itsoperations (Visualise Solutions)

Ecosystem Development: Amazon's ecosystem development is exemplified by the

Amazon Marketplace, which enables independent sellers around the world to connect withbuyers online This platform broadens Amazon's product offering, improves consumer value, andcreates new sources of income By nurturing a thriving ecosystem, Amazon fosters competition,innovation, and choice, thereby enriching the overall customer experience The AmazonMarketplace has become a significant driver of growth, enabling the company to continuallyexpand its reach and meet evolving customer needs

By prioritizing exceptional customer experiences, leveraging advanced technologies,collaborating effectively with suppliers, and nurturing a vibrant ecosystem, Amazon hassolidified its position as a dominant force in the industry As the company continues to evolveand innovate, its commitment to generating value along the value chain remains unwavering,ensuring its continued success in meeting customer demands and shaping the e-commercelandscape.

1.1.3 Outbound Logistics

A value chain analysis of Amazon's outbound logistics strategy reveals a comprehensiveand well-executed approach to delivering goods to customers worldwide

Global Supply Chain Integration: Amazon's outbound logistics strategy involves the

seamless integration of supply chains on a global scale Through strategic agreements withinternational airlines, logistics vendors, and regional shipping facilities, the company ensuresefficient and effective order fulfillment in various locations This integration enables Amazon toexpand its reach and deliver products to customers across the globe, regardless of geographicalboundaries

Customization: While Amazon keeps the overall goals and core values of the company, it

also recognizes the diverse preferences and requirements of different markets and employs alocalization approach in its outbound logistics operations This involves adapting appropriatelogistical procedures, such as inventory management, packaging, and shipping options, to meetthe specific needs of local markets By customizing its processes, Amazon lowers trade barriersand enhances customer satisfaction by providing tailored experiences to different regions(Visualise Solutions)

Cross-Border Logistics Expertise: Operating in multiple countries presents unique

challenges, including navigating complex customs processes, import/export laws, andtransportation regulations Amazon has developed expertise in handling these obstacles, ensuringsmooth cross-border logistics operations By efficiently managing international deliveries andminimizing delays, Amazon maintains its ability to provide timely and reliable delivery services

to customers worldwide

Global Fulfillment Network: Amazon strategically establishes a global network of

fulfillment centers, strategically located to optimize storage and reduce transportation distances

By placing warehouses in different geographic areas, the company ensures that products arestored closer to customers, resulting in faster delivery times and reduced shipping costs Thisglobal fulfillment network enables Amazon to fulfill orders efficiently, enhancing the overallcustomer experience (Profit Whales Online)

Multi-Channel Distribution: In addition to its dominant online platform, Amazon

embraces a multi-channel distribution approach This includes partnering with physical stores,independent sellers, and regional resellers to expand its customer base By leveraging thisdiverse distribution network, Amazon taps into different customer demographics and caters tolocal purchasing preferences This strategy allows the company to reach a broader audience andextend its market presence worldwide

1.1.4 Marketing and Sales

Assessing Amazon's marketing and sales efforts along the value chain demonstrates anextensive worldwide strategy that includes several important components

Market research: To determine consumer demands, tastes, and patterns across multiple

countries, Amazon's marketing and sales strategy starts with in-depth market analysis The datagathered enables the business to effectively address particular consumer categories with itsmarketing and sales initiatives (Visualise Solutions)

Digital Marketing: To attract a global audience, Amazon makes use of digital marketing

channels like search engine optimization (SEO), pay-per-click advertising (PPC), onlinepromotion, and email advertising In order to make sure that marketing communications areparticularly pertinent and enticing, the organization proactively focuses clients via theirbackground, interests, and online activity

Customer Relationship Management (CRM): Establishing and upholding relationships

with customers is a top priority for Amazon's strategy The business collects client information,examines buying habits, and offers customized suggestions through its CRM systems worldwide.Amazon increases customer devotion and promotes recurring business by comprehendingconsumer tastes and providing customized experiences

