Summer Internship - II

STRATEGIC COMPARISON BETWEEN

FLIPKART AND AMAZON

Submitted in partial fulfillment of the requirements for the degree of

Bachelor of Business Administration

by
MUHAMMAD YASIR K
19BBA0041

Under the guidance of

Dr. RAJESH M
Associate Professor
VIT Business School
VIT Vellore.

August, 2021

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 DECLARATION

I hereby declare that the project report entitled STRATEGIC COMPARISON

BETWEEN FLIPKART AND AMAZON submitted by me, for the award of the

degree of Bachelor of Business Administration to VIT is a record of bonafide

work carried out by me under the supervision of Dr Rajesh M.

I further declare that the work reported in this thesis has not been submitted and

will not be submitted, either in part or in full, for the award of any other degree or

diploma in this institute or any other institute or university.

Place: Chennai

Date: 10/08/2021

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 ACKNOWLEDGEMENT

It gives me immense pleasure in bringing out this project report of project entitled
“STRATEGIC COMPARISON BETWEEN FLIPKART AND AMAZON”

Firstly, I would like to thank my teacher and guide Associate Professor Dr Rajesh
M, who gave his valuable suggestions and ideas when I was in need of them. He
encouraged us to work on this project.

I am also grateful to our college for giving us the company to work with them and
providing us the necessary resources for the project.

I would also thank all of them who helped me to complete this project. I am
immensely grateful to all the people who are involved in this project as without
their inspiration and valuable suggestion it would not have been possible to
complete the project within the prescribed time.

Muhammad Yasir K
19BBA0041

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 OBJECTIVE OF THE STUDY

The study aims to understand the different approaches and strategies used by top 2
E-commerce giants in India - Flipkart and Amazon. The report aims to provide
detailed insights regarding the core business strategies of the companies like entry
strategy, STP strategy, marketing mix strategies etc… Tools such as BCG matrix,
SWOT analysis and Ansoff matrix is used in order to keenly analyse the
differences of the strategy used by Flipkart and Amazon, and the impact it had on
their market performance and the success rate. The reports also sets to compare
various parameters of their marketing strategies, technology adopted, advertising,
strategic collaborations and future prospect for the two companies. In addition to
these the report also aims to identify and analyze the strategies made by Flipkart
and Amazon. The study examines various such viewpoints in regards to Flipkart
and Amazon

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 TABLE OF CONTENTS

TOPIC PAGE NO

Company Profile 6-9

Vision And Mission 10-12

Comparison of Amazon and Flipkart 13-14

SWOT Analysis 15-19

Marketing Mix 20-28

BCG Matrix 29-32

Ansoff Matrix 33-34

Porter’s Five Forces Analysis 35-39

Resources and Capabilities 40-46

PESTLE Analysis 47-51

Business Strategy 52-55

STP Analysis 56-59

Marketing Strategy 60-63

Conclusion 64

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 FLIPKART

 Flipkart is an Indian e-commerce company, headquartered in Bangalore, Karnataka,

India, and incorporated in Singapore as a private limited company. The company
initially focused on online book sales before expanding into other product categories
such as consumer electronics, fashion, home essentials, groceries, and lifestyle
products. The service competes primarily with Amazon's Indian subsidiary and
domestic rival Snapdeal. As of March 2017, Flipkart held a 39.5% market share of
India's e-commerce industry. Flipkart has a dominant position in the apparel segment,
bolstered by its acquisition of Myntra, and was described as being "neck and neck"
with Amazon in the sale of electronics and mobile phones. Flipkart also
owns PhonePe, a mobile payments service based on the Unified Payments Interface.
In August 2018, U.S.-based retail chain Walmart acquired a 77% controlling stake in
Flipkart for US$16 billion, valuing Flipkart at around $20 billion

 Flipkart has launched its own product range under the name “digiflip”, Flipkart also
recently launched its own range of personal healthcare and home appliances under the

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 brand “citron”. During its initial years, Flipkart focused only on books, and soon as it
expanded, it started offering other products like electronic goods, air conditioners, air
coolers, stationery supplies and life style products and e-books. Legally, Flipkart is
not an Indian company since it is registered in Singapore and majority of its
shareholders are foreigners. Because foreign companies are not allowed to do multi-
brand e-retailing in India, Flipkart sells goods in India through a company called ws
retail. Other third-party sellers or companies can also sell goods through the Flipkart
platform. Flipkart now employs more than 15000 people. Flipkart allows payment
methods such as cash on delivery, credit or debit card transactions, net banking, e-gift
voucher and card swipe on delivery. Flipkart is presently one of the largest online
retailers in India, present across more than 14 product categories & with a reach in
around 150 cities and delivering 5 million shipments per month.

AMAZON

 Amazon.com, Inc. is an American multinational technology company which focuses

on e-commerce, cloud computing, digital streaming, and artificial intelligence. It is

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 one of the Big Five companies in the U.S. information technology industry, along
with Google, Apple, Microsoft, and Facebook. The company has been referred to as
"one of the most influential economic and cultural forces in the world", as well as the
world's most valuable brand.

 Amazon is the largest internet based company in the united states. Amazon.com
started as an online bookstore, but soon diversified, selling dvds, vhss, cds, video and
mp3downloads/streaming, software, video games, electronics, apparel, furniture,
food, toys, and jewellery. The company also produces consumer electronics notably,
kindle, fire tablets, fire tv and phone and is a major provider of cloud computing
services.

 Amazon has separate retail websites for united states, united kingdom & ireland,
france, canada, germany, the netherlands, italy, spain, australia, brazil, japan, china,
India and mexico, with sites for sri lanka and south east asian countries coming soon.
Amazon also offers international shipping to certain other countries for some of its
products. In the year 2011, it had professed an intention to launch its websites in
poland, and sweden. In early june 2013, Amazon.com had launched their Amazon
India marketplace without any marketing campaigns. In july, 2013, Amazon had
announced to invest $2 billion (rs 12,000 crores) in India to expand business, after its
largest Indian rival Flipkart too had announced to invest$1 billion. 13

ACHIEVEMENTS IN E- COMMERCE:
 On the mobile app side, Amazon had the fastest growing app download rate in 2015.
In october alone, downloads increased 200 per cent. Amazon web traffic was the
highest in october as per comscore data, at 30 million visitors. Amazon active
customers have gone up 230 per cent year on year. The awards were conferred at
etailing India's flagship conference and exhibition 2014, an event that brought

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 together major stakeholders in the retail and e-commerce business in the country. The
"path-breaking debut of the year" award went to Amazon.in.

FAILURE:
Amazon starts using India post and screws up its delivery system in India. At the time
when the competition among online shopping portals in India is at its highest level
possible and each player is pooling in millions from funding’s and trying to beat each
other with never-before discounts and amazing services, Amazon has taken the worst step
ever possible. Amazon India has chosen India post as its primary delivery partner and all
“Amazon fulfilled” orders are now being shipped through India post. Anyone who lives
in India or has some experience with the postal system in India needs no introduction
about India post.

ACQUISITIONS:
It’s no secret that e-commerce giant Amazon has been betting on India as one of its next
big markets outside the u.s. The company is not only investing capital in the region, but
also acquiring startups to help expand its presence in the country. On tuesday, Amazon
announced it had acquired Indian payments company emvantage payments pvt. Ltd.
Amazon did not disclose the acquisition amount. Similar to stripe or paypal, emvantage
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allows online merchants to accept credit and debit cards. The company also allowed
merchants to set up their own branded pre-paid debit cards and mobile payments. In order
to differentiate itself, company acquired many it & e-commerce start-ups like pets.com,
audible.com, junglee.com, imbd.com, zappos.com, woot etc

VISION AND MISSION STATEMENT OF FLIPKART

VISION STATEMENT:

The Vision of Flipkart is to become “Amazon of India”.

 Flipkart’s current vision is ‘To become Amazon of India’. Considering Flipkart is one
of the most looked forward technology company of next decade and Amazon has
already entered Indian market there is a huge need for them to rework and revitalize
on their long-term goal and vision and develop a new Brand idea for coming future.
 The store started with selling books and in 2010 branched out to selling CDs, DVDs,
mobile phones and accessories, cameras, computers, computer accessories and
peripherals.
 In 2011, pens & stationery, other electronic items such as home appliances, kitchen
appliances, personal care gadgets, health care products, air coolers, school supplies,
office supplies, art supplies, apparel & life style products to its product portfolio.

MISSION STATEMENT:

The mission of Flipkart is to “provide their customers a memorable

online shopping experience”.

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 By seeing the mission and values of the organization, it can be inferred that they are
in sync with each other. For example, its mission statement reads out that it wants to
provide customers with online memorable experience and one of its values is
customer obsession. So, until and unless they are concerned about their customers or
obsessed with their customers, they can’t provide delightful experience.
 The mission statement of Flipkart also identifies the purpose of the organization
existence, highlighting the services and the products it offers. Further, it also focuses
on addressing issues of customer satisfaction. The mission statement of Flipkart has
identified its target customer groups, and also identified their needs and demands, and
reflects on how its products and services work towards increasing customer
satisfaction for its target customers.

VISION AND MISSION STATEMENT OF AMAZON

VISION:
Our vision is to be earth's most customer-centric company; to build a place where people
can come to find and discover anything they might want to buy online, says Amazon.

