Amazon is the largest e-commerce company in the world. The main areas of operation for the company include e-commerce, cloud computing, artificial intelligence, and digital streaming. Based in Seattle, Washington, Amazon is one of the "big five" tech giants alongside Apple, Facebook, Google, and Microsoft. Amazon is considered one of the most influential economic forces in the world today.
Amazon is a technology company that operates in multiple economic sectors, including e-commerce, digital streaming, cloud computing, and artificial intelligence. However, e-commerce is the largest company segment. Amazon is a general online retailer selling products to its customers from around the world. Commonly, Amazon sells electronics, computers, and smartphone products from different brands. The company also sells household products, furniture, clothing, farm tools, and equipment, among others.
3-Year Marketing Plan and Justification Report: Amazon in Mauritius
Organisation Background
Amazon is the largest e-commerce company in the world. The main areas of operation for the company include e-commerce, cloud computing, artificial intelligence and digital streaming. Based in Seattle, Washington, Amazon is one of the big five tech giants alongside Apple, Facebook, Google and Microsoft (Amazon, 2016). Amazon is considered one of the most influential economic forces in the world today.
Type of the Organisation
Amazon is a technology company that operates in multiple economic sectors, including e-commerce, digital streaming, cloud computing and artificial intelligence. However, e-commerce is the largest company segment. Amazon is a general online retailer selling products to its customers from around the world. Commonly, Amazon sells electronics, computers, and smartphone products from different brands (Amazon, 2016). The company also sells household products, furniture, clothing, farm tools and equipment, among others.
Size of the organisation
Amazon is now 48 times larger than it was back in 2004 and four times its size in 2012. According to recent annual reports, today, Amazon has 288 million square feet of warehouses, retail stores, data centres and offices (Amazon, 2016). In 2017 alone, the company added 74.6 million square feet, which was higher than the total of 73.1 million it had in 2012. The Amazon growth is illustrated in the chart in figure 2.
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Fig. 1: Amazon's square footage growth between 2005 and 2018
Source: Madrigal (2019)
Customer Base
Since e-commerce is Amazon’s primary business, the majority of the customers are from the B2C customer base. This means that Amazon has largely consuming customers for their products. Currently, there are more than 310 million Amazon customer accounts globally (Miller & Bosman, 2011). The majority of these accounts, i.e., 90 million, belong to Amazon Prime members who spend more than $1300 annually, while 220 million belong to non-prime members averaging $700 million every year (Amazon, 2016). As an emerging agricultural economy, Mauritius will be an appropriate market, especially for its agricultural equipment and tools. With a population of 1.266 million and an agricultural and financial hub in the East and South African region, the country can serve as the ideal Amazon base to serve the rest of the region.
Amazon competitors
Amazon enjoyed the first-mover advantages in the e-commerce industry having been founded in 1994. To maintain its top position in the industry, the company relied on continuous innovation, efficiency in the implementation of its strategies and patenting of its innovations (Mellahi & Johnson, 2000). The global e-commerce industry is largely characterised by late movers and innovators. Conventional retail store, Walmart is one of the late movers that have gained significant e-commerce market share in the last decade. Today, Walmart's e-commerce is the second largest in terms of revenues. The rapid growth of Walmart was linked to its brand reputation and existing distribution and storage infrastructure around the world (Inci, 2022). Figure 2 summarises Amazon’s main competitors in the e-commerce industry.
Fig. 2: Top Amazon competitors in the United States
Source: Inci (2022)
Around the world, Chinese e-commerce giant, Alibaba, has emerged as a formidable competitor to Amazon. Unlike Amazon and Walmart, Alibaba specialises in wholesale selling (Inci, 2022). Additionally, Alibaba is divided into separate business segments such as Alibaba, Taobao and Tmall. Due to this, Amazon does not compete directly in its market niche. Japanese, Rakuten and India’s Flipkart have also emerged as considerable competitors to Amazon in the last decade. For instance, Flipkart has more than 100 million users from around the world. Rakuten is an innovator (Inci, 2022). Alongside Amazon, they are leading in the use of technological means in delivering products such as the use of drones.
Amazon’s stakeholder analysis
Amazon’s internal and external stakeholders were evaluated using Mendelow’s matrix. Amazon’s stakeholders include the board of directors, investors, customers, partners, suppliers and employees (Saunders, 2001). These stakeholders are affected by Amazon’s performance and decisions as shown in Mendolow’s stakeholder matrix shown in Table 1.
Table 1: Amazon’s Mendolow’s Matrix
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Source: Author’s own work.
Investors expect the company to continue growing and making money. These stakeholders want to see Amazon innovate and improve its cost efficiency. Customers should be kept satisfied with high-quality products at fair prices (Godelnik, 2011). They want transactions which are secure and make convenient purchases. They expect their information to remain confidential and Amazon to assure them of best practices at all times.
Employees want to be assured of job security, opportunities for career advancements and high salaries (Spector, 2000). Strategic partners and suppliers expect the company to grow and expand to benefit from high returns and maximise the benefits from its association with Amazon. Finally, the community want to see Amazon investing in social well-being and social development within the community. Though on Mendelow’s matrix, the community have low power and interest, Amazon must still be accountable to them in terms of sustainable packaging and reducing its carbon blueprint (Godelnik, 2011).
Strategic Marketing Plan to Attain Market Penetration
Smith’s SOSTAC model provides an effective framework for promoting the new Amazon product in the Mauritius market. The SOSTAC model can be described as a digital marketing planning model used to assess the current and future organisation situation and determine the success features and strengths (Mckinsey, 2016). This model helps assess the areas within the organisational framework to build competitive advantages and sustain its current competitive edge. The application of this model encompasses conducting a comprehensive marketing audit on the organisation and the current problem (Smith, 2004).
Marketing Audit
Amazon's expansion goals are impacted by both internal and external factors. Notably, Amazon faces strong competition from many emerging companies, especially in Africa. This report section evaluates environmental and situational factors that may influence Amazon's success in Mauritius. A strategic marketing audit encompasses examining the organisation’s external and internal environment in line with the set objectives and strategy (Stone, 2009). Strategic audit assists in revealing the opportunities and threats surrounding particular businesses and their strengths and weaknesses.
Scope of the Audit
The marketing audit of the company encompasses reviewing Amazon’s marketing environment using various strategic tools and models. Amazon’s internal environment was evaluated using McKinsey’s 7s, BCG Matrix, Resource-Based view and VRIO framework. On the other hand, the external environment was analysed using Porter's Five Forces model, PESTEL analysis and SWOT statement. This analysis relied on the company’s strategic plans, sales reports, customer surveys and other past data.
Internal Environment
Table 1: McKinsey’s 7S’ for the assessment of Amazon and its digital marketing strategy capability
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Source: Author’s own work
Resource-based View/VRIO Analysis
Resource-based view/VRIO analysis provides an in-depth analysis of the company’s
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