Organizational Change Strategy

Select an organization – either a corporation or a non-profit – that you will use for all components of this assignment.
The first component is to develop a competitive strategy for the company. This plan should expand on the company’s current strategy if there is one. If the company does not have a visible plan, you will create a competitive strategy for the company.
determine your approach for expansion into a global market. Be very specific with respect to your analysis and ultimate decision regarding the globalization of your organization (i.e., the type of market, rationale for expanding or not expanding, approach, etc.).
Include an analysis of your organization’s current operations and the guiding philosophies on which it operates. In addition, include predictions about the near future of your organization and how it will respond to those predictions should they become reality. Also include ways your organization will measure where it stands in relation to its competitive rivals.
Describe the ethical standards and corporate social responsibility areas for your selected organization. Identify key areas of the business that impact its social and ethical responsibilities. Analyze the ways the organization has handled these responsibilities in the past and outline any needs that may should be addressed. Include proposed standards that will help your company to be more ethically and socially responsible. Focus on both internal and external factors.
outline the action steps your selected organization must take to execute its strategy. How will the organization ensure that effective staffing/leadership is supportive of the strategy execution process? Be clear in defining the steps and provide measurable deliverables for the action steps you have provided.
Approach to the assignment:
1. In addition to drawing on your readings from this course, you will be expected to conduct additional research to complete this assignment.
2. The section title must be centered and bold. Sub-sections, based on your content coverage, must be left aligned and in bold.

ANSWER

Organizational Change Strategy

Competitive Strategy for Amazon

There are various strategies that Amazon uses to gain a competitive edge over its competitors in the market. Cost leadership is one of the strategies used by Amazon for its competitiveness. Minimization of operational costs is the main goal of this competitive strategy. It uses networking technologies and operational efficiency, which results in reduced costs. The company benefits from process automation used in most operational processes (Rodrigues, 2020). In return, they help the company cuts costs. This cut in costs enables Amazon to sell its products at a lower price than its competitors.  The company emphasizes the reduction of costs without the reduction of quality. This strategy enables the company to gain a large market share through underpricing its competitors.

Another strategy that Amazon uses to gain a competitive advantage is through intensive growth. It achieves intensive growth through market development, market penetration, product development, and diversification. All these strategies enable the company to enter new markets seamlessly and efficiently. It is constantly striving to enter new niches and segments while looking for solutions faced by the company.

Besides, Amazon strives to focus on the customer. Customer focus is the foundation of Amazon’s business strategy. While it focuses on making a profit, Amazon is also after customer satisfaction in many ways. For example, it puts a chair on each board meeting to represent the client, a reminder that the customers matter to the business and need to innovate on their behalf. It ensures that customers are satisfied by providing high-quality products (Kharub et al., 2019). Amazon also empowers its customers by helping them make purchase decisions and offering feedback regarding the various products on the website.

How to Improve Competitive Edge

However, there are some areas in which the company can improve to boost its competitive advantage. One way in which Amazon can improve is by identifying core competencies and refocus. It should determine whether it wants to diversify or integrate and focus its full focus on it. Amazon can also expand globally. While it already has a presence in the international arena, Amazon can expand into other countries with the potential to grow. Global expansion will increase brand recognition and increase its sales and profits. It will also help the firm in its growth strategy.

Moreover, Amazon should improve its brick-and-mortar presence. While e-commerce has become popular, physical stores are also as important, and a lack of one by Amazon poses a barrier to rapid expansion to the non-online market. Some customers prefer seeing and touching products before a purchase, and the development of physical stores may be the best solution to improve the company’s competitive advantage in the industry. It may have to redefine its strategies and policies and diversify to the non-online market by taking advantage of its brand presence in the market. Some of its major competitors, such as Wal-Mart, have both online and non-online presence, Amazon should strive to outdo them by investing in both platforms.

Approach into Global Market

Amazon currently operates in various locations and fulfillment centers across 180 countries in the world. It has continued to expand gradually to foreign countries over the years. While its biggest market is its native market, the U.S.A, Amazon has continued to expand to other regions. However, it should continue expanding to other regions. With the continued globalization and advance in technology, Amazon should expand its global marketing strategies to other regions.