MISSION:
The mission statement of Amazon is “We strive to offer our customers the lowest
possible prices, the best available selection, and the utmost convenience.” The
statement clearly outlines what the customers should expect from Amazon – services that
go beyond meeting their needs. It targets offering the customer the best offers on three

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shopping factors that include the pricing, variety and personal satisfaction. Based on this,
this statement has the following components:
 Affordable prices. Amazon strives to be a company that cares about the

spending of its customers. It does this by giving its customers the lowest prices
without compromising on the quality of the products that it showcases. In fact,
the attractiveness characterizing Amazon across the globe comes down to this
element. In fact, there are no much variations even when making overseas orders
as shown by the affordability of the global shipping rates displayed on the
website of the company. Amazon has also gotten this right through its online
marketing model that ensures its costs of operations stays at the minimum
enabling the company to offer these competitive prices and services.
 Varied selection. To satisfy this characteristic in Amazon’s mission statement,

the management diversifies the range of services and products for the customers

to shop. The presence of these products is one of the major reasons Amazon has
gained popularity as a place where one can find virtually everything and with
ease. Essentially, there is no limit, its selection is simply limitless.
 Top convenience. Amazon prioritizes on the online shopping experience. It
understands that this is the most appropriate ways for clients to access whatever
they want, and at the comfort of their homes. To add to how the company meets
this component, Amazon collaborates with reliable stakeholders to ship all the
orders of its customers fast, irrespective of their location.

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 COMPARISION OF AMAZON AND FLIPKART

Parameter of
Amazon Flipkart
Comparison

Sachin Bansal and

Founder Jeff Bezos
Binny Bansal

Founding year July 5, 1994 2007

Seattle, Washington, Karnataka, Bangalore,

Headquarters
U.S.A. India

Its is a public listed It is a private listed

Company type
company company

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 Amazon is available all It is available only in
Exclusivity
over the world India

Comparison of Comparison of products Comparison of products

products cannot be done can be done

US $ 280.522 billion
Revenue US $ 6.1 billion ( 2019 )
( 2019 )

MAJOR DIFFERENCES:

 Amazon was founded in the year 1994 whereas flipkart was founded in the year 2007.
 Amazon has its headquarters in Seattle, Washington U.S.A. whereas flipkart has its
headquarters in Karnataka, Bangalore.
 Amazon is a public listed company whereas flipkart is a private listed company.
 Amazon is available all over the world. And certain products can be shipped
internationally. Flipkart is an India based company hence it is only exclusively
available in India shipping across India does not happen.
 On the amazon website products cannot be compared for easy accessibility. On the
flipkart website products can be compared which makes it easier for the users to
choose form.
 Delivery Delivery process is almost same in both amazon and flipkart now both are
started one day delivery in its assured products like in amazon assured products is in
prime and flipkart assured product is in mark of flipkart assured.
 Browsing is easy in amazon if we want to purchase some product from another
country this is possible in amazon. Browsing is also easy in flipkart but this is an
indian company so there are not possible purchase anything from other country.

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 Amazon still manages to get a hold on its price differentiation when compared to
other online store. Flipkart still not getting it in some products there are big difference
in price in compare to other store.

SWOT ANALYSIS
FLIPKART - SWOT
STRENGTHS:

 India’s Largest E-commerce Retailer: Flipkart is the India’s largest E-commerce

company & had sold GMV (gross merchandising value) of $1 billion till now.
 Experienced founders: The Founders of Flipkart, Sachin & Binny bansal are Ex-
Amazon employees. Having prior experience in the E-commerce industry helped the
founders to work strategically and differentiate their business in a highly
competitive market.
 Acquisition: With its series of acquisitions like Letsbuy.co,, chakpak.com,
weread.com, Mine360 & the recent one Myntra in 2014 has helped the company to
expand in the E-commerce space & used the capabilities and existing resources of
acquired companies.
 High Brand recall: Flipkart has established itself as a renowned E-commerce
company in India through TV ads, online branding and through its presence on social
media. Brand activities like the “Big billion day” have really increased the brand
recall of the company.

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 Own Payment gateway & Logistic arm: Having its own Logistics arm E-kart &
payment gateway Payzippy has helped the company to control its Expenses. Thereby
passing the benefits to the end customers.
 Exclusive & broad range of products: From having Exclusive rights to launch some
products like MotoG MotoX, Xiaomi Mi3 as well as personal designers segments in
garments category, has helped the company to differentiate and localize its offerings.

WEAKNESS:

 Limited Distribution channel reach: Although its logistics arm has kept cost’s low,

the reach has been affected which is a weakness for Flipkart. Due to use
of outsourcing, Global giants like Amazon & eBay can deliver the product anywhere
in the country. However, Flipkart is still struggling in this field.
 Cost of Acquisition: Due to stiff competition in the market & low customer retention,
the cost of Acquisition is high because Flipkart acquires a lot of customers through
online advertising. As per Flipkart data, the company spends R.s 400/- on acquiring a
new customer on an average.
 Power in the hand of buyers: Since this industry is flooded with many players,
buyers have a lot of options to choose. Switching costs are also less for customers
since they can easily switch a service from one online retail company to another.
Same products will be displayed in several online retail websites. Product
differentiation is almost absent and the fight then begins on the basis of price only.

OPPORTUNITIES:

 Expansion of business: By targeting other emerging markets company can increase

their revenues as well as it can have Economies of scale.
 Expanding their Product categories: This will increase their customer base & at the
same time will reduce the cost of acquisition and customer switch.

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 Changing mentality of Indian customers: With increasing numbers of customers
getting comfortable with online shopping & increase in numbers of Internet users in
India, there is huge potential in this Industry.
 Supply chain: By optimizing their supply chain they can compete with the other
players & can manage the loosing sales on account of not making the product
available due to delivery constraints.
 Establishing in other developing economies: Like Amazon, Flipkart can slowly
start expanding out of India and establish operations in other countries as well which
will help improve revenues.

THREATS:

 Competition: Stiff competition from the global players like Amazon, eBay as well as
local player like Snapdeal, Tolexo and Shopclues who are continuously trying to eat
each other’s market share.
 Government regulations on the issues related to FDI in multi branding retail has
been a big hurdle in the success of the E-commerce industry in India.

SWOT ANALYSIS
AMAZON – SWOT

STRENGTHS:

 Strong background and deep pockets – Built on its early successes with books,

Amazon now has product categories that include electronics, toys, games, home and

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 kitchen, white goods, brown goods and much more. Amazon has evolved as a
global E-commerce giant in the last 2 decades.
 Customer centric: Company’s robust CRM has created customer centric processes in

order to carefully record data on customer’s buying behavior. This enables them to
offer individual items, related items or bundle them as an offer, based upon
preferences demonstrated through purchases or items visited. Also,
the company claims that 55% of their customers are repeat buyers resulting in low
cost of acquisition of new buyers.
 Cost leadership: In order to differentiate itself, company has created several strategic

alliances with other companies to offer superior customer service. The most important
strategic tie ups are with logistics providers who control costs. This contributes in a
strong Value chain. Because of playing on economies of scale, Amazon is able to
lower the inventory replenishment time.
 Efficient delivery network: With its strategic partners & due to its Amazon

fulfilment centers, Amazon has created a deep & structured distribution network in

order to make the product available even at remote locations. It also has free of cost
delivery charges in certain geographies.
 GLOCAL strategy: By using the strategy of “Go global & act local”, Amazon is

able to fight with domestic E-commerce companies through absorbing & by forming /

partnering with supply chain companies. The branding too is done as per local taste.
For example – In India, Amazon is currently using the “Aur Dikhao” campaign to
encourage users to browse more of their products.
 Acquisitions: Acquiring companies like Zappos.com, Junglee.com, IMBD.com,
woot.com etc. has proven to be a successful and revenue generating step for the E
commerce giant.

WEAKNESS:

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 Shrinking margins: Due to extensive delivery network & price wars Amazons
margins are shrinking, which is resulting in even losses. In India, Amazon had a loss
of $359 crs in the year 2013-14.
 Tax Avoidance issue: Amazon has attracted negative publicity on account of Tax
Avoidance in countries like U.S & UK. Most of its revenue is generated from these
well established markets.
 High Debt: In many developing nations Amazon is still struggling to make the
business profitable thereby affecting the overall profitability of the group resulting
into High debt.
 Product flops – Amazon launched the fire phone in the US which was a big flop. At
the same time, Kindle fire did not pick up as strongly as Kindle did. Thus, there were
several product flops which caused a dent in Amazon’s deep pockets.

OPPORTUNITIES:

 Backward Integration: Amazon can come up with its In-house brands in different

product categories. They can also differentiate their offering. This will help them
make profits in highly competitive E-commerce market.
 Global Expansion: Expansion mainly in Asian & developing economies will help

Amazon because those are the markets with low competition in E-commerce

industries & are not saturated like developed economies.
 Acquisitions: By acquiring E-commerce companies it can decrease the competition
level & also can use the specialized capacity of the other company.
 Opening physical stores outside U.S: By doing this Amazon can help the customers

to engage with the brand, resulting in increase in repeat purchases & increase in

loyal customer base.

THREATS:

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 Low entry barriers of the industry: Low entry barriers affect the current player’s

business as more & more company means tough competition, price wars, shrinking

margins & losses resulting into questioning the sustainability of the players.
 Government regulations: Not having clarity on the issues related to FDI in multi
brand retail, has been a big hurdle in the success of the E-commerce players in many
developing nations.
 Local competition – India has snapdeal and Flipkart who are local E commerce

retailers and are taking away majority of the market. Similarly, there are many local
players who take bites from the market share thereby making it hard for a big player
like Am;azon to make profits.

