Student ID Number(s) : 2379079, 2340684

Programme : MBA: Business Administration (FT)

Module : 34577 - Developing Strategy

Name of Tutor : Roshan Boojihawon

Assignment Title : Group 3 Presentation- Case-based: Amazon.com’ s resilience post-COVID

Date and : 4th February, 2022

Time of Submission

Actual Word Count :

Extension: NO Extension Due Date: NA

AMAZON’S
RESILIENCE
POST COVID
“Earth’s biggest selection and to be Earth’s
most customer-centric company”

—AMAZON’S MISSION

3
 TABLE OF CONTENTS
ANSWER TO
01 COMPANY OVERVIEW 02 QUESTION 1
Brief introduction about Amazon and its The effects of COVID and other macro-
generic strategy. environmental factors in shaping the
current online retailing industry and the
likely impact of these factors upon the
future attractiveness of this industry

ANSWER TO ANSWER TO
03 QUESTION 2 04 QUESTION 3
Examination and discussion of how
The strategic opportunities, challenges, Amazon.com should develop its strategy
and key success factors facing post-COVID by applying relevant
Amazon.com post-COVID concepts and frameworks from the
‘Developing Strategy’ module

CONCLUSION &
05 RECOMMENDATION 4
 PART 01
COMPANY
OVERVIEW
 COMPANY
OVERVIEW
• Amazon is an American multinational
company with a focus on e-commerce, cloud
computing, artificial intelligence and online
streaming.

• Founded by Jeff Bezos with its headquarter in

Seattle (Washington) in 1994

• Referred as “World’s Most Valuable Brand”

and is one of the Big Five American Tech
Giants and the world’s largest online retailer

• One of the world’s first online retail platforms

and a pioneer in the section

6
 COMPANY’S
STRATEGY
Business-Level Strategy

• Amazon focuses on a “cost-leadership

strategy” as it provides its consumers with a
vast selection of high-quality products at lower
prices and fast delivery [1]

Corporate-Level Strategy

• Amazon's general corporate strategy is

“concentric diversification”, which is based on
leveraging technological capabilities for
business success.

7
 PART 02
ANSWER TO
QUESTION 1
 MACRO-ENVIRONMENT ANALYSIS
(PESTLE)
POLITICAL TECHNOLOGICAL
• • Advancement in AI, and robotics
Trade regulations between countries
• Government policies and regulations for warehouse management
• Thermal scanning for safety
on online retail
protocols
ECONOMICAL
• Decrease in consumer disposable P T SOCIAL
income • Increase in online shopping
• Rise in e-commerce; UBS predicts • Change in consumer behaviour towards
online retail to make up a quarter of quick-commerce
total retail sales E PESTLE S • 66% shoppers and 73% Millenials are
• 15000 offline retail stores closed willing to spend more on sustainability
during the pandemic; UBS predicts • Inclination of customers towards niche
further closure of 100,000 brick and e-commerce vendors (vegan cosmetics,
mortar outlets in next 5 years CBD for pets, etc)
L E
LEGAL
• The law protected employees right to ENVIRONMENTAL
protest • Usage of electric vehicles during
• Criticized for allegedly firing deliveries
whistleblowers • Compliance with SDGs
9
 MICRO-ENVIRONMENT ANALYSIS (PORTER’S 5
FORCES)
POWER OF SUPPLIER: LOW
• Third-party sellers are hugely
dependent on Amazon for the
majority of their business.
• Amazon bought 75% stake of the
French delivery company and
introduced Amazon Zoox, drones,
etc to create its own robust
distribution system, which
reduces the dependence on
suppliers.
POWER OF CUSTOMERS: COMPETITIVE RIVALRY:
MEDIUM MEDIUM
• Low switching costs increase
• Offline retailers have decreased
customer power but customers
with prime membership could drastically during covid.
prefer Amazon due to quick service
• Competitors are present (like
option.
Flipkart in India, Alibaba in China)
• FBA and excellent customer service but Amazon offers a wide range
of products and speedy delivery
of Amazon reduces the customer
bargaining power. Low switching in comparison to other retailers.
costs increase customer power but
• Amazon ecosystem, which
customers with prime membership
could prefer Amazon due to the includes services like prime
quick service option. FBA and video, gives an edge over rivals.
excellent customer service of Amazon’s e-commerce prowess
Amazon reduces the customer and cloud computing arm help
bargaining power. capture the majority of the
10
market share.
MICRO-ENVIRONMENT ANALYSIS (PORTER’S 5
FORCES)