Advantages of Global Expansion  

There are multiple benefits that Amazon will reap from its expansion into new regions. According to RBC Capital Markets’ information, there are five countries, namely Brazil, Mexico, Turkey, Australia, and India, which could account for more than $ 25 billion by 2023, based on their retail growth (Nicholls et al., 2017). The five countries, according to analysts, present Amazon with a great underpenetrated market opportunity.  It offers the company the opportunity to generate more revenues than its native country. Thereby, Amazon should expand to these countries and other regions.

Moreover, with the global crisis brought about by the COVID-19, there will be more shift to e-commerce, even in countries with low income.  Amazon should offer its platform to sellers from these countries. Consequently, it will increase its sales revenues, and brand recognition is likely to increase.

Global Market Strategy

There are several ways in which Amazon can enter the global market.  It has always used a simple strategy, which entails entering new markets with the potential to grow quickly economically. It uses partners to market its products in some countries. However, in recent years, it has made efforts to enter the market on its own. The best way for Amazon to expand to other markets will be through licensing, which allows another company in a particular country to use Amazon’s property. Licensing will be suitable for Amazon as it requires little investment and offers high returns (Wu & Gereffi, 2018).  Besides, licensing is less risky as the licensee takes care of all the marketing and manufacturing costs. Therefore, the entry to the market will be inexpensive to Amazon and is less likely to face any challenges in its reception. Any political or cultural risk is minimized since the licensee is often 100% locally owned, and it already understands the market and the practices. Licensing also paves the way for future investments in that particular market and helps the company acquire new skills and resources in the target country. This entry strategy also offers Amazon an opportunity to enter markets that had been closed by trade restrictions.

Amazons should also develop an international expansion strategy. In its expansion, the company should conduct adequate market research on the country that it plans to enter. Conducting market research enables the firm to adapt to the particular market in terms of hiring, operations, and policies and is more likely to avoid pitfalls that it has faced when entering other markets in the past. The mode of entry that the company has picked should match the company’s business model. Processes which work in the North American market may not work in other countries as the cultures and practice may be entirely different. Thus, Amazon should align its business model to the foreign market’s culture and practices.

Current Operations and Guiding Philosophies

Amazon has various core activities include retailing electronics, e-commerce, artificial intelligence, and cloud computing. It operates in the informational technology and retailing industry (Amazon, 2019). It began as an online marketplace for books, but it has expanded to sell other products such as apparel, video games, food, toys, and other products over the years.

Amazon has several guiding philosophies. The major guiding philosophy is people empowerment. From the developers to the content creators, Amazon aims to empower people and enable them to have lucrative ways of earning income. It also focuses on empowering its customers by giving them a flexible way to access cheap and high-quality products. Another philosophy that guides Amazon’s operations is the ’empty chair,’ which represents the customer and that their needs and preferences are taken into consideration. This gesture implies that Amazon is keen on meeting the customers’ needs in every way.

Prediction about the Future and How It Will Respond to the Predictions

The prediction in the retail market and the technology industry is that there will be many companies joining e-commerce. Amazon considers itself as the leading e-commerce company. With the advancing technology and many businesses adopting online selling, the company’s future seems bleak. Besides, with the COVID-19 pandemic, there might be a permanent switch to online shopping. The company may lose to its competitors, who may come up with better online strategies. To stay on top of the market, the company will have to identify newer and more creative ways to keep its existing customers loyal and increase its customer base.  It will have to improve its marketing strategies to capture and retain the interests of the consumer (Faherty et al., 2017). Moreover, Amazon may have to improve the quality of its products to meet the consumer’s changing needs and preferences and have a more competitive edge in the industry. More market research needs to be conducted to understand these changing needs and what the competitors are doing; this way, it can look ahead and develop better strategies.

Another prediction regarding the future of Amazon is that consumers will change the way they consume their content. Accordingly, Amazon will need to adopt a good targeting mentality.