MARKETING MIX
FLIPKART – MARKETING MIX

Marketing Strategy of Flipkart analyses the brand with the marketing mix framework
which covers the 4Ps (Product, Price, Place, Promotion). There are several marketing
strategies like product innovation, pricing approach, promotion planning etc. These
business strategies, based on Flipkart marketing mix, help the brand succeed.

Flipkart marketing strategy helps the brand/company to position itself competitively in

the market and achieve its business goals & objectives.

PRODUCT:

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The product strategy and mix in Flipkart marketing strategy can be explained as
follows:

Flipkart sells products in more than 80+ categories ranging from books, clothing to
electronics, mobiles and appliances. Flipkart can be considered as a service platform
which acts as an interface between sellers and buyers. Hence the product offering in its
marketing mix is divided broadly into two:

Product to the Seller:

Flipkart is a platform to showcase his product. It also provides analysis of the products
sold by the seller on its website like how many units are sold, how much profit he is
making, opportunity to promote his product, the type of logistic channel which will
provide him better profits and which product is not selling and several analyses for the
same. Flipkart also provides the option of Flipkart assured where the products of the
seller are kept in warehouses owned by Flipkart. The products are picked, packed and
dispatched by Flipkart mostly through its logistic partner E-kart

Product to Buyer:

A platform where he can access products sold by several companies and vendors and
decide on the product to buy based on the price and other criteria like vendor capability to
deliver the promised item. Flipkart also provides a hassle-free payment system- pay
online through debit, credit, net banking and Cash on delivery. A sub category service
offered by Flipkart to its providers is Flipkart assured where the product bought by the
buyer undergoes 6 quality checks and fast and free shipping. Flipkart provides the rating
of the product and the seller which helps the buyer make right decisions

PRICE:
Below is the pricing strategy in Flipkart marketing strategy:

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 Flipkart has built its pricing model in such a way so that it competes with other
ecommerce players.

 By following the marketplace model Flipkart reduced the price by forcing the sellers
to compete among themselves to provide the cheaper product. Flipkart does not
charge for its delivery service if the order is more than Rs 500 but charges a nominal
charge for less than Rs 500 in the case of Flipkart assured. If the product is directly
shipped by the seller, then the seller charges of shipping apply. Flipkart also offers
one-day delivery where the product is delivered within a day but in this case Flipkart
charges extra service charge and installation option for a price in certain locations.
This gives an overview of the pricing strategy in the Flipkart’s marketing mix.

Other facility for buyers include

 Availability of E- wallet and E-gifts facility.

 EMI facility for certain products

Flipkart charges monthly warehouse charges, referral charges and shipping charges from
the seller. These charges vary according to the option chosen by the seller.

PLACE:
Following is the distribution strategy in the Flipkart marketing mix:

 Flipkart follows a hub and spoke model. It has 21 state of the art warehouses. Here the
products are initially sorted and packed. Goods move from these warehouses or
fulfilment centres to mother hubs. Mother hubs are located at the centre of a 200
kilometre radius zone that consists of 3 to 5 major cities that accounted for majority of
demand as well as numerous smaller cities. From the mother hubs, the goods are
transported to local hubs from where the delivery van or bike picks and delivers the
products.

 Flipkart deliver products to customers pan India through an extensive deliver network.

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PROMOTION:
The promotional and advertising strategy in the Flipkart marketing strategy is as
follows:

 Flipkart started with their famous campaign in 2011 under the name “No kidding no
worries”. Here the campaign was about kids acting in adult roles. These ads have
made a comeback recently but now concentrating on “Get The Best Of Everything On
Flipkart #PerfectBuy! “.

 Flipkart has been aggressive in its promotion and advertising strategies as a part of its
marketing mix. Flipkart promotes through print media sometimes through a full-page
ad especially during their Big Billion Day.

 Big Billion day is a promotion tool used by Flipkart where throughout the day
Flipkart sells products at a cheaper rate sometimes providing huge discounts. Flipkart
has other promotional tools like big freedom sale, deals of the day, offer zone page on
its website and app.

Major digital marketing done by Flipkart:

 Uses its app to send pop ups to its customers of the latest offers

 Makes use of data mining and ad words to send dedicated ads to prospective
customers

Since this is a service marketing brand, here are the other three Ps to make it
the 7Ps marketing mix of Flipkart.

PEOPLE:
Flipkart direct mode of contact with the buyer is through the customer care centre which
considers cancellation, supplier issues, product damage issues and other issues faced by
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the customer while conducting a transaction. The other mode of contact with the buyers
is through the app and the website. These modes are indirectly linked to the people in the
company as the IT infrastructure and the website has to be updated and safeguarded from
crashes as this might lead to huge losses for the buyers, sellers and Flipkart as a whole.
The point of contact with the seller is through the seller portal on Flipkart and through the
Business development executives. If the buyer is taking Flipkart assured the packaging
and parcelling of the product is done by Flipkart executives and the product undergoes 6
quality checks which helps the seller provide high quality products to the customers. So
highly qualified individuals are hired by Flipkart for the same.

PHYSICAL EVIDENCE:
Flipkart offices, delivery boxes, packaging material etc are all a part of its physical
evidence. The product delivered by Flipkart is well packaged and cushioned to avoid
damages to the product. The product also undergoes 6 quality checks as mentioned earlier
so as to deliver high quality products. Prompt delivery of the product, the 30-day return
policy, site and app user interface, and the cash on delivery option add to the physical
environment provided by Flipkart.

PROCESS:
Flipkart has several business processes in place to ensure smooth execution of its services
and deliveries. As soon as the person lands on Flipkart page the offers and the products
browsed by the customer before are listed. The buyer can choose the option of buying the
product or adding it to the cart and shop for other items. As soon as the product is ordered
the product is packed, processed and shipped from the fulfilment centres. The product
can be tracked by the user from the fulfilment centre to the point of actual sale. In case of
Cash on delivery the person pays the amount to the person who comes to deliver the

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product. Else if paying online the payment gateways are used by Flipkart to purchase the
product. Every process is made sure that it is hassle ad bug free by Flipkart. Hence this
concludes the Flipkart marketing mix.

MARKETING MIX
AMAZON – MARKETING MIX

Marketing Strategy of Amazon analyses the brand with the marketing mix framework
which covers the 4Ps (Product, Price, Place, Promotion). There are several marketing
strategies like product innovation, pricing approach, promotion planning etc. These
business strategies, based on Amazon marketing mix, help the brand succeed. Amazon
marketing strategy helps the brand/company to position itself competitively in the market
and achieve its business goals & objectives.

PRODUCT:

The product strategy and mix in Amazon marketing strategy can be explained as
follows:

 Amazon is one of the leading ecommerce platforms in the world, and is recognized as
one of the top five IT companies globally. Amazon sells all its products online where
the users login to Amazon through website or App and place orders. These are then
delivered to the consumers through its distribution channels. Although Amazon
started as an online book seller, it diversified its product portfolio by leaps and
bounds. Amazon has a huge offering in its product portfolio in its marketing mix.

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 The ‘product’ Amazon is the website and the apps which offers different types of
goods for consumers. Its retail division include everything from apparels to auto parts,
toys to electronic gadgets, home décor to health/beauty utilities. These products are
not only sold by Amazon but also by 3rd party sellers listed with Amazon. This
market place model of business is bringing huge profits to Amazon.

 It also started selling gadgets like e-book reader, Kindle and Fire tablets and phones.
Amazon’s digital services like on demand music, video and e-books is also one of the
major contributor in its sales. The company is also providing a host of web services
like cloud storage, database services to budding start-ups and other organizations.

 Grocery items are also being delivered to consumers by Amazon through its services
like Amazon Prime Pantry and Amazon Fresh. It is also providing publishing services
to the business and individuals. Amazon’s AWS services, which provides web hosting
services for customers and clients, is also a strong product in its portfolio. 

 The company has acquired some companies like IMDb, Ring, Twitch, Whole Foods
Market etc, which has strengthened its position.

PRICE:

 Amazon has got a market leader and competition based pricing strategy in its
marketing mix.

 As the different kinds of services are offered by Amazon its pricing strategies are also
varied. It uses technology to its advantage in setting the prices. Most of the time the
price of products is set following the competitive pricing strategy. Amazon offers the
lowest of prices and this is made possible by the efficiency of its operations and also
its web-based business model. It adjusts the prices frequently based on the category of
product, time of the day and season. Amazon also provides value added services like

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 Prime where users pay subscription charges for one-day delivery and early access to
the deals. Amazon also follows differential pricing, for the same product it charges
different price depending in the place of consumer as it is having different websites in
each country it operates. AWS is also a market leader in offering high quality low
priced web hosting solutions.

PLACE:

 Amazon is a global brand and has its presence all across the world. All the consumers
buy products and services from the website and Apps of Amazon.com to buy. Once a
customer places the order the distribution channel of Amazon comes into picture
where the products are procured and stored at Amazon’s fulfilment centres. These are
huge warehouses constructed by Amazon in strategic locations to reach even the
remotest of places. These are categorized into sortable fulfilment centres (large and
small goods), non-sortable, customer return and speciality items warehouses. From
these fulfilment centres the goods are transferred to distribution centres and then to
customers. Amazon uses the local postal and courier services for the transportation of
packages. But recently few experts are claiming that Amazon is conceptualizing for
its own distribution network for delivery of packages. This will bring the costs even
down for the company.