THREAT OF NEW ENTRANTS: MEDIUM THREAT OF SUBSTITUTES: MEDIUM

• Niche retailers can offer customized and • Amazon doesn’t sell unique products and
unique products which Amazon couldn’t. is lagging behind some retailers in giving
Huge number of niche retailers enriched shopping experience through
collectively could pose a threat. innovative technology such as VR & IR
which are crucial for premium products
• But new companies cannot challenge
Amazon’s cost leadership as investments
in distribution, warehouses, web
platforms, economies of scale and
logistics is capital intensive.

Cont. 11
 IMPACT ON ONLINE RETAIL
INDUSTRY
• The extended duration of global
lockdowns changed the shopping
habits of the consumers.

• According to our “Peak to Recovery”

survey, over half (53%) of consumers
globally discovered at least one form of
online shopping in the past few months
that they plan to continue. [2]
Fig 1: Consumers globally discovered at least one form of online shopping in the past
• The pandemic brought a definite shift few months that they plan to continue
Source: Criteo’s Peak to Recovery Survey, Global (May 2020)
towards online retail as brick and
mortar retail ceased to operate.

• Sale of non-essential goods (jewelry,

electronics, etc.) was restricted which
affected the third-party sellers dealing
12
in such goods.
 IMPACT ON ONLINE RETAIL
INDUSTRY
• Surge in demand strained the existing (pre-covid) infrastructure of the online retail
industry.

• Disruption in supply chain due to shortage of workforce to meet the inflated

demand.

• Increased demand (order) leads to increased shipments which have environmental

impact due to increased carbon footprint.

Cont. 13
FUTURE OF ONLINE RETAIL
INDUSTRY
POST COVID
• The pandemic and extended global lockdowns have brought technological
advancements in the retail segment.

• Digital transformation has opened doors for the growth of niche e-commerce
vendors.

• Supervision and regulations on e-commerce may prove beneficial for small and
medium-sized businesses to enter the online retail business.

• Online retail industry is likely to experience an increase in competition post covid.

14
 PART 03
ANSWER TO
QUESTION 2
 SWOT ANALYSIS

S
STRENGTHS
W
WEAKNESSES
O
OPPORTUNITIES
T
THREATS

• Rapid technological • Low-profit margin • Surge in demands and • Supply chain disruption.
innovation. business models. sales. • Growing competition.
• Strong brand image and • Labor conflict. • Amazon fresh and whole • Stakeholder management
market presence. • Poor working conditions foods markets can be is difficult especially
• Superior supply chain scaled.
for employees. workers.
network. • Vertical integration-
• Supply chain disruption led • Increasing government
• Cost leadership. increase private label
to reduction in delivery regulations.
• Large number of third- fulfillment during products.
• Data Security
party sellers. pandemic • Leverage technology by
• Amazon ecosystem which using self-driving vehicles
includes prime and robotics for deliveries
membership, video and reduce driver costs.
16
streaming, FBA, etc.
KEY SUCCESS FACTORS
POST COVID
• Successful management of human resources to meet the surge in demand.

• Introduction of new markets for suppliers

• Inclination towards sustainability in the supply chain and other operational processes can
improve the brand image.

• Further investments in the adoption of technologies will lead to an increase in the

efficiency of its operations.