How to Assess Competitive Advantage

There are several ways in which the company can assess its competitive edge in the industry.  First, it will entail identifying the current and potential competition by looking at the market from the perspective of the customer (Rodrigues, 2020).  Once the competitors have been identified and grouped based on their various competitive strategies, the areas where the company is most vulnerable are analyzed. This analysis can be done by identifying the mistakes, strengths, and weaknesses of the competitors; these strengths and weaknesses can be determined based on the assets and skills that are key to competing in the industry. The performance of a firm within an industry is directly proportional to the possession of key assets and skills that they have. Thereby, the analysis of the key competitors in the industry will reveal the reason behind their good performance.

A marketing strategy will have to be created through the competitor analysis to generate the asset or skills that the competitors do not have, which gives the company a competitive advantage. Since the competitive advantages stem from the key assets and skills, they need to be noted down, and a competitive strength grid developed.  This scale lists all the competitors based on their assets and skills and how Amazon fits in this scale. Once the company’s key assets and skills, which are needed to succeed, have been identified, the distinct competitive advantage should be defined and communicated in a strategic form.

Ethical Standards and Corporate Social Responsibility

Amazon encourages and upholds strict adherence to local, state, national, and international laws through various guidelines stated in their Code of Ethics.  All the employees who may have a conflict of interest are directed to report their issues to the Legal Department. Additionally, Amazon strives to promote a safe and healthy workplace free of harassment and promotes the freedom of the employees to perform their tasks without any hindrance. It strongly discourages behaviors that are not in the best interests of Amazon or its clients. Moreover, Amazon strives to create higher living standards through low prices and engaging in corporate social responsibility.

Key areas of the Business that Impact CSR

The main area of Amazon that influences corporate social responsibility is employees, shareholders, community, customers, and the governments. In making any corporate social responsibility, Amazon puts its various stakeholders into consideration. When it manages to meet all or most of its stakeholders’ obligations, it is considered socially responsible. Accordingly, Amazon strives to be responsible to its various stakeholders, namely, employees, customers, society, and environmental conservation. In the past, Amazon maintains corporate social responsibility to various stakeholders in multiple ways. To communities, Amazon offers support programs including education, healthcare, and environmental conservation. These interests are mainly addressed through Amazon’s support arm, Amazon Smile (Gürlek et al., 2017).  A percentage of sales revenue from the company is donated to chosen charitable firms suggested by customers, enabling Amazon to satisfy the communities’ interests. While the interests of the customers and employers are considered, the company has not fully addressed the needs of the investors and the government.

Amazon has been accused of tax avoidance. Hence, it needs to improve and ensure that it maximizes the investors’ wealth while paying taxes to avoid legal issues.  It must also address the interest of governments concerning consumer protection and international retailing. There are also issues of poor working conditions in the company reported by current and former employees. Workers at Breinigsville, Pennsylvania Warehouse, were reportedly working in 38 degrees temperatures, which resulted in dehydration and discomfort for employees (Gürlek et al., 2017).  Amazon should strive to ensure that such cases never recur and that employees work in a safe environment.

There are also other areas in which Amazon can improve in its corporate social initiatives. Amazon has been accused of selling counterfeit and unsafe products to its consumers. There are some business practices at Amazon that seem to encourage counterfeiting. The practice encourages the use of commingled inventory, where goods from suppliers are mixed with that of producers and those of other sellers, and pass it as if it were the same product.  There are also cases where goods on Amazon have been reported to be of low quality and unsafe for human use.  To achieve its mission and guiding principle, which focuses on meeting the needs of consumers, Amazon should strive to ensure that its suppliers offer high quality and standard goods to the consumers. Amazon should design a procedure that checks the quality of products being sold on their site.

Strategy Execution

Steps in Strategic Execution

There are various steps that need to be taken by the company to execute the strategic plans it has.