PROMOTION:

 Amazon uses aggressive marketing campaigns to promote its brand. When it comes to
promotion Amazon leaves no stone unturned in its marketing mix promotional
strategy. Its major focus is on advertising – through print ads in newspapers have
increased exponentially of late. Amazon uses creative television commercials and
social media marketing through SEO and targeting customers through their browsing
patterns. Amazon also have affiliate programs where website and blog owners
advertise Amazon product links in their platforms. Next important thing is sales

27
 promotion – Amazon has mastered this art and give effective sales promotions and
discounts during holiday seasons and festivals resulting in high visits to the website.
Public relations exercises to improve brand image like launching Amazon Smile
which donates to charity organizations. ‘Gift a Smile’ in India is an initiative where
people can send their gifts directly through Amazon to NGO’s that are partnered with
the company. Direct marketing to companies for providing its web services is also
performed by Amazon.

Since this is a service marketing brand, here are the other three Ps to make it
the 7Ps marketing mix of Amazon.

PEOPLE:

Amazon gives a great importance to its workforce. Irrespective of what level and domain
of the organization they are working people get benefits from Amazon which makes it a
desirable employer. These benefits include health, financial, assistance programs, some
time off like vacations and equity plans. There are nearly 2,30,800 employees working
across the globe round the clock to ensure best customer experience and as Amazon is the
most visited website in retail space (1.27 billion/year) it offers its employees a great deal
of training and development activities.

PHYSICAL EVIDENCE:

 Amazon’s biggest physical presence is its website. As it is an online retailer the place
of service is its website and apps which very user-friendly and built with great design.
Amazon’s warehouses and fulfilment centres present in all countries of its operations
are the largest one can ever find. It has logo which is very well resembling what
Amazon stands for, i.e. an arrow from a to z which implies one can buy anything on

28
 Amazon. Its packages also sport this logo. Amazon releases its financial reports also
for its investors and users yearly providing information about where company stands
and where it aspires to go. Hence, this summarizes the Amazon marketing mix.

PROCESS:

 Amazon is a world leader in ecommerce and web services and has got a strong
process oriented business. As we have seen earlier that Amazon strategically divided
its warehouses and fulfilment centres for operational efficiency, it also uses the best in
the business technology to support its daily activities and also in its advertisements,
serving the customer like providing the information about the location of his package.
Also its association with websites like Twitter, where by reacting to any tweet from
Amazon people can add any product to their cart. Its customer relationship and
information management are core to its business strategy. Amazon Robotics has also
been developed, which is used at the company warehouses for inventory management.

Amazon marketing strategy: Amazon uses the high runner strategy to market its
products. This strategy uses data to uncover which products are in the highest demand in
every category. Amazon's pricing algorithm then prices those products competitively and
bids heavily on advertisements to pull people to these products. The high-runner
strategy is a powerful way to change your company's price perception and capture more
sales.

BCG MATRIX ANALYSIS

FLIPKART – BCG MATRIX

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STARS:
 An organization’s “Star” items live in the upper left quadrant with high piece of the
pie and high development. As a result of the organization’s generally solid piece of
the overall industry the organization has a decent focused position? The high
development additionally implies that there is the chance to keep on increasing
income and benefits. (ROGGIO, 2014) For “Star” items, clutch what you have or for
some situation attempt to keep on growing, however this is truly a zone of direct
showcasing and publicizing speculation.
 Flipkart’s marketing segment (counting Myntra) and in addition its gadgets section is
a Star in the BCG grid. The reason is that the fragment is developing and more and
more clients are getting acclimated with web purchasing of garments and gadgets
things in India. (Prasad, 2014) Be that as it may, as the market is gigantic, the piece of
the overall industry is less for every E-trade player and they are contending
energetically for it.

CASHCOWS:
 Items in the lower left quadrant are called “Cash Cows.” In these occurrences the
organization has generally great share of the market, yet is confronted with low
development. These are items that are cash makes, yet they won’t really take the
merchant further, developing income or benefits after some time. Here the procedure
is to reap from these items to contribute somewhere else. Exploit achievement, yet
don’t rest.
 The Flipkart cash cows are the books from which it started the career. Flipkart is
assessed to have a one-fifth share of the online retail showcase in India – how can it
plan to hold that share? One is grow coordination, a center quality where huge
ventures and innovation helped Flipkart turn into the best quality level in conveyance
in India.

30
QUESTION MARKS:
 With high development and low piece of the pie, items in the upper right are alluded
to as “Question Marks.” Businesses essentially don’t comprehend what they speak to
regarding conceivable piece of the overall industry or developing benefits.
Notwithstanding the questions, you need to fabricate advancements for these things,
putting resources into publicizing and advancement. These items have the best
potential for the business since there is a chance to catch impart and to develop to the
market. Simply realize that not each “Question Mark” item will be effective.
 Every single other portion apart from stars and cash cows of Flipkart are question
mark because of serious rivalry between the players. Productivity is low general so
what’s to come is obscure. For Flipkart, there is no alternative however to extend
quick crosswise over classifications to include decision for clients. (Khan, 2014)
Flipkart is presently wagering enthusiastic about the commercial center model for
development which is an exceptionally alluring recommendation for level players
who need to grow quick crosswise over items and classes without significantly
expanding settled expenses.

DOGS:
 Items in dogs quadrant ought to, for the most part, either get no backing or be stripped
— i.e., shut out. The thinking is that contending here will take a noteworthy interest in
time and cash since the organization has low piece of the pie and must remove deals
from contenders who might be better situated in the market. Consider the people who
offer mass-advertise items on Flipkart, wherein the main genuine approach to contend
is to continue slicing costs, bringing down edge, and profiting for the same measure of
exertion. So for the Flipkart there are no dogs, but for the brands that sell their
products on Flipkart can have dogs’ items.

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 BCG MATRIX ANALYSIS
AMAZON – BCG MATRIX

CASH COWS:
There are some product categories that bring in enough revenue for a business entity to
regulate its operations of different business units. These products are labeled as a cash
cow and the manager’s task is to take leverage of these products and utilize their high
market share for gaining high revenues. The industry is mature enough to support the
high sales and the high consumer demand further facilitates in positioning the product as
a cash cow. There is limited chances of gaining any massive growth in future, however
the current profitable position of the business unit communicates a positive outlook for
the company. Amazon has generated a great deal of cash through the sale of its e-books,
making them a cash cow for the company. The company has recognized the potential
held by electronic books, and provided its readers with low cost options for people
seeking books. Kindle has supported the company to use the e-books segment as a cash
cow.

STARS:

The second category of products that is a part of the BCG Matrix is star or rising star,
which holds a high market share. As the name reflects, these products are emerging as the
leading revenue generator for an organization. They do not yield the same financial return
as cash cows, but the future growth of these business units is promising, thus encouraging
the management to continue with the investment in them. Even though these products
require high investment, they are in a growing phase which suggests that these business
units are likely to become cash cows once the industry has reached maturity. The

32
electronic items being sold at Amazon are in demand, making this business unit a rising
star for the company as the market share in this domain is also increasing with time. The
industry for electronic items is growing, creating vast opportunities for further growth of
Amazon. 

QUESTION MARKS:

The next quadrant included in BCG Matrix is question marks. These products have the
chances of growing into a profitable business, however the limited market share makes it
impossible to use these business units as prime revenue generator. The industry is still in
growth phase, which indicates that question marks may emerge as a rising star if the
business is able to set the right direction for these products. Moreover, environmental
conditions that promote growth of these items is also a key consideration in determining
the future of question marks. The segment of video on demand had some issues such as
poor connectivity which has limited the growth of this segment, making it a question
mark.

DOGS:

The last category in BCG Matrix is used to identify those products that are not generating
high sales and have not been able to establish a notable market share. The industry is
slowly progressing with little scope of further development, further adding to the
complexity of the external business environment. These products do not offer significant
financial gain to the company, instead they consume cash investment. Due to this
attribute, dogs are recognized as cash traps, since they are not expected to help the
business through high ROI. For Amazon mp3 has not been able to provide the company
with any solid financial gains, therefore it can be placed into the category of dogs. The
mp3 business doesn’t have a high market share and the industry is also growing at a slow
pace.

33
BCG Matrix analysis:The matrix comprises 4 quadrants, cash cows, stars, question
marks and dogs. The identification of a product in relation to these categories is
based on the market share and industry growth prospects. Amazon.com Inc. has
been a part of the online market, using its website to access the customers across the
globe.

ANSOFF MATRIX ANALYSIS

AMAZON – ANSOFF MATRIX

MARKET PENETRATION: In market penetration, a company attempts to sell

existing products in its existing markets. Amazon does this by continuously marketing its
products in the various markets it is already serving. The various products it sells online
such as electronics, clothes, furniture, and so on are regularly marketed in its existing
markets. The intention is to penetrate deeper into its existing markets. By creating new
advertisements, promotions, offering discounts, and encouraging bulk purchases are often
employed by Amazon. The company also has introduced Amazon Prime for its premium
customers to further benefit from their loyalty (Dudovskiy, 2018). Members are
motivated to make repurchases through discount promos. The company also introduces
new facilities such as apps and other functions to further create ease of purchasing. The
company also has acquired various smaller brands in different markets. The company
continues to gain market share.

MARKET DEVELOPMENT: During market development, Amazon launches

its existing products in new markets. The company continues to expand into new
geographical areas. These include different countries the country keeps expanding into.