• Motivation of employees to align their goals and objectives with the purpose of the
company; Incorporation of CSR practices.

• Continuous optimization of online platforms to enhance the customer shopping

experience.
17
 PART 04
ANSWER TO
QUESTION 3
 HOW AMAZON RESPONDED TO THE DYNAMIC ENVIRONMENT
DURING COVID?
Progressive
Performance Adaptive
Optimization Innovation
• Significant modification of 150 operational processes • Increased testing capacity by shifting software
• Evaluated Vendor Capacity during pandemic to predict engineers, research specialists, procurement
delays specialists and program managers
• Hired and trained 80000 new workers • Investments in AI & Robotics to enhance distribution
• Expanded e-grocery delivery by 60% network
• Introduced time slot system for shopping • Early adopters of new technologies in the market

Failed: Delayed deliveries and increased operating cost Failed: Just-in-Time approach failed

Consistency
Preventive Control
• Hired seasonal employees to handle extra work load
• Safety precautions and measures were implemented
• Built testing labs to test workers
• Highly automated warehouses Adjusted store hours
for sanitizing
• Fair pricing policies were introduced to tackle price
gouging of third party sellers
Failed: Inefficient stakeholder management, Strained
relations with third-party suppliers, insufficient safety
protocols.
Defensive
Flexibility
Mindful Action
• Introduced amazon relief fund to support employees
• Increased minimum wages across all countries
• Priority delivery slots for senior citizens
• First hour reserved for elderly and disabled
• Launched non-profit stores for supplying essentials
for front line workers
• Reshuffled logistics for delivering essentials on
priority
Failed: Fired whistleblowers 19
ORGANIZATIONAL RESILIENCE OF AMAZON DURING
COVID
Progressive
Performance Optimization
Adaptive
Innovation

Consistency Flexibility

Preventive
Control
Mindful Action
Defensive
 Amazon positively grapples with Covid-19 but a delay to respond
public concerns
Covid-19 has been
Social distancing and characterized as a pandemic
lockdowns
People remain indoors
A surge in customer demand
for essentials 
Only essential business Workers started protesting and
allowed a strike
Supply chain disruptions Covid-19 positive cases were
confirmed at six facilities
Public concerns
Environmental changes
about stringent working
conditions
Employee attendance
had fallen
Amazon sent out survey to Prioritize efficiency and profits
understand vendor over the safety and well-being
capacity and managed of its workforce
sellers in the platform Set up Amazon Relief Fund
Hired and trained 80,000 new
workers
Implemented
safety protocols, process
changes in operations network
s, and daily audits to
ensure compliance  and overtime pay
Phase 1 Phase 2-Feb
Incremental Strategic drift
change
Six distribution centers forced
to shut down in France
Employees in France quit jobs
No enough protection
to warehouses workers
Safety responses inefficient
Implemented a Waiting-list
policy  Extra attention and
Extended its support
to vulnerable communities
Started a non-profit stores
Hired 175,000 people  Fund
Temporarily raised wages
Phase 3-Mar
Flux
Backlash from several
quarters Environmental
Criticisms on
Amazon's indifferent attitude
change
towards workforce safety
Amazon's
Installed thermal cameras, strategic
purchase face masks reflections
Conduct mandatory
cleanliness protocols 
compensation to infected
workers
Donated Covid-19 Response
Increased minimum wage
Build incremental Covid-19
testing capacity Time
Expand its Phase 4
grocery delivery capacity 
Transformational
change
PROPOSED ORGANIZATIONAL RESILIENCE OF AMAZON
POST COVID
Progressive
Performance Optimization
Adaptive
Innovation

Consistency Flexibility

Preventive
Control
Mindful Action
Defensive
STRATEGIC RECOMMENDATIONS TO
IMPROVE RESILIENCE POST COVID
• Reputational Resilience: Amazon must focus on its stakeholders especially employees to reduce the
risk of legislative uncertainty, and aligns its values with its actions

• Technological Resilience: Develop and strengthen cyber-security infrastructure to protect

customers, suppliers, and organizational data

• Operational Resilience: Diversify production capacity and individual suppliers and distributors so that

disruption in any part of the globe doesn't affect the business. The Just-in-Time approach can be
replaced agency model during disruptions.