Global branding and advertising: To increase brand recognition and position itself as a

reliable and renowned brand globally, Amazon makes considerable investments in globalbranding and advertising campaigns To attain a large audience and strengthen its brand image,the corporation uses a variety of advertising channels, including television, newspapers, internetplatforms, and collaborations (Business Strategy Insights)

1.1.5 Service

An examination of Amazon's services operations' value chains indicates an extensiveworldwide plan intended to provide outstanding customer service and assistance

Customer Support Centers: Around the world, Amazon runs a sizable network of

customer support facilities Customers can contact these centers via phone, email, and live chat,among other ways Amazon makes sure that consumers can quickly fix problems and get supportwhenever they need it by providing 24/7 support (Business Research Methodology)

Order Fulfillment and Delivery: To streamline the ordering, packing, and delivering

procedures, the organization uses cutting-edge logistics technology Amazon guarantees quickand dependable shipment to consumers all over the world through agreements with other deliveryfirms and its own delivery system, which includes Amazon Prime and Amazon Flex.(Investopedia)

Returns and refunds: The business streamlines the return procedure to give clients

straightforward exchanges and quick refunds This customer-centered strategy fosters long-termconsumer loyalty by improving pleasure and trust (Business Research Methodology)

Technical support and Product Support: The business offers thorough product details,

user guides, and troubleshooting manuals Amazon makes sure that customers may benefit fromtheir purchases and address any problems they may run into by providing thorough assistance(Business Research Methodology)

1.2 Support Activities in Amazon Value Chain analysis

1.2.1 Infrastructure

Infrastructure refers to the activities and resources that are necessary to support the entirevalue chain and enable the company to operate efficiently and effectively The firm’sinfrastructure

consists of organizational and management activities Amazon has invested finances, time, andefforts to build a scalable and reliable business model to provide its huge size and market share.

Firstly, it includes offline structures like fulfillment centers, delivery networks andphysical retail stores Amazon's fulfillment centers are strategically located across the world toensure timely delivery of products to customers The company also operates a globally massivetransportation and delivery network that includes its own fleet of delivery vehicles, aircraft, anddrones (Daniel Pereira, 2023) This network enables Amazon to deliver products quickly andreliably to customers in different countries and regions Amazon has also opened severalphysical stores, such as Amazon Go stores, Amazon Books stores, and Whole Foods Marketstores These stores provide customers with an opportunity to experience Amazon's products andservices in person, and also serve as distribution points for online orders

The digital solutions and online assistance are also the best available at the same time(EdrawMax Online) One key element of Amazon's online infrastructure is its website, whichserves as the primary platform for customers to browse and purchase products The websitefeatures a user-friendly interface, personalized recommendations, and a wide range of products

In addition to its website, Amazon has also developed a mobile app that allows customers tobrowse and purchase products on the go The two platforms are available in multiple languagesand currencies, which enables Amazon to reach customers in different markets Anotherimportant element of Amazon's online infrastructure is its cloud computing platform, AmazonWeb Services (AWS) According to IPSpecialist about AWS Global Infrastructure, this provides

a wide range of services and tools for businesses to build and manage their own applications andservices or enables their existing applications to be migrated to the cloud faster, easier, and morecost- effective Amazon Services can be hosted in many locations worldwide due to AWS GlobalInfrastructure

Along with its infrastructure for backend management, the business also has one foremployee and customer support (EdrawMax Online) For employee support, Amazon hasdeveloped a range of infrastructure to ensure that employees have access to the resources andtools they need to perform their jobs effectively For customer support, Amazon ensures thatcustomers receive timely and effective assistance with their inquiries and issues This is not onlyprovided by offline infrastructure stated above but also includes a variety of communicationchannels like phone, email, and chat support, as well as self-service options like FAQs Thisinfrastructure helps Amazon build customer loyalty and trust, which is essential for its globalexpansion