34
To create ease for these regional markets, the company introduces its website in the
regional market it plans on entering. For example, in India, Amazon launched its website
in Hindi to facilitate new customers. Many of the potential customers in India cannot read
or understand English fluently. The company has done the same for various other
regional markets as well. The website also lists various local products that are specific to
the new market. This helps to develop a greater acceptance in the new market for the
existing products the company is selling. The company has also introduced Amazon
Prime same day and Amazon Prime one day delivery services in many of these new
markets.The various new delivery systems have helped the company develop its markets.

PRODUCT DEVELOPMENT: This refers to launching new products in

existing markets. Product development is one of the core strategies and is prominently
reflected in the history of the company. The company started with a single product i.e.
books. The company continued to expand its product portfolio over the years and now
sells almost everything online through its website. This includes furniture, clothes,
electronics, smartphones, and much more. The company continued to grow with respect
to its product portfolio. Today the company has become the largest retailer based on the
number of products it sells which have crossed 500 million. The company also allows
third-party sellers to utilize its platform to sell their products. The product portfolio
continues to grow as new products are launched by various brands making product
development at Amazon progressive.

DIVERSIFICATION: Diversification refers to launching new products in new

markets. This is a risky strategy for every organization. Amazon does diversification in a
number of ways. These include the acquisition of various new businesses already
operating in new marketing such as the acquisition of Whole Foods. The company also
launched its cloud services for its clients to enter the software industry with its new
products. The company also launched Amazon Go, a retail store that allows customers to

35
select products from shelves and walk away. The store automatically scans the products
as they are lifted from the shelves and cuts the payment from the Amazon account of the
customers. The company continues to diversify in this manner and launch new products
in new markets under the same or different brand names. The company started with
books. It then executed market development and entered new markets. It then worked on
product development and launched various new markets in its existing markets.

PORTER’S FIVE FORCES ANALYSIS

FLIPKART – PORTER’S FIVE FORCES

BUYER POWER:
 Buyers in this industry are customers who purchase products online. Since this
industry is flooded with so many players, buyers are having lot of options to choose.
Switching costs are also less for customers since they can easily switch a service from
one online retail company to other one. Same products will be displayed in several
online retail websites. So, product differentiation is almost low. So, all these factors
make customers to possess more power when compared to online retail companies.

THREAT OF SUBSTITUTES:
 Substitute for this industry as of now is physical stores. Their threat is very low for
this industry because customers are going for online purchases instead of going to
physical stores as it will save time, effort, and money. With the advent and
penetration of internet and smart phones, future in retail belongs to online retail.
 When we compare relative quality, relative price of product that he/she buys online
with physical store, both are almost same and, in some cases, online discounts will be
available which makes customers to buy products online.

36
THREAT OF NEW ENTRANTS:
 Threat of new entrants is very high in this online retail industry because of following
reasons:
 Indian government is going to allow 51% FDI in multi-brand online retail and 100%
FDI in single brand online retail sooner or later. So, this means foreign companies can
come and start their own online retail companies.
 There are very less barriers to entry like less amount of money required to start a
business, less amount of infrastructure required to start business. All you need is to tie
up with suppliers of products and you need to develop a website to display products
so that customers can order products, and a tie up with online payment gateway
provider like bill desk.
 Industry is also going to grow at a rapid rate. It is going to touch 76 billion $ by 2021.
Industry is going to experience an exponential growth rate. So, obviously no one
wants to miss this big opportunity.

SUPPLIER POWER:
 In this industry, suppliers are the manufacturers of finished products like Nike, Dell,
Apple etc. Online retail companies sell various products ranging from books to
computer accessories to apparels to footwear. Since there are many suppliers for any
particular category, they can’t show power on online retail companies.
 For example, if you take computers category, there are many suppliers like Dell,
Apple, Lenovo, and Toshiba who wants to sell their products through these online
retail companies. So, they won’t be having power to control the online retail
companies. Online customers can select the products on their own and the switching
costs in this case is zero. It is very difficult for manufacturers of finished products to
come into this industry because of challenges in Logistics.

37
 Online retail industry is important to suppliers because it acts as one of the channel to
sell the products. Now, with most of the customers in India purchasing online through
online retail companies, they can’t afford to lose this channel. So, they can’t dictate
terms with online retail companies. So, in this industry the supplier power is low.

COMPETITIVE RIVALRY:

 Competition is very high in this industry with so many players like Flipkart, Myntra,
Jabong, Snapdeal, Amazon, Indiaplaza, Homeshop18 etc.
 Flipkart is facing a lot of competition from many online retailers like Snapdeal,
Amazon, Homeshop18. Indiaplaza and many more. Flipkart is working in online retail
industry. According to a recent TechnoPak report, e-tailing has the abilities to grow in
more than hundred-fold in upcoming 9 years and to reach $76 billion approximate in
2021. This growth will be increased by the country's growing Internet users, which
will may be comprising 180 million broadband users approximate 2020, and a rapidly
increasing class of Internet users. In few years Indian online retail industry will grow
to approximately 10 billion dollars. Some of the major challenges faced by online
retailers are education, trust and customer loyalty. Many customers like Cash on
Delivery option in place of credit/debit card payment, Rivalry is high in this industry
with such a large number of players like Flipkart, Myntra, Jabong, Snapdeat Amazon,
Indiaplaza, Homeshop18 and so on.

PORTER’S FIVE FORCES ANALYSIS

AMAZON – PORTER’S FIVE FORCES

38
COMPETITIVE RIVALRY:

 The rivalry in the online retail industry is very high. This is because the number of
players in the recent years has grown. Secondly, traditional brands are also offering
online sales giving further competition to these online retailers. The competitors of
Amazon are eBay, Alibaba, Flipkart, and others. For Amazon, it's not just these other
giants that are giving it a tough time: many small-scale retailers, brands, and online
stores are also fighting it for market share. There are many online retailers that are
specifically targeting particular products such as electronics, apparels, auto parts etc.
All of this has lead to intense rival competition for Amazon.

THREAT OF NEW ENTRANTS:

 Although it is not difficult to create an online retail store but to reach the level of
Amazon would take a lot of investment. time, and efforts. The expansion and growth
of the digital technology has brought a number of changes in the retail industry. Many
new brands have entered the e-retail segment. Many international and domestic
brands have emerged. All of these brands can enter the market but won't be able to
take on a giant such as Amazon. It would require extensive investment in
warehousing, distribution, logistics, marketing and other factors. Similarly, there are
many others factors like time and brand reputation that market difficult for new
entrants to challenge Amazon or attempt to grab market share from it. Thus, the threat
of new entrants is low for Amazon.

BARGAINING POWER OF SUPPLIERS:

39
 Being such an established player in the industry, Amazon always has the upper hand
over the suppliers in the supply chain. Although the number of suppliers to Amazon is
very large, they have to follow a certain set of rules and regulations laid out by
Amazon. Amazon ensures that the suppliers it is purchasing are following ethical
working principles at their work locations. No supplier can even think of forward
integration. The switching cost for supplier for Amazon is almost negligible. Due to
its large sales for every Item, there are a large number of suppliers that are ready to
supply Amazon with the required products.. So, the bargaining power of suppliers
against amazon is low.

BARGAINING POWER OF BUYERS:

 Amazon lays a lot of stress on customer satisfaction and product quality. It ensures
that the products are received on time and any returns or replacements are properly
handled to convert first-timers into repeat customers. The buyers switching cost is
low. Also. buyers are well informed and due to increasing trend of online retailing,
buyers have a number of options to go to. Buyers have a strong bargaining power
against Amazon due to the number of competitors it has.

THREAT OF SUBSTITUTES:
 The substitution to Amazon are retailers like Wal-mart, branded outlets, online stores
of brands that Amazon also sells small markets in cities and soon. Since Amazon does
not sell anything unique It faces very high threat of substitution. A single bad
experience will drive a customer away from online retailers. At the same time, there
are still many people today that prefer to visit a retailer rather shop online for their
needs. This all creates high threat of substitution for Amazon.
 Amazon competes with substitutes in the online retail as well as with the offline retail
market. The biggest hurdle that Amazon faces is low switching cost in the industry, as
customers can easily change from Amazon to other retailers. As Amazon does not sell

40
 unique products, and most of the products are retail products, so giving the best
customer experience becomes a necessity for the company.And a single bad
experience will drive the customers away from Amazon because of the easy
availability of substitutes at a cheap rate. Thus, the High threat of substitute in the
porter’s five forces analysis of amazon shows that Amazon highly focusses on
customer experience to attain success in the online retail industry.

RESOURCES AND CAPABILITIES

FLIPKART

RESOURCES:

 A good resource management strategy includes knowing which resources are

available, where their time may already be allocated, and how productive/profitable a
resource is in certain scenarios. With the right resource management strategy,
companies can reduce costs and improve productivity.
 Flipkart Assured is an inclusive customer-centric guarantee from Flipkart focused on
two deliverables: quality and speed. Flipkart Assured products are verified, packed
with care, and dispatched safely. Customers shopping on the Flipkart platform will
now be able to clearly identify eligible products by a ‘Flipkart Assured’ badge.

APP ONLY DISCOUNTS: Whether you’re a sale junkie or a bargain hunter, the
Flipkart mobile app is your best bet for bigger and better discounts. Flipkart has a number
of offers that are available only to customers shopping through the app. Save some
money, get great deals and find out about new ones. Sounds good?

