BUS 4407 – Strategic Management

University of the People

Introduction to Strategy
Introduction

The strategic planning process of any organization involves identifying key stakeholders,

understanding their importance, and recognizing the unique insights they bring. This essay

explores these aspects in a generic organization, focusing on how different stakeholders

contribute to the strategic planning process and the relative importance of various functional

areas. Additionally, we'll examine the roles of the most influential decision-makers, evaluating

their impact on the strategic planning process.

In the strategic planning process of Amazon, several key stakeholders are involved,

reflecting the company's diverse business interests and global reach. The main stakeholder

groups, as identified by Amazon, are: customers, employees, and communities.

Customers are given the highest priority in Amazon's strategy, being seen as the primary

determinant of its e-commerce business success. Their direct impact on revenue makes their

satisfaction crucial. Amazon addresses their interests, like fair pricing, convenient service, high-

quality products, and online security, through advanced technology and customer-centric

services. Amazon addresses these needs through advanced technologies for secure transactions

and efficient purchase and delivery processes. This alignment with Amazon's mission and vision

underlines the centrality of customers in its business model (Ferguson, 2023).

Employees are valued as significant contributors to organizational performance and are integral

to Amazon's corporate social responsibility policies and programs. They support competitive

advantages and are crucial for the development of ideas that increase business efficiency.

Amazon responds to these needs with leadership development programs and competitive
compensation, particularly for IT personnel involved in technology development and

maintenance. Amazon caters to their needs for competitive compensation and career

development, recognizing that satisfied employees can enhance the company's innovation and

growth potential (Ferguson, 2023)

Communities are important stakeholders as they influence consumer perceptions of Amazon's

goods and services. Amazon's corporate social responsibility program for communities addresses

needs in education, healthcare, and environmental conservation. Through charitable

contributions and donations, Amazon engages with community interests, reflecting the

company's recognition of its broader social and ecological impact (Ferguson, 2023).

These stakeholder groups play a pivotal role in Amazon's strategic planning process, influencing

the company's decisions and policies in various ways.

The unique insights offered by different stakeholder groups in Amazon's strategic planning

are: (Ferguson, 2023)

Customers provide direct feedback on Amazon's products and services, influencing business

decisions. Insights from customers are crucial for Amazon, as they directly affect the company's

revenues. Their needs for fair pricing, convenience, high-quality products, and online security

guide Amazon's service and technology strategies. Understanding customer preferences and

behaviors helps Amazon to maintain its competitive edge in the e-commerce market.

As significant determinants of organizational performance, employees offer insights into

Amazon's operational efficiency and innovation potential. Their perspectives can lead to the

development of new ideas and strategies that increase business efficiency. Amazon's focus on
competitive compensation and career development for employees, especially in leadership and

management positions, is influenced by the insights gained from this stakeholder group.

Communities provide a broader perspective on Amazon's social and environmental impact.

Community feedback influences Amazon's corporate social responsibility initiatives, including

education, healthcare, and environmental conservation programs. These insights reflect social

and ecological trends and help Amazon in aligning its corporate citizenship efforts with the

broader societal needs, thereby shaping its brand perception and customer loyalty.

Each of these stakeholder groups offers unique insights that are vital for Amazon's strategic

planning, ensuring the company stays attuned to the diverse needs and expectations of its global

customer base, workforce, and the communities it operates in.

In Amazon's strategic planning process, several functional areas are crucial, while others may be

relatively less emphasized based on the company's current objectives and market dynamics. It's

important to note that all areas contribute to the company's success, but their relative importance

can vary over time.

Important Functional Areas: (Ferguson, 2023)

 Design of Goods and Services: This involves the design of organizational output, with a

focus on technology to enhance online retail services and e-commerce operations

efficiency.

 Quality Management: Continuous improvement efforts in e-commerce business are vital,

supported by Amazon's organizational culture that encourages innovative idea creation.

  Process and Capacity Design: Optimizing production processes and capacity, where

Amazon applies automation to streamline business processes.

 Location Strategy: Strategic location of warehouses and fulfillment centers is critical to

ensure optimal proximity to the largest possible number of customers.

 Supply Chain Management: Streamlining the supply chain to support organizational

objectives, using automation and IT assets.

 Inventory Management: Focusing on maintaining optimal inventory ordering and

holding, using just-in-time inventory management in some areas.