• Business Model Resilience: Diversify into new segments or niche products to build a
diversified customer base.

• Invest in in-house innovation so that the company can anticipate and respond to market changes
with creative and innovative solutions.

• Improve the integration of technologies such as AI, Machine Learning with their existing RACE

Framework of the company to acquire and retain more customers. 
APPENDIX
 VRIO ANALYSIS TO DETERMINE
STRENGTHS & WEAKNESSES OF
AMAZON
Resources & Capabilities V R I​ O​ Competitive advantage

Can enhance competitive advantage

Growing brick-and-mortar presence ✓ ✓

Sustainable advantage
Growing diversity of online services ✓

Can lead to a sustainable advantage

Increasing portfolio of private label products       ✓

Strong Competitive Advantage
Strategic warehouses and distribution hub ✓ ✓

Strong Competitive Advantage
High global brand equity & equity ✓ ✓

Strong Competitive Advantage
High market penetration & capitalization ✓ ✓

Can be a sustainable advantage

Market expansion ✓ ✓ ✓ ✓

Not unique in this changing market

Artificial intelligence capabilities ✓ ✓ ✓ ✓

Industry expertise ✓ ✓ ✓ ✓ Temporary competitive advantage

 VALUE CHAIN TO DETERMINE
STRENGTHS & WEAKNESSES OF
AMAZON
Primary activities​ Inbound logistics​ Operations​ Outbound logistics​ Market and Sales​ Service​

​ • I​nvested tens of • F
​ BA handled back-end • S
​ hips more than five • M
​ embership offers • F
​ BA-third part seller
billions of dollars operations billion products globally free two-day shipping services 
in building and • Fulfilment network in more than 30 • No minimum purchase • AWS- on-demand
developing its coupled with its logistics countries during holidays cloud computing,
fulfillment ability led to Amazon • Eliminated the Prime video- video
network developing a massive e- commission to source streaming,
commerce masks to sell on subscription
infrastructure to handle Amazon services, advertising
the demand from • Donated US$100 services
consumers million to Feeding • Physical stores
America’s Covid-19
Response Fund.
 VALUE CHAIN OF AMAZON – cont.
Support activities​ Firm Infrastructur ​ mazon Relief Fund to
A ​ ommitted €21 million
C ​ ​
e​ support stakeholders to relief organizations

Human Resource  ​ ired 175,000 workers to

h ​ mployed 750,000
E ​ iring 120,000 seasonal
H ​ emporarily raised wages
T
Management​ cater to the increasing employees worldwide employees to handle extra and overtime
demand from consumers, workloads during the holidays premiums, allowed
hire and train 80,000 new employees to take unpaid
workers within a few weeks time off at their discretion
of the outbreak

Technology  ​ cquisition to augment the

A I​nvestments in logistics ​ emperature
T ​ dedicated team working to
A
Development​ person-to-goods workflow in included electric- screening, installed thermal build incremental Covid-19
the retailer’s warehouses powered delivery vans, cameras testing capacity
sidewalk robots,
drones, etc.

Procurement​ I​t purchased 100 million face masks for its employees ​ pend around US$4 billion on Covid-19 related costs such as
S
and 1,000 thermal cameras and 31,000 thermometers increasing PPEs for workers and more intense cleaning of
to conduct mandatory daily temperature checks for the warehouses, and nearly US$300 million on developing internal
employees and support staff Covid-19 testing capabilities. This was in addition to the US$700
​ million it had incurred globally in April 2020 in extra wages for its
hourly warehouse workforce and delivery contractors.
​