41
SHOP WHERE YOU ARE: You’re at the gym and realize you need a set of wireless
headphones or you’re at a café and learn that you simply must have that amazing tea
steeper—with the app, you no longer have to wait to get home to buy it, and you don’t
run the risk of constantly forgetting what you need. Shop instantly because it’s always the
right place and the right time!

BE IN THE KNOW: Don’t want to rely on frantic phone calls from your mom or your
friends anymore? Then don’t. The Flipkart mobile app alerts you to sales, new products
that might interest you or special offers that are available. As an app user, you will get
every notification you need right on your smartphone, and won’t ever miss out on any
opportunity, sale or discount. Yay!

42
SHOP SMARTER: Are you one of those people who has to see a thousand similar
products before you pick the best one? With the Flipkart mobile app, you can be as
choosy as you want. Featuring millions of products and over 3,000 brands, the app gives
you an instantly accessible and smart way to compare different products, so you can
decide on one that best suits your needs and comes cheaper too. Alright!

TAKE ADVICE AND BE INSPIRED: There is no better way to make good decisions
while you shop than running your choices by your friends or family first. Ping, a Flipkart
mobile app feature, allows you to stay connected as you shop, so that can share your
selected products and pages with them right on the app. And what if, during your walk to
work or a jog around the park you see the perfect shoe or a leather briefcase that you
know you’ve got to have? The Image Search option gives you the chance to take a picture
right

MAKE YOUR WISHLIST: You can love only a few things at first glance. For
everything else, there’s Wishlist! A Flipkart mobile app feature that allows you to store
all those products you potentially like, but want to think about (or share with friends and
make a list of pros and cons), Wishlist gives you the convenience of coming back at your
leisure to view all your potential selections without making you do the hard work of
43
finding them all over again. Shopping for a new handbag but realise you aren’t ready to
take the plunge yet? Add it to your Wishlist and come back view it when you decide
you’re ready. Easier than pie!

SAVE YOUR DATA AND MEMORY: Not only does the app download in less than a
minute, but it also uses minimal data and phone memory, so it’s a lot easier on your
smartphone than shopping online. With instant access and optimal speed, you can shop
faster without having to wait too long for your order to be processed. What could be
better?

PAY EASY: Paying for your online purchases has never been this easy. You can choose
the effortless cash-on-delivery option or save your payment information on the app and
instantly receive confirmation emails and messages on the same device. This goes a long
way, as you’re not scrambling through multiple devices to keep track of your purchase
and nor do you have to spend inordinate amounts of time digging out your debit or credit
card from your wallet or remembering your net banking id. Whew!
EASY RETURNS: Not happy? If you need to return a product or have it replaced, you
can do so immediately no matter where you are. If you suddenly realize you need to
cancel an order but are nowhere near a computer or don’t have the time to log on online,

44
you can do so through the app and have your request processed immediately. Yup, that’s
one more thing you don’t have to worry about.

TRACK ON THE FLY: Selected your heart’s desire, got your friends to love it, and
placed your order? Well, the only thing to do now is to wait. If you’re not good at
waiting, you can get instant updates on packaging and delivery, and keep track of exactly
when your order will reach you on the app. Kind of neat, even if you’re not a control
freak.

FAST AND FREE SHIPPING: Lakhs of products will be shipped within 2-4 days.
*Orders of value greater than ₹500 are shipped to you absolutely free of charge

CAPABILITIES:

6 QUALITY CHECKS: Flipkart Assured products undergo six quality checks at every
stage from storage to packaging. These quality checks ensure that all customers,
irrespective of where they are shopping from, are served only the highest quality of
products with the most reliable delivery.

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TRANSIT-SAFE PACKAGING: With Flipkart Assured, products are packed in
accordance with Flipkart’s stringent packaging guidelines, using the most suitable
materials to endure the hardest transit. When you receive your order, it will be as pristine
as it was when it left the warehouse.

STRINGENT SELLER GUIDELINES: Flipkart Assured requires sellers to adhere to

exacting quality standards at all levels of the process.

FAST AND FREE SHIPPING: Lakhs of products will be shipped within 2-4 days.
*Orders of value greater than ₹500 are shipped to you absolutely free of charge.

PAYMENT GATEWAY INTEGRATION: Payment gateway is essential in e-

commerce application service provider. It authorizes debit/credit card payment
processing for e-commerce businesses and online retailers. With, Flipkart clone script
you get secure payment gateway which helps in exchanging information between the
payment portal and the banks. It helps in secure payment from buyers to the sellers.

PAY LATER OPTIONS:

 Credit line: You can receive your products, experience them and then pay for them
next month, at your convenience. You can then pay your bill by the 10th of the next
month at no extra cost.
 Instant buy: You can buy products literally with the click of a button, without having
to key in multiple details during the checkout process.
 Bunch up payments: You can shop for multiple transactions in one go and pay later
for all of them at once.

46
 RESOURCES AND CAPABILITIES
AMAZON

RESOURCES and CAPABILITIES:

BRAND IMAGE AND EQUITY: Amazon’s customer focused rand image is a major
source of competitive advantage for the brand. It has managed to create high level of trust
based on the quality of products and services it sells.

LARGE CUSTOMER BASE: Amazon has a very large customer base from all over the
world which is a major advantage for the e-commerce brand.

GLOBAL PRESENCE: The global presence of the brand is also a source of major
advantage.

CUSTOMER LOYALTY: Amazon has also managed a high level of customer loyalty
which works to retain a very large percentage of customers for the life time.

TECHNOLOGICAL INNOVATION: Technological innovation is also a source of

competitive advantage for the brand since it enables Amazon to offer  a unique and greta
customer experience. The brand has continued to increase its expenditure on research and
development.

Resources/capabilities Valuable Rare Inimitable Exploited Implication

Brand image/equity Yes Yes Yes Yes Competitive advantage

customer base Yes Yes No Yes Temporary advantage

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global presence Yes Yes No Yes Temporary advantage

customer loyalty Yes Yes No Yes Temporary advantage

Technology Yes Yes No Yes Temporary advantage

Product range Yes Yes Yes Yes Competitive advantage

HUGE PRODUCT RANGE: Amazon sells a very large range of products whose
number ranges in hundreds of millions.

PESTLE ANALYSIS
FLIPKART – PESTLE

POLITICAL: GOI (The Government of India) is currently trying to boost the

economy of the rural areas by promoting online businesses in these regions. GOI's plan
may see new regulations in the e-commerce industry, which will influence Flipkart's
operations. However, given that India elects leaders every five years, considerable
uncertainty on Flipkart's interaction with the GOI exists because some leaders may be
unfriendly to investors, which will negatively impact the company's operations.
Furthermore, in 2012, the GOI opened up the retail sector to the entry of multi-brand
MNCs to promote FDI (Financial-Direct-Investment), among other logistics that could
improve India's e-commerce supply chain. However, allowing foreign retailers such as
Amazon into the Indian markets has resulted in intense competition for Flipkart.

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ECONOMICAL: Indians' rapidly growing economy assures investors such as
Flipkart of continued markets. Furthermore, the liberalisation of the Indian economy to
allow international investors in various industries including retail will contribute to
economic growth. Furthermore, the government requires that foreign companies in India
should sell or use specific percentage goods (for retailers) and resources (for
manufacturers) respectively that are locally sourced Such a strategy is useful to ensure
sustainable economic growth. Furthermore, states that the number of online consumers is
rising daily and there are expectations that approximately hundred million people will
have gone digital by 2018; this will facilitate the growth of Flipkart.

SOCIAL: Most of the Indian population is rural, which stands at about sixty-nine
percent and, while the urban population contributes to sixty percent of the total GDP. It is
expected that within the next 15 years, the urban population will contribute to almost
seventy-five percent of the GDP. This trend demonstrates the importance of the urban
population to organisations. However, with the current GOI interventions to develop rural
areas, these rural populations will be important to businesses such Flipkart in the future.
Currently, Flipkart is struggling with its logistics, which, understandably, are
concentrated in the urban areas. Nonetheless, as the importance of rural regions, which
carry most of the India populations grow, Flipkart will need to expand its logistics.

TECHNOLOGICAL: Flipkart has implemented data analytics systems for

efficient business performance. Information systems in the company integrate the
information about market opportunities and predict sales that the company is likely to
make. This strategy enables the company to take advantage of technological
advancements such as big data for competitive advantage. Furthermore, by 2019,
approximately eight hundred million people will be using smartphones, and a larger

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percentage will be able to access e-payment platforms for an easier purchase of online
products.

LEGAL: There are legal factors that affect operations of Flipkart. In July 2015,
Westland books accused Flipkart of selling "Scion of Ishvaku", yet Westlands alone was
given the rights to sell the book by Amazon. This conflict demonstrates the need for
Flipkart to be more aware of property rights such as licencing and trademarks. As online
business continues to grow, governments and corporations alike develop regulations.
Some of these rules may complicate business practices or raise operation costs, which can
influence profitability margins.

ENVIRONEMENTAL: Despite the fact that Flipkart is an online retailer, its

operations are subject to environmental factors. Rising concerns by both governments
and consumers about sustainable business and low carbon emissions is a major issue.
Governments promote sustainable business practices through rules and regulations. Some
of the most popular rules pertain to carbon emissions and general environmental
regulations. In some cases, these rules introduce fines or taxes, to organisations, which
lower profitability margins for businesses.