Strategic Planning

The first step that can be taken is strategic planning. The first step to execute a strategic plan successfully is through strategic planning. Under strategic planning, the company should identify what needs to be changed or achieved. The steps that are needed to achieve the strategic plan should also be stated under this first step. For example, suppose it to solve the ethical and corporate social issues that the company needs to improve on. In that case, the weak areas should first be identified, and the necessary solution for the issues should be determined (Direction, 2019). The way that the strategy reporting will be structure must also be identified, and the framework to help keep the company focused on the strategy should be chosen.

Communication

Once the plan has been created, the organization should be engaged. The communication process should follow the usual platforms or ways Amazon uses to pass information on other issues. Communication helps prepare staff for the impending changes that need implementation and allows them to offer feedback on the same.

Goal Setting

The next step entails the setting of goals for the plans that need to be executed. The goals need to be tangible. If they are expansion goals, the company should state a realistic number of countries that it needs to expand to. For example, it can decide to expand to five countries in a particular year. The creation of goals helps keep the company on track and meet its objectives.

Tracking and Reporting

There are two elements of efficient and effective tracking and reporting of a strategic plan. First, Amazon needs to ensure that there are regular updates on the progress of the project by everyone involved. The second step entails assessing the updates to ensure that they meet goals and targets.

Performance Management

The process management entails appraising how well the strategic plan has been executed and whether it meets the goals. The results should be compared to the goals to determine if the project has been well implemented.

How Amazon Enhances Effective Leadership for Effective Strategy Execution

Amazon can ensure that the leadership or employees support its strategic execution by offering rewards and punishments. The leaders can be given targets, for which they will be rewarded if they achieve them. Those who do not achieve these goals regarding the strategic plan execution can be punished or demoted (Levenson, 2018). These incentives will motivate the leaders and employees towards the achievement of the strategic goals.

Amazon can also ensure that leadership supports the smooth execution of strategies by ensuring that the strategic plans align with the organizational mission, vision, and values. This way, leaders and employees will strive to meet the targets they aim to meet the organizational mission and vision.

Moreover, Amazon can ensure that leaders and employees support the smooth execution of strategies through the provision of adequate resources. When all the necessary resources to perform a task are provided, the employees and the supervisors are more motivated to meet the goals of the organization.

Besides, communication help leaders and employees meet any goals of an organization. Whether strategic goals or any other goals are needed to be achieved, communication helps in passing information. This information can be instrumental in offering directions on how to perform the tasks, the timelines, and the rewards involved (Levenson, 2018). Communication also allows employees their feedback regarding the strategic plan and how it can be implemented more effectively. Besides, it enables them to raise any issue that may arise during the strategy execution process.

References

Direction, S. (2019). Execution. Execution. Execution: Seven steps to getting things done.

Faherty, E., Huang, K., & Land, R. (2017). The Amazon Monopoly: Is Amazon’s Private Label Business the Tipping Point?.  https://ideas.repec.org/p/pra/mprapa/83672.html

Finance, C. Amazon. com, Inc. EPS (GAAP), 6(47), 12-37. https://www.sec.gov/Archives/edgar/data/1018724/000101872421000004/amzn-20201231.htm

Gürlek, M., Düzgün, E., & Uygur, S. M. (2017). How does corporate social responsibility create customer loyalty? The role of corporate image. Social Responsibility Journal. https://www.emerald.com/insight/content/doi/10.1108/SRJ-10-2016-0177/full/html

Kharub, M., Mor, R. S., & Sharma, R. (2019). The relationship between cost leadership competitive strategy and firm performance. Journal of Manufacturing Technology Management.

Levenson, A. (2018). Using workforce analytics to improve strategy execution. Human Resource Management, 57(3), 685-700.

Nicholls, T., Shabbir, N., & Nielsen, R. K. (2017). The global expansion of digital-born news media.

Rodrigues, M. M. M. L. A. (2020). Competitive advantage in the age of digital platforms: the case of Amazon. com (Doctoral dissertation).

Wu, X., & Gereffi, G. (2018). Amazon and Alibaba: Internet governance, business models, and internationalization strategies. In International business in the information and digital age. Emerald Publishing Limited.

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