In addition, according to Amy Nguyen-Chyung, Elliot Faulk, the finance and planning atAmazon's are managed at corporate level while quality management, accounting and legal issuesare managed at business unit level The company's financial management infrastructure includesfinancial reporting tools, budgeting and forecasting software that help the company to manage itsfinancial resources, track its performance, and make informed strategic decisions It also includesthe payment processing systems, which enable the company to accept payments from customersand partners around the world with a wide range of payment methods In terms of qualitymanagement, Amazon focuses on product testing and inspection, and customer feedbackmechanisms to ensure that its products and services meet customer expectations For accounting,Amazon has developed an accounting system, and internal controls across different markets toensure the accuracy, transparency, and compliance of its accounting practices For legal issues,legal compliance systems and processes, such as anti-corruption policies and procedures, data

protection and privacy policies, and intellectual property protection measures have beendeveloped.

Taylor Byrne has stated that Effective infrastructure management can allow Amazon tooptimize the value of the whole value chain (2018) Amazon can control the infrastructureactivities to strengthen the competitive positioning in the market

1.2.2 Human Resource Management

Amazon’s value chain analysis cannot be completed without its HR managementdepartment Human resources involve activities a business participates in to manage its humancapital Amazon can analyze human resource management by evaluating different HR aspects,including- recruiting, selecting, training, rewarding, performance management and otherpersonnel management activities (Taylor Byrne, 2018) Amazon has its in-house employees,international employees, contractors, and temporary workforce

Amazon has developed a sophisticated recruitment process that includes a range ofsourcing strategies in order to attract and retain top talent to the company, which helps to ensurethat Amazon has the skilled and motivated workforce needed in every market to support itsoperations and growth Bahadir Kandemirli explained that in order to attract talented people,Amazon has developed a range of recruitment strategies and programs These include jobpostings, employee referrals, and social media advertising The company also uses a variety ofassessment methods to evaluate candidates, such as behavioral interviews, skills tests, andaptitude assessments

Amazon’s employee management process has been one of the primary elements of itssuccess across countries Amazon provides employees with the best training, includingclassroom training, e-learning programs, and on-the-job training (Business Strategy Insights).This helps to ensure that employees have the skills and knowledge they need to perform theirjobs effectively and advance in their careers Then, Amazon has developed a performancemanagement system of regular feedback and coaching, goal setting and performance tracking,and formal performance evaluations Last but not least, Amazon gives its human resources therecognition it deserves through its promotions and rewards, as a result, the company has gainedloyal employees and the least turnover

Amazon also utilizes independent contractors and temporary personnel to rotate itsworkforce seasonally Independent contractors, who are self-employed individuals hired byAmazon for specific projects or tasks, and temporary personnel, who are hired for a fixed period

of time to help manage increased demand However, these workers may not receive the samebenefits and job security as permanent employees, and may be subject to different workingconditions and expectations

Amazon also has a firm infrastructure supported by technology to ensure maximumcooperation between the firm and the workforce (Edrawmax) Overall, the company typicallyconsiders its employee relations to be crucial in any of their targeted markets

Therefore, Taylor Byrne stated that effective HR management can allow Amazon toreduce competitive pressure based on motivation, commitment and skills of its workforce Thecompany can also achieve its cost minimization objectives by analyzing hiring and training costswith their relative return The heavy dependence of Amazon on employees' talent will increasethe importance of this value chain support activity

1.2.3 Technology Development

In a modern, technological advanced era, almost all value chain activities depend ontechnological support Technology development involves a company’s use of technology in itsoperations The technological integration in production, distribution, marketing and humanresource activities requires Amazon to realize the importance of technology development It can

be divided into product and process technological development activities Some examples automation software, technology-supported customer service, product design research and dataanalytics The research and development department of Amazon is classified in this category(Taylor Byrne, 2018)

are-For Amazon, its technological innovations have been one of the differentiating factorsbetween the company and its competition The primary source of technological development isits core business of online retail stores and the related infrastructure (Business Strategy Insights)