PESTLE ANALYSIS
AMAZON – PESTLE

POLITICAL: Political forces are of utmost importance in the 21st century. It is

because the role of political forces and government agencies in the context of business
has kept growing.   Globally, the political environment can vary from country to country

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and while some are less open to foreign direct investments, the other are more open to it.
A business friendly political environment helps international businesses grow whereas in
many countries international businesses may face an environment hostile to their growth.
Stable political environment offers international businesses more opportunities of growth
whereas unstable political environments can hamper business growth by destabilising
supply chains and distribution networks. Other types of disturbances also happen due to
political chaos or geopolitical threats like terrorism. Amazon is also affected by these
factors and around the world trade policies and trade relationships of US also affect sales
and growth to some significant extent.

ECONOMIC: Economic factors are central to the business in an international

environment. The importance of economic factors can be understood from the factor that
several large businesses of the world had reach the verge of bankruptcy during the
economic recession that ended just some years ago. Economic fluctuations can affect the
businesses and their sales and profits to a large extent. High level of economic activity
leads to higher level of employment and in turn higher disposable income. A fast rowing
Asian economy also offers major new opportunities for brands like amazon and it is the
reason that Walmart bought  a large and controlling stake of around 70% in Indian e-
commerce brand Flipkart. Overall, the central role of economic factors in the context of
international business cannot be denied.

SOCIAL: Sociocultural factors too have acquired a major role in the context of
business. Not just in terms of business and marketing strategy but they are now seen as
playing an important role in customer service and retentions strategies as well. The same
strategy cannot be applied to all markets/regions and that is why businesses use localised
business, marketing, sales and even customer service strategies. Amazon has different
websites for different markets that cater to the local customers. Sociocultural factors
affect marketing strategies since ads that are more suited to the local culture and society
are more successful at connecting with the local customers.

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TECHNOLOGICAL: Technological factors are now more important in the
context of international business than ever. It is because of the growing role of
technology in terms of sales, marketing and customer service. technology controls
everything from online transactions to marketing and level of customer service. It is why
brands need to invest in advanced technology to keep ahead of their competitors and to
provide their customers with a distinct experience. Amazon has invested  a lot in in its
websites and apps and apart from that it also invests in Research and development. This
expenditure has continued to grow every year and is now past 22 Billion dollars. Digital
technology and AI are changing the world of marketing and customer service and how
brands engage their customers. Overall, technology is now a major source of competitive
advantage for any large brand and Amazon itself is a major technology player.

ENVIRONMENTAL: Sustainability and environmental factors are now central to

business and large businesses are devoting more and more resources to make their
business and supply chains more sustainable. It is not just about environmental protection
but also about creating a positive image and building reputation through investment in
green technology ad environment. Amazon is investing in sustainability in several areas
from waste management to recycling and renewable energy. Apart from that it is
investing in partnerships that are targeted at environmental protection around the globe.
Its wind farm in Texas has 110 wind turbines, which is also the largest one owned by
Amazon. All this investment is meaningful because apart from bringing down the carbon
footprint of the brand, it helps it minimise wastage, save resources as well as cut down
costs and create a green and happy ecosystem. More and more technology brands are
investing to gain higher self dependence in terms of energy. Investing in sources of
renewable energy is helping them reduce their dependence on nonrenewable sources and
derate a safer and clever system. Concerted efforts by the large businesses could reduce
the overall pressure on the entire planet.

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LEGAL: Legal factors are affecting businesses and especially the large businesses
more than ever before. The large businesses to remain on the radar of the legal agencies
all the time. This was particularly evident in the case of EU. EU has taken action against
several of the large businesses and slapped major fines on some of them in the last few
years. Even Amazon got to be at the receiving end in one similar case when EU slapped a
fine in millions in from of back taxes. Apart from taxes, there are several areas in which a
large web of laws is frequently troubling international businesses.

BUSINESS STRATEGY
FLIPKART – GENERIC STRATEGY

TYPES OF BUSINESS STRATEGIES:

FLIPKARTS'S COST LEADERSHIP STRATEGY:

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 The primary objective of using this strategy is to preserve the market leadership
position through efficient value chain management.
 This strategy allows FLIPKART to expand the market share by targeting the middle
class, which makes the largest proportion of overall consumer market mix in most of
the countries. Middle class consumers generally place high importance to the pricing
factor and cost leadership is the best strategy to cater the needs of this consumer
segment.
 FLIPKART focuses on affordability and easy accessibility of its produce across the
globe, which leads towards high brand awareness and high sales growth and provides
a strong competitive advantage basis.
 Other than charging low prices by lowering production cost and maximizing supply
chain efficiency, FLIPKART frequently offers discounts and coupons to achieve sales
targets and handle the competitive pressure by its closest rival. The intended outcome
of these discount and promotional campaigns is to increase brand popularity and
encourage consumption.

FLIPKART’S DIFFERENTIATION STRATEGY:

 The adoption of differentiation as a secondary generic strategy allows FLIPKART to

expand the customer base by emphasizing over the unique product features.
 FLIPKART's strategic objective of using this strategy is to differentiate by embedding
the innovation and address the consumers’ growing health concerns. For example,
FLIPKART has extended its product line after studying the consumers’ changing
interests to differentiate itself from competitors and expand the scope of opportunities
within the industry. The combination of the differentiation and cost leadership has
helped FLIPKART build a strong and loyal customer base.
 Through differentiation generic strategy, FLIPKART positions its product offerings in
a way to stand out and be different from the available alternatives. Being the
experienced brand with strong foothold, the company uses differentiation as a tool to

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 reduce the pressure by other brands. Heavy investment in marketing, advertisement
and celebrity endorsement is made just to differentiate the FLIPKART from other
brands.
 Extensive experience, the oldest brand and strong presence in all over the world are
some differentiation factors that are highlighted in the company's marketing and
communication strategies.
 Other than these, the brand logo is also used to set the differentiation basis. The
unique and distinctive brand logo has established a strong brand image in consumers’
mind. Although the brand has undergone many revisions, the essence has remained
the same, which also serves as a strong differentiating factor.

FLIPKART’S FOCUS STRATEGY:

 FLIPKART adopts the focus strategy both in terms of low cost and offering the best
value. The low-cost focus strategy is adopted by serving the needs of a niche market
segment at the lowest possible price. While, best value focus strategy is adopted by
emphasizing over the taste, size and design of the product that could best match the
customers’ needs and requirements.
 By focusing on product attributes, FLIPKART revises its branding strategies and
brings continuous changes in the product designing and packaging to satisfy the
customers’ psychological expectations and maximize value for money.

BUSINESS STRATEGY
AMAZON – GENERIC STRATEGY

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TYPES OF BUSINESS STRATEGIES:

AMAZON'S COST LEADERSHIP STRATEGY:

 Amazon business strategy can be described as cost leadership taken to the extreme.
Range, price and convenience are placed at the core of Amazon competitive
advantage. Amazon’s overall cost leadership with little product differentiation means
that its business model has been copied by “me-too” competitors in a cutthroat price
war that has left everyone bruised. Further, its focus on cost reduction at the expense
of product differentiation means that its products are available on other portals as well
and there is no product line that is exclusive or unique to it.

AMAZON’S DIFFERENTIATION STRATEGY:

 Amazon’s main generic strategy is that of differentiation. How it has differentiated its
business models is with the use of technology and skilled human resources.  It serves
its customers through its website and apps. The online model does not require the use
f physical retail space. The only space utilized is that for office work. Amazon has
developed a lot from being a book seller to being the largest retailer online. Not just
this Amazon used best in class technology to serve its customers and enable its

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 employees to perform. It has software and algorithms for various things including box
sizing to delivery. It also has a rich history of developing and introducing cutting edge
technology at its fulfillment centers that help its employees deliver efficiently.

FLIPKART’S FOCUS STRATEGY:

 Its focus on customer service. This is not just a point of differentiation but one of the
key competitive strengths of Amazon. It is known for its great quality of service.  Its
quality of customer service has turned it into the favorite of online shoppers.
However, the large range of products that it sells also comprises a key competitive
strength.  In this way, Amazon has achieved a sustainable competitive advantage.

STP ANALYSIS
FLIPKART - STP

SEGMENTATION:

 All internet users and shoppers

TARGETING:

 Flipkart concentrates on more psychographic, which helps in deciding where to

display ads online
 They target online shoppers and people who don’t online shop (thus TVC to
encourage them)

POSITIONING:

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 Customer delight (low price, free shipping, replacement of faulty products) 

 No kidding no worries 

 Online megastore 

 One stop solution

STP ANALYSIS IN GENERAL:

 Flipkart uses undifferentiatedtargeting strategy, sincepeopleof alldemographypurchase

items online which is available to everyone where the delivery is possible. National &
Multinational E-commerce companies are giving neck to neck competition to each
other, due to which theirpositioningis very important. Flipkart has positioned itself as
a trust worthy and customer friendly E-commercebrand.
 Having its own distribution firm (Ekart) and payment gateway payzippy has helped
the company in controlling its expenses and passing the benefits to the end
customer.Thus it will reduce their cost and increase their sales.
 Flipkart have garnered amarket leaderposition through its innovative branding
strategies. The “big billion day”, “ No Kidding, No Worries”, “Fair-Tale”,“Shopping
ka Naya Address” , “Shop Anytime, Anywhere” are the successful campaigns that
helped the company in creating top of the mind awareness.
 Flipkartcustomers consist of middle class social groups who are comfortable with
online shopping and find it convenient. Majority of the customers are the professional
who are busy with their business/Job & find it convenient to purchase anything online
rather than visiting the physical outlet in order to save time & money.

