Amazon Company
Introduction
Since the year 2016, Amazon company has dominated and disrupted in three industries. In fact, assuming that Amazon was to liquidate, then web hosting, retail as well as book publishing would remain the same since the corporation has much influence in the industries. Presumably, competing against the company, then the competitor will need a blue ocean approach. Amazon indicates to be far the leading company in the space of E-commerce. The growth of Amazon is at a pace that is exceptional; thus, the capabilities, services, and products continually expand with raised value. Basically, the company presses its advantage to make it hard for competitors in the market. Notably, if a player maintains in the E-commerce space, then the player has it that the biggest shark is Amazon. Amazon has intended to remain in fast second class as it is more rewarding financially hence, waits for designs that are dominant to emerge before being part of them. This paper focuses on how Amazon has rested in a blue ocean, the impacts for such a space as well as future speculations.
Seizing Opportunity
In the E-commerce space, there exist different elements that are competitive aspects in the red ocean. For instance, there is a process for check out and online fast ordering both of which must appear to be less complex. Besides, the delivery must be fast allowing a hassle-free return. Surprisingly, such factors need to be in place despite, they do not guarantee differentiation in competition. Hence, they are jut realities in the red ocean. Luckily, Amazon discovered that such features in E-commerce are possessed by the majority of players. Hence, they all end up remain red ocean space. As a result the company aimed at creating its own space (the blue ocean space). However, the company does not own the entire strategies and ideas in E-commerce. In fact, new companies emerge each day with unique services and approaches. However, Amazon has just the perfect unrecovered mechanism to stay the course in the market.
Amazon ensured that to be in the blue sky, the products must be unique in that the customers will find them in no other place. Also, products, capabilities, and services need to be different too. Asa result, Amazon introduced different functionality and online leveraging while fashions in the company comprised of store footprints. Besides, Amazon employed supply chain disintermediation in which capability in systems was creatively formed. That is, through IoT (Internet of Things) leveraging. However, seizing the opportunity in the market was not possible without identifying time as an enemy. Hence, Amazon utilized time as a resource. Assuming the latter was not achieved, then competitors would have invaded the space; thus, reducing it to the red ocean. The idea was to compete with each other not against each other. Hence the latter (competition against each other) would always be predictable if it was done in a similar ecosystem. Amazon discovered that it continued to often fight with a single enemy, then the company would expose its entire art of war. Sadly, such moves are experienced in the red ocean space, ne which Amazon could not adhere to.
Flywheel Approach/Theory
Jim Collins’s concept flywheel is an implementation analogy in business. The concept indicates that driving a newly developed strategy is similar to achieving a big flywheel into motion. Of course, imagining that a flywheel is at speed would not be possible. In the initial stages, most people would believe that the theory is absurd in the business as no movement can be witnessed. However, after the exertion of will, a company is in a position to deliver adorable results that hopefully keeps the flywheel moving. However, these will initially appear trivial and small, but credibility is built in which they move to results that are more ambitious. With the accumulation of results in many more ways, then an increased number of people might want to put additional force to the wheel. As a result, the flywheel gains more momentum that makes it keep on moving. Amazon adopted the concept of the flywheel as it uses a brilliant idea of a dynamic strategy that in the same direction has aligned thousands of trivial results.
Amazon has deployed the concept to great success. Initially, the realization was that the strategy would minimize prices; thus, enabling to achieve customer experience in better ways. Besides, the latter would trigger more forces that would lead to the achievement of lower costs. Notably, the lower costs would result in low prices of products and services. Hence, the recurring process would latter lead to maintaining a virtuous cycle. With affection to drivers in either of the factors, the company would be guaranteed a flywheel continued acceleration. In every service offered, set products as well as provided capability, Amazon applies the strategy to add the flywheel’s velocity. As a result, the company constantly gets faster, stronger, bigger, and continually differentiate its created value. All of the implications of the strategy in Amazon makes it hard to compete against the company in a similar space (blue ocean). Even if its competitors manage to enter Amazon’s space, the competitor will require to extremely work hard. The latter is because Amazon has gained more experience in its domain will be will to bypass any competitor.
Evidence on Amazon’s Innovation
Customer focus allows Amazon to be more pioneered: Hence according to Jeff Bezos the Chief Executive Officer in the company, one has to remain focused on competitors. The latter indicates that one will wait until the competitor does something; thus, through this, you learn their moves. Major aspects are evident in the company that describes its stand on the blue ocean space. Among the achievements is a deep focus on customers. The designing of new products and strategizing the business suit the customers. Reflecting on Amazon Echo, Jeff challenges the designing coalition to concentrate more on the response time for the Echo. As a result, the response time lightens fast to nearly one second. In fact, this indicates times three quickness compared to the stand of the industry. Therefore, the latency of 1.5 seconds of Amazon Echo product has placed the company in significant front of competitors. Notably, the latter led to Amazon’s pre-order sales amounting to more than one million units.
On the other hand, Amazon has had a focus n the long-run. In fact, the company rarely pays its shareholders dividends. Instead, Amazon has decided to be reinvesting back its profits into new bold bets and existing products. Besides, Amazon has constantly applied foresight when it comes to long-run opportunity strategies. For instance, the company began with its founding before placing its larger odds on the web. Although the company has been investing in new opportunities and markets, its customers are never shortchanged regarding the earlier existence of opportunities. The latter proves that the company has managed to sustain a customer’s satisfaction base, something is almost impossible in red ocean space. Despite, the desire to keep the flywheel spinning has much more advantage in the company. Hence, this is evident that Amazon is determined to remain unstoppable in the industry.
Innovation Strategy Implication on Growth
Amazon is currently worth more than three hundred and eighty billion dollars. The most revealing number to all this is the company’s five thousand and twenty-two thousand in each employee. Besides, Amazon has been the leading company in the market share of cloud hosting in which more than a quarter in the market is owned by Amazon. Also, the company is the innovation undisputed king due to its unrivaled breadth. All this data sale expansion by the company due to the application of blue ocean strategy. However, the company has been able to embrace risk, as the CEO discovered that firms that fail to embrace failure often end up in positions of desperation in their existence as far as the corporate world is concerned. Hence, due to the ability to embrace failure, Amazon secures space to make successful innovations.
The company has tried to maintain the tiny sizes of the team by applying the rule of two pizza. Hence, if the coalition is not fed by the two pizzas, it proves to be big than enough. Besides, enlightening the teams on profit and loss, they will be motivated to acquire resources and ownership which ensures decisive and quick moves. Generally, Amazon has gained the willingness of being misunderstood in its innovation. As a result, the company fathoms it has a plan to follow and stick to; thus, Amazon rebuilds from misunderstandings and criticism.
Part Two