Amazon Business Strategy and Culture

Amazon is a big name in the e-commerce and retailing industry. People can buy anything they want on Amazon. A successful business must have a clear business strategy to attract customers and to achieve company goals. Amazon is putting the customer at the center of the universe, investing, and focused on long-term thinking.

 “We see our customers as invited guests to a party, and we are the hosts. It’s our job every day to make every important aspect of the customer experience a little bit better.” Jeff Bezos said¹. Also, from Amazon’s mission that to be Earth’s most customer-centric company, it is easy to tell that Amazon is a customer-centric business. A large majority of customers (89%) are more likely to buy products from Amazon than other e-commerce sites².  One of the reasons is Amazon offers the most extensive selection of products, which allows customers to get everything within Amazon. Another reason is Amazon makes it so convenient for customers to shop at Amazon with a”1-Click” button for ordering. In the situation that the customer does not how to describe the product, Amazon will provide the best possible results. Additionally, Amazon offers millions of products to meet customers’ needs at a lower price. Amazon is also focusing on customer retention. Amazon Prime is an excellent example. Amazon offers faster shipping, exclusive discounts, Prime video and Prime Music for Amazon Prime members. As of December 2019, there were 124 million U.S. Amazon Prime users³. “Once you become a Prime member, your human nature takes over. You want to leverage your $79 as much as possible,” former VP of Amazon Prime Robbie Schweitzer says.

Besides the customer-centric strategy, Amazon uses acquisitions marketing strategy to grow, extent its products and services, and bring in new customers. Amazon bought Whole Foods in order to convert customer’s grocery habits from the physical grocery store to online. Most importantly, the long term approach allows Amazon to be more proactive in its growth. In 1997, the year Amazon.com went public, its chief executive, Jeff Bezos, issued a manifesto: “It’s all about the long term,” he said³. A good example is Amazon Web Services. Amazon Web Services was launched in 2006 and started to generate the net revenue of Amazon since 2016. In 2019, AWS brought in 9.2 billion in operating income, which is accounted for 63% of the company’s operating income⁵.

The culture of Amazon plays a vital role in its success. “Our Leadership Principles empower us to be owners and innovators while maintaining our customer-centricity. We’re willing to take risks – innovating requires failing.” is the culture of Amazon.  Amazon embraces innovation and support innovation in every office and at every level of the company. The first of Amazon’s 14 leadership principles is customer obsession that starts with the customer and works backwards.  Amazon knows what customers want, or even before customers want. Moreover, Amazon tries to stay a step ahead of looking at what do customers want and how they are changing.

Is culture or business strategy more critical to any organization? Please leave your comments below. 

Reference:

¹Wilson,M. (2018, March 5). The Journey to Creating Amazing Customer Experiences. Digital Business. Retrieved from https://digitalbusinessblog.wordpress.com/2018/03/05/we-see-our-customers-as-invited-guests-to-a-party-and-we-are-the-hosts-its-our-job-every-day-to-make-every-important-aspect-of-the-customer-experience-a-little-bit-better/

² Masters,K. (2019, March 20). 89% Of Consumers Are More Likely To Buy Products From Amazon Than Other E-Commerce Sites: Study. Forbes. Retrieved from https://www.forbes.com/sites/kirimasters/2019/03/20/study-89-of-consumers-are-more-likely-to-buy-products-from-amazon-than-other-e-commerce-sites/#3af0b29e4af1

³ Clement, J. (2020, March 9). Number of U.S. Amazon Prime users 2018-2022. Statista. Retrieved from https://www-statista-com.library.sheridanc.on.ca/statistics/504687/number-of-amazon-prime-subscription-households-usa/

⁴Stewart,J. (2011, December 16). Amazon Says Long Term And Means It. The New York Times. Retrieved from https://www.nytimes.com/2011/12/17/business/at-amazon-jeff-bezos-talks-long-term-and-means-it.html

⁵2019 Annual Report. Amazon. Retrieved from https://s2.q4cdn.com/299287126/files/doc_financials/2020/ar/2019-Annual-Report.pdf

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