STP ANALYSIS

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 AMAZON - STP

SEGMENTING:

Type of Segmentation Amazon target customer segment

segmentation criteria
 
  Region More than 100 countries
Geographic Density Urban and rural
  Age 14 and older
Demographic Gender Males & Females
Life-cycle Bachelor Stage young, single people not living at home
stage
Newly Married Couples young, no children

Full Nest I youngest child under six

Full Nest II youngest child six or over

Full Nest III older married couples with dependent children

Empty Nest I older married couples, no children living with

them

Empty Nest II older married couples, retired, no children

living at home

Solitary Survivor I in labour force

Solitary Survivor II retired

Occupation Students, employees and professionals
Behavioural Degree of ‘Hard core loyals’
loyalty
‘Soft core loyals’

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 ‘Switchers’
Benefits Widest range of products
sought
Convenience of online purchasing

Competitive prices
Personality Easygoing, determined and ambitious
User status non-users, potential users, first-time users, regular users, or
ex-users of a product

Psychographic Social class All social classes: lower class, working class, middle class
and upper class
Lifestyle Resigned, Struggler, Mainstreamer, Aspirer, Succeeder,
Explorer.

TARGETING:

The customers who prefer online shopping are the targeted customer base of Amazon.
The customers must also have access to financial tools such as credit cards, debit cards,
PayPal The items offered in sale by Amazon suggest that they target the customers of all
age group, young and old. The online site is designed in such a way so that it becomes
easier even for a person who does not possas proper computer knowledge. It does not aim
at a specific target group because it offers products for all the people from varied walks
of life and choice, The Prime program of Amazon attracted the young customers rather
than the old and the survey depicts that younger and wealthier customers are using their
website for purchasing varied range of products such as apparels.

POSITIONING:

 Amazon has successfully positioned itself as a Glocal (Go global Act local) e-
commerce giant where one can buy anything & get it delivered at any remote
locations. Using the catchphrase #AurDikhao in its most recent campaign in India, it
has further helped them carve a distinct space in the consumer’s mind.

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 Multi-segment positioning. Amazon offers a wide range of products and services,
successfully exploiting more than one segment at the same time. Specifically, the
online retail giant sells almost 120 million products, appealing to the needs and wants
of a wide range of customer segments.

 Adaptive positioning. The online retail giant closely monitors changes in external
marketplace and addresses increasing customer expectations by periodically
repositioning of products and services according to changes in the segment.

 Anticipatory positioning. This refers to positioning to a market segment that has low
turnover with the anticipation that the turnover will increase in the future. Amazon
Web Services (AWS) is a stark example for anticipatory positioning.

MARKETING STRATEGY

FLIPKART – MARKETING STRATEGY

FLIPKART:
Flipkart's business model is much deeper and much expansive that could possibly
elaborate here. However, a few key points –

 Rationalized supply chain - inbound logistics

 Strategic warehousing and distribution capability - operations

 Well aligned fulfillment process - outbound logistics

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All the three processes are extremely well integrated - first by a sound strategy, around
which the organizational structure is built. So they have a strategy, and a complementing
structure to support their strategy. The third critical success factor for Flipkart is the
technology as an enabler. A strong information systems is at the core of the organization,
which drives visibility and end-to-end integration across their supply chain processes
(inbound - operations - outbound) resulting in a well lubricated efficient machine.
Flipkart, must be seen as a logistics company rather than a retail business. Although it
sells products to consumers, and hence is academically classified as a b2c business, the
core of the business lies in its efficient logistics, which allows it to sell products at
attractive prices. However, its competitive advantage is not in its retailing capabilities.
Infact that aspect of the e-commerce business is easily imitable and hence not sustainable.
The sustainable competitive advantage of Flipkart, lies in its logistics and operations
infrastructure - which has a very high barrier to entry: owing to its extensive capital
investment and difficult to replicate strategy-structure-culture mix.
Cons: potential threat of the original replacing the imitated.

It is important to reflect upon the fact that its founder members (the bansal's) have had an
early stint with Amazon and have successfully modeled Flipkart's business on Amazon
strategy. So, it would be fair to say that Flipkart imitated Amazon's model to an extent.
However, owing to governmental regulation and international trade barriers (read retail
fdi restrictions), Amazon has not yet been able to compete with Flipkart on an even keel.
(Amazon operates as a marketplace rather than a retailer). Amazon has all the
infrastructure, culture, and technology enablers in place that Flipkart has - and on a much
larger scale. One other thing that they have is huge financial muscle power - much larger
than what Flipkart has. And the moment when these restriction on fdi in retail are lifted,
Amazon will be a major threat to Flipkart. And all these acquisitions that Flipkart has
been making, is to bulk up and brace up for the competition it faces.

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 MARKETING STRATEGY

AMAZON – MARKETING STRATEGY

AMAZON:

In order to differentiate itself, company acquired many it & e-commerce start-ups like
pets.com, audible.com, junglee.com, imbd.com, zappos.com, woot etc. Which helped
them in providing high value to their customers using existing technology of the acquired
partners at low cost? Amazon has also achieved economies of scale through extensive
product offerings which include electronics, toys and games, apparels, diy and many
more. These offerings help Amazon to keep its prices low thereon passing on the benefits
to the consumers. Amazon’s robust customer centric approach to analyse the customer
buying behavior based upon preferences has helped them to have competitive edge over
their competitors. More than 50% of the consumers are the repeat buyers at Amazon.com.
Furthermore, Amazon is one of the longest players to be present in the online sector and
has a solid hold in European countries and us. This bottom line is helping the company to
expand in new markets.

Brand equity in the marketing strategy of Amazon – from being merely an e-book
provider to emerging as the 2ndlargest e-commerce company in the world, Amazon.com
has steadily increased its spending on advertising and promotion to make its brand
stronger and have a higher brand equity. By april 2015, the brand of Amazon.com was
worth us$ 176 billion. “a brand for a company is like a reputation for a person. You earn
reputation by trying to do hard things. With more than 55% repeat buyers, the numbers
tells everything about the brand. It is among 13 world’s most valuable brand” (forbes
list).

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Competitive analysis in the marketing strategy of Amazon –short listing the
competitors of Amazon depends on what business sector of Amazon is being considered.
Apple would be the largest competitor when considering book or content related delivery
such as books, movies, magazines, and audiobooks. The itunes store will always be a
threat to the Amazon store because of apples devices like the ipad, iphone, and macbook.
When considering web services google would emerge as the largest competitor.

Walmart is the biggest threat to Amazon in us as reports roll in of various attempts to

compete with the large online retailer. Reports of walmart testing a locker system for
consumers where shoppers can order and pay online and pickup at their convenience are
surfacing. Walmart is also still testing same-day delivery in four cities and remains the
fourth largest online retailer. Walmart rakes in about $9 billion in internet sales, which
Amazon more than doubles in a quarter. Amazon does not have the physical structure
base that walmart has to start with.
In developing countries as well as in developed, there are many local portals which give
tough competition to Amazon. For example – snapdeal, Flipkart are some of the
competitors of Amazon. Similarly, groupon, first cry are specialized e-commerce portals
which take away traffic from Amazon. Thus, these local competitors of each country also
react strongly to Amazon’s presence. Market analysis in the marketing strategy of
Amazon- the global e-commerce market is still in the evolving phase. With the adaptation
of technology in the developing economies customers are now becoming more
comfortable with online shopping. Fierce competition from biggies like alibaba, ebay,
start-ups & local ecommerce players like Flipkart, snapdeal is more of resulting into
overall growth of the industry which is good for the industry.

Customer analysis in the marketing strategy of Amazon - Amazon customers

consist of upper & middle class social groups who have inclination towards using e-
commerce portals and are comfortable with online shopping. Majority of the customers

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are professionalsor businessmen who are busy with their business/job & find it
convenient to purchase anything online rather than visiting the physical outlet in order to
save time & money. Furthermore, the customers might also be the ones who are
searching for deals. Due to this, the portal is known to have specific days where they give
massive discounts to their buyers.

CONCLUSION

 Indian e-commerce company Flipkart is in fierce rivalry with Amazon over the
country’s online retail market. Both have unique advantages, but the true test will be
which company can best tailor its offerings to the Indian consumer’s palate. Amazon
has comfortably dominated America’s e-commerce market for years, but India is still
uncertain ground. Another stalwart of Indian e-commerce has posed a serious threat to
Amazon’s dominance: Flipkart, a domestic company and Amazon’s biggest
competitor on the subcontinent, is nearly neck-in-neck for the loyalty of a population
numbering 1.3 billion. They both are e-commerce websites. Flipkart sells in India
only as it is a local player. Amazon operates in all the major countries and is an
international company. Flipkart is trusted the most and Amazon gives better
experience, says Survey. The e-commerce homegrown Indian player Flipkart has

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 trusted Indian brands, but Amazon's user experience is better. Thus, both companies
are trusted brands in India..

 Big companies are fighting in India's divided markets for a bigger share of the pie.
They are aiming to ascertain tremendous growth and to establish properly. Amazon
has a dynamic online platform as it has the biggest players on its side. While Flipkart
is also carrying Walmart's adroitness and clout on its shoulders paving its path of
expansion into bigger business to create a wider footprint. There are no actual
numbers to give clarity right now. Though the difference may be minimal. There is no
doubt that Flipkart stands high in tier II and III cities with its delivery network, while
Amazon has its huge base of Prime subscribers in the metros.

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