In terms of e-commerce, Amazon has developed a sophisticated online platform worldwide thatallows customers from different markets to browse and purchase a wide range of productsquickly and easily, voice shopping with Alexa AI and Echo devices, and augmented reality tosee how products fit as well as test how they look (Bahadir Kandemirli) The company has alsoinvested in logistics infrastructure and technologies to support efficient and timely delivery ofproducts for every customer, including automated warehouses, delivery drones, and distributioncenters with robotics technology

Other than these, a range of analytics tools has been developed to help the company tomonitor and improve its operations This includes data analytics and visualization tools thatprovide insights into customer behavior and preferences, as well as supply chain managementtools that help the company to optimize its operations and reduce costs Moreover, the companyalso works in the artificial intelligence and digital market to support its operations and improvethe customer experience This includes recommendation systems that suggest products tocustomers based on their browsing and purchasing history, as well as chatbots and otherautomated customer service tools that can quickly and efficiently resolve customer issues

Similarly, the company has also utilized technology to expand into other markets, forexample, digital streaming services through Amazon Prime Video for customers in differentmarkets to access Likewise, the company has expanded its business into cloud computingthrough its AWS services globally AWS provides scalable and flexible cloud computingservices that support a range of business needs, from data storage and processing to applicationdevelopment and deployment The processes of the company to originally deal with itsoperations worked so well that they have become industry standards (Edrawmax)

Overall, Amazon has used technology throughout its business and has developed acompetitive advantage through it

1.2.4 Procurement

The procurement in the value chain denotes the processes involved in purchasing theinputs that may range from equipment, machinery, raw material, supplies, raw material and otheritems necessary for producing the finished product (Taylor Byrne, 2018) Effective procurement

is essential to ensuring that Amazon has access to the goods and services it needs to meetcustomer demand

The process behind Amazon’s procurement is known as Sales and Operations (S&OP).Through this process, the company forecasts the sales for each product in its distribution centerinventory Similarly, the company keeps track of its inventory position in real-time based onwarehouse receipts and shipments.

Once the inventory levels for a product reach a specific amount, the company places apurchase order with suppliers The company uses its forecasted sales to determine when itsinventory will run out and orders new stock beforehand Through this, the company ensures itsinventory doesn’t run out Overall, this has enabled Amazon to offer a wide range of productsand services to customers in different markets, maintain its competitive advantage in the globale- commerce market, and achieve sustainable growth over the years (Business Strategy Insights)

1.3 A Global Strategy of Amazon

Based on the analysis of Amazon's value chain, it is clear that the company has investedheavily in inbound logistics, operations, outbound logistics, marketing and sales, and service tosupport its global operations Additionally, Amazon has invested in infrastructure, humanresource management, technology development, and procurement to support its operationsworldwide, further advancing its global strategy

By effectively managing supplier relationships, optimizing warehouse operations,implementing robust inventory management practices, utilizing efficient transportation andfreight strategies, leveraging technology and automation, and harnessing the power of dataanalytics, Amazon has built a formidable value chain that operates on a global scale Of thesupporting activities, the company has developed a sophisticated online platform, logisticsinfrastructure, and cloud computing services, among others, to support its operations worldwide

It has also invested in training and rewarding its employees while utilizing technology tostreamline its operations The company's procurement process is also efficient and effective inensuring that it has access to the goods and services it needs to meet customer demand Theseelements collectively contribute to Amazon's ability to provide customers with a seamlessexperience, while driving efficiency, cost savings, and maintaining its position as a leader in thee-commerce industry

All these aspects of Amazon's value chain support the conclusion that the company willchoose a global strategy, which means that the company will continue to expand its operations indifferent markets worldwide while maintaining a standardized approach to its businessoperations This approach will enable Amazon to leverage its economies of scale, reduce itscosts, and maintain consistency in its products and services across different markets Thecompany's global strategy will also enable it to capitalize on its brand recognition, technologicalinnovations, and supply chain capabilities to sustain its competitive advantage in the global e-commerce market