Running Head: Amazon: The Innovative Giant 1 AMAZON COMPANY 6 Amazon Company The managerial strategies employed in Amazon are mainly founded on leveraging high-tech competences for the company achievements and following a cost effective administrative plan. It aims at providing high quality services to the company's clients at low prices besides wrapping the business around clients wherein they find the company to be ideal for their online shopping. The strategy is an excellent achievement for the company in that it has expanded its market which has made it grow to become the most significant international online retailer. However, through applying the law of diminishing returns, it is difficult to sustain developmental plans as well as increase the company’s profits when the prices vary. The difficulty is accrued to applying the law of diminishing returns (Brienen.et.al, 2015). To pursue the cost leadership strategy, Amazon includes steep discounts for its constant customers, primarily through the Amazon Prime Program. This ensures punctual and fast delivery of products to its clients, waives off the shipping costs, extending the off-tax benefits to the clients, which further reduces the costs. The strategy creates a seamless and smooth experience for the company's clients (Amazon, 2015). Besides the cost leadership strategy is that Amazon gets motivated by its cradles of competition. In this case, the establishment focuses on technological advancements in their bid to actualize its economies scale profits, leveraging its competencies from the internal resources and external drivers which have been the basis of its growth. Also, the company employs large amounts of data in analyzing the client mannerisms. By understanding the needs of clients, Amazon offers a variety of products for its clients to choose from based on their preferences and purchasing power. Through this, the company has had a sense of intuition for their clients' needs and therefore perform in accordance to them. The company also builds its strategy around the aspect of convenience. Here, the clients are not compelled to go to a store or wait for their shopping for long. Instead, Amazon introduced the delivery of products on the same day of a client order. It also focuses on non-retail product lines such as cloud-based services, which enables it to address the issue of differentiation and cost overdependence. Potential strengths of Amazon. The company owns a strong brand in the online market, which is essential in enhancing the drastic development of the establishment in its initial times. It is attributed to more than 100M mark as far as prime international participation is concerned. The company has a large global population of clients, different product lines which keeps developing with time (Chanda, 2016). Also, it has an expansive mixture of products which is essential in offering customers a range of products to choose from the company's website. This aspect has .

1. Running Head: Amazon: The Innovative Giant 1
AMAZON COMPANY 6
Amazon Company
The managerial strategies employed in Amazon are mainly
founded on leveraging high-tech competences for the company
achievements and following a cost effective administrative plan.
It aims at providing high quality services to the company's
clients at low prices besides wrapping the business around
clients wherein they find the company to be ideal for their
online shopping. The strategy is an excellent achievement for
the company in that it has expanded its market which has made
it grow to become the most significant international online
retailer. However, through applying the law of diminishing
returns, it is difficult to sustain developmental plans as well as
increase the company’s profits when the prices vary. The
difficulty is accrued to applying the law of diminishing returns
(Brienen.et.al, 2015).
To pursue the cost leadership strategy, Amazon includes steep
discounts for its constant customers, primarily through the
Amazon Prime Program. This ensures punctual and fast delivery
of products to its clients, waives off the shipping costs,
extending the off-tax benefits to the clients, which further
reduces the costs. The strategy creates a seamless and smooth
experience for the company's clients (Amazon, 2015).
Besides the cost leadership strategy is that Amazon gets
motivated by its cradles of competition. In this case, the
establishment focuses on technological advancements in their
bid to actualize its economies scale profits, leveraging its
competencies from the internal resources and external drivers
which have been the basis of its growth. Also, the company
employs large amounts of data in analyzing the client
mannerisms.

2. By understanding the needs of clients, Amazon offers a variety
of products for its clients to choose from based on their
preferences and purchasing power. Through this, the company
has had a sense of intuition for their clients' needs and therefore
perform in accordance to them.
The company also builds its strategy around the aspect of
convenience. Here, the clients are not compelled to go to a store
or wait for their shopping for long. Instead, Amazon introduced
the delivery of products on the same day of a client order. It
also focuses on non-retail product lines such as cloud-based
services, which enables it to address the issue of differentiation
and cost overdependence.
Potential strengths of Amazon.
The company owns a strong brand in the online market, which is
essential in enhancing the drastic development of the
establishment in its initial times. It is attributed to more than
100M mark as far as prime international participation is
concerned. The company has a large global population of
clients, different product lines which keeps developing with
time (Chanda, 2016).
Also, it has an expansive mixture of products which is essential
in offering customers a range of products to choose from the
company's website. This aspect has created a strong client
foundation for the company by making it attractive and hence
easier in focusing on its vision and mission. A sound reason for
significant client loyalty is the clients’ experience as far as the
company's services are concerned and also the incorporation of
high levels of technology (Kantor & Streitfeld, 2015).
Amazon is also among the highest revenue establishments in the
market. Even though the company has weak operating margins,
it makes large sales which earn it high levels of income. The
strength has enabled the company to venture in different
businesses or even invest in the development of new products.
All of these strengths are important in helping the company
maintain its position.
Potential weaknesses of Amazon.

3. The company’s model is easily imitable. In this case, any other
establishment could set up an online shopping portal that sells
any products. Having such kind of a business model makes it
vulnerable to unhealthy competition. Different companies could
easily create more prominent websites as Amazon through
benchmarking their business model (Diehl & Bishop, 2017).
Another weakness is that the business is limited as far as
penetration in developing markets is concerned. Amazon mainly
accrues its revenue from developed nations. While other
companies found themselves in developing countries with
potential markets, it makes it difficult for Amazon to penetrate
and compete with such companies. For this reason, the company
has continually had weak operating margins as compared to
other online platforms such as Facebook. For instance, Amazon
had a small rise in their operating margins in 2016 and 2017,
that is, 3% and 3.5% respectively and then 3.8% in 2018. On the
other hand, Facebook had a 45% rise. The difference clearly
shows the low rate of growth of Amazon operating margins
(Burt, 2016).
The company also has a limited brick-and-mortar presence. It is
attributed to some product failures. Recently. The company has
come up with some products which did not perform as expected
since the products could not earn as many sales as the company
anticipated. For this reason, the company gets a limited ability
to appeal to clients about different types of products that could
get easily sold in any other stores. All the weakness calls for
the company to maintain both offline and online
competitiveness to overcome the shortcomings.
References
Amazon, E. C. (2015). Amazon web services. Available in:
http://aws. amazon. com/es/ec2/(November 2012).
Brienen, R. J., Phillips, O. L., Feldpausch, T. R., Gloor, E.,
Baker, T. R., Lloyd, J., ... & Martinez, R. V. (2015). Long-term
decline of the Amazon carbon sink. Nature, 519(7543), 344.
Burt, I. (2016). An understanding of the differences between

4. internal and external auditors in obtaining information about
internal control weaknesses. Journal of Management Accounting
Research, 28(3), 83-99.
Chanda, K. (2016). Password security: an analysis of password
strengths and vulnerabilities. International Journal of Computer
Network and Information Security, 8(7), 23.
Diehl, K., & Bishop, B. (2017). Strategic Analysis of Amazon
Madison Morgan November 16, 2017 MGMT 275.
Kantor, J., & Streitfeld, D. (2015). Inside Amazon: Wrestling
big ideas in a bruising workplace. New York Times, 15, 74-80.