Relatively Less Emphasized Areas:

The following areas might be relatively less emphasized in certain strategic contexts:

 Job Design and Human Resources: Although crucial, this area might receive less

immediate strategic focus compared to areas directly impacting customer experience and

operational efficiency.

 Scheduling: While important, this area might be more operational in nature and thus less

strategically emphasized compared to areas like design of goods and services or supply

chain management.

 Maintenance: Again, while essential for operational stability, maintenance might be less

in the strategic spotlight compared to areas driving market growth and customer

satisfaction.

These assessments are based on the strategic focus areas as identified in various analyses. It's

important to recognize that in a dynamic and complex organization like Amazon, the emphasis
on different functional areas can shift over time in response to market conditions, technological

advancements, and strategic priorities.

In Amazon's strategic planning process, the most important and influential decision-makers

include: Jeff Bezos (Founder and Executive Chairman), Leadership Teams, Team Leads, and

Rick Dalzell (Former CIO). The relative importance of these decision-makers and their effect on

the planning process can be evaluated as follows.), Leadership Teams, Team Leads, and Rick

Dalzell (Former CIO). The relative importance of these decision-makers and their effect on the

planning process can be evaluated as follows.

Bezos has been central to Amazon's strategic direction, focusing on customer obsession and

enabling the company to treat each customer individually. His approach to decision-making is

highly influential, focusing on making better decisions quickly (Charan, n.d.). His role has been

extremely influential due to his focus on customer-centric strategies and innovative approaches

to decision-making, such as categorizing decisions into two types: irreversible (Type 1) and

reversible (Type 2), and emphasizing swift decision-making (Charan, n.d.).

The leaders and teams at Amazon are incentivized to think big and support cross-divisional

goals, playing a crucial role in the company's annual planning process. This process, known as

OP-1 and OP-2 (Operating Plan), allows the organization to divide its resources while

maintaining autonomy and flexibility across its divisions (Nobe Academy, 2020). These teams

ensure that strategic decisions align with the company's broader goals and support cross-

divisional collaboration. They play a critical role in the resource allocation process and in

shaping the company's strategic direction (Nobe Academy, 2020).

After a month of preparation, each team submits their plan. These plans are collated at every

organizational layer, ultimately influencing the key decisions made by Jeff Bezos and senior

executives. Their contributions are vital in providing ground-level insights and operational

expertise, which are crucial for informed decision-making at the higher levels of the organization

(Nobe Academy, 2020).

Dalzell, as Bezos’ right-hand man, contributed significantly to the decision-making process by

focusing on finding the best truth and ensuring decisions are made based on accurate,

comprehensive data. As a key figure in Amazon's early years, his focus on data integrity and

accuracy in decision-making set a precedent for the company's current data-driven approach,

impacting long-term strategic planning and execution (Charan, n.d.)

These decision-makers contribute uniquely to Amazon's strategic planning process, with each

playing a role in shaping the company's direction and ensuring its continued growth and

innovation.

In conclusion, the strategic planning process of an organization is shaped by a diverse array of

stakeholders, each bringing unique insights and values. The prioritization of different functional

areas reflects the organization's specific goals and market context. The roles of key decision-

makers, from top executives to departmental leaders, are crucial in steering the organization's

strategic direction. Understanding these dynamics is essential for appreciating how strategic

planning is tailored to meet the organization's needs, fostering growth and adaptation in a

competitive environment.
Reference

Charan, R. (n.d.). How Amazon Does It: Decision Making Inside The World’s Most Daring

Digital Company. Chief Executive. https://chiefexecutive.net/how-amazon-does-it-decision-

making-inside-the-worlds-most-daring-digital-company/

Ferguson, E. (2023, June 25). Amazon Stakeholders & Corporate Social Responsibility. Panmore

Institute. https://panmore.com/amazon-com-inc-stakeholders-corporate-social-responsibility-

analysis

Ferguson, E. (2023, June 25). Amazon Operations Management: 10 Decisions, Productivity.

Panmore Institute. https://panmore.com/amazon-com-inc-operations-management-10-decisions-

areas-productivity. Panmore Institute. https://panmore.com/amazon-com-inc-operations-

management-10-decisions-areas-productivity

Nobe Academy. (2020). What We Can Learn From Amazon’s Planning Process.

https://academy.nobl.io/10x-thinking-and-cross-functional-goals-what-we-can-learn-from-

amazons-planning-process/. https://academy.nobl.io/10x-thinking-and-cross-functional-goals-

what-we-can-learn-from-amazons-planning-process/