Summary of the case
The case study, Analysis of Amazon: Customer-Centric Approach by Baboolal-Frank (2021) unpacks the various strategic marketing concepts that Amazon has adopted to improve its internal and external marketing. The customer-centric approach to marketing requires corporate organizations to strive to meet customers’ needs and wants to obtain mutual benefits and ensure business continuity due to associated increase in profit margins. Amazon has applied this strategy and the organization focusses on maximizing customer satisfaction with the ultimate goal of diversifying the business and promoting innovation in what is interpreted as an unorthodox co-petition strategy (Baboolal-Frank, 2021). Generally, Amazon’s customer-centric strategy has proved fruitful in helping the organization meet customer’s needs from the perspective of both the internal and external environment.
Discussion Questions
- Are amazon’s marketing strategies effective in meeting the needs and wants of its customers?
- What are some of amazon’s best marketing strategies and how will they impact the organization’s future success and profitability?
- What are the major threats to amazon’s success upon implementing its customer-centric strategy?
Core Elements of the Case
Amazon has learned that the traditional strategic marketing approaches are currently outdated and there is a dire need to introduce new methods of tactical design to maximize profits. In this regard, the organization has adopted various level of strategic planning, including corporate, business, and product/market level strategies to gain a competitive advantage, conserve the environment, and diversify its corporate portfolio (Baboolal-Frank, 2021). The customer-centric marketing approach is generally a very competitive strategy that will help the organization to outwit its rivals and ensure that it thrives and survives in the future. The organization’s executive management has adopted innovative ideologies that support strategic management planning to meet the needs of its existing and target customers, retain clients and employees, and attract investors and potential customers.
Besides, amazon has diversified the 4Ps of marketing, including price, place, promotion, and product to incorporate personnel procedure management and physical assets in what is referred to as the 7Ps (Baboolal-Frank, 2021). This ensures that the organization guarantees a conducive environment and space to meet the needs of both clients and workforce. For example, procedure management ensures that the organization utilizes self-services to minimize customer complaints and potential issues that might arise during their shopping. Additionally, the organization adopted the 3Ps, which is a more holistic customer-centric approach to ensuring environmental sustainability, as evident in the planet, people, and profit campaign (Baboolal-Frank, 2021). The 3Ps promote ecofriendly and environmental sustainability, which helps in conserving the environment by minimizing global carbon footprint.
From the external marketing standpoint, Amazon strives to address the needs of dissatisfied clients in its service sector to improve customer loyalty and repatronage. The company’s external environment offers the rational basis for tackling customer dissatisfaction; hence, it has become the cornerstone for customer-orientedness and the overall obsession to focus on the customers. Therefore, the company is able to retain emotional and budget price-driven customers because it is easier to maintain clients who are always satisfied with the products and services. Further, Amazon’s customer-centric approach has increased focus on product and service segmentation, such as digitalization, retail, and internet services, as well as Amazon Prime (Baboolal-Frank, 2021). Segmentation has greatly diversified the services it offers to the market; hence, it has minimized anxiety and eliminated uncertainty by meeting customers’ needs and wants through unique, innovative, and convenient business technologies.
Adapting the marketing strategies to meet the needs of customers implies that the customer-centric marketing strategy will give Amazon an upper hand in acquiring more customers and improving its stability since it will promptly achieve its leadership goals and meet innovation and operational excellence (Baboolal-Frank, 2021). Notably, the company will increase its economies of scale and offer incentives to customers; hence, increasing its competitive advantage in the long run. Again, a blend of the internal and external marketing strategies will help amazon acquire more customers and improve its brand equity. Amazon has also taken advantage of globalization and the e-commerce; hence, it has heavily invested in offering internet services to help monopolize the market and create desirable conditions for attracting and retaining more customers who would want to shop at the click of a button (Ukeni, 2022). This implies that amazon is a versatile company that adopts innovative tactics to increase its adaptability.
Major Issues Identified in the Case and How they Might be Addressed
A critical analysis of the case reveals that Amazon is experiencing various threats that have the potential to compromise its operations. For example, amazon’s customer-centric strategy has disrupted its normal business operations and led to the loss of management. The disruptions have increased risks and fluctuations of its foreign exchange, and this can lead to future losses. The organization’s venture in the internet of things can increase the risk of harm to data and the loss of data in case of hacking and related security breaches (Baboolal-Frank, 2021). Generally, such risks have the potential to compromise the organization’s supplier relationships, increased tax liability issues, and litigation claims (Baboolal-Frank, 2021). Consequently, the organization may face significant difficulties in the future, particularly in terms of challenges in integrating strategic alliances with regard to legal and commercial agreements. Nevertheless, Amazon should develop offline marketing strategies to help it minimize the risks of security breaches and lessen the severity off competitive impact the issue would have on segments that recently introduced online services.
Analyzing the strategy: why the company will be or will not be successful
Despite the threats, Amazon will still be successful because the company has managed to create order out of chaos by increasingly adopting modern technologies, processes, and systems to meet customers’ needs. Although the business disruption has led to short-term losses, the organization will still win in the long run since it has put its consumers at the heart of the ecosystem of the industry. Again, the company’s customer-centric approach will still be successful because the timing of introduction is better than before, especially at a time when the Covid-19 pandemic disrupted offline businesses and customers largely resorted to online shopping. Again, the organization has heavily invested in online security to prevent the hacking of its database. Therefore, it will gain combined financial resources that will increase the purchasing power in various product and service categories, including baby products, health and household, grocer, pet supplies, and technology (Brandstetter, 2020). Amazon will be successful in its customer-centric strategy because it has recognized the significance of big data as its vital differentiator. It can leverage this data to improve cloud security and analyze internal workflows and what specific customers expect of the organization in the education, retail, manufacturing, insurance, and resource industries, among other sectors (Leibert, 2017). The organization should focus on employee retain and prevent possible operating losses while simultaneously reinforcing security protection to cushion its data and private information from security breaches.
What I have learned from the case study and my critical thinking skills
Generally, I learned that the customer-centric approach is one of the best marketing strategies that help corporate organizations to meet the needs and wants of their customers with regards to both internal and external environment. In my opinion, Amazon remains the Earth’s most customer-centric organization, and the strategy will enable it to improve its long-term profitability and minimize risks. I strongly believe that the customer-centric approach will increase innovation and the ability to respond to the needs and wants of customers.
References
Baboolal-Frank, R. (2021). Analysis of Amazon: Customer-centric approach. Academy of Strategic Management Journal, 20(2). https://www.abacademies.org/articles/analysis-of-amazon-customer-centric-approach.pdf
Brandstetter, A. (2020, March 26). Covid-19: Manage risk and avoid disruption to your Amazon business. [Post]. LinkedIn. https://www.linkedin.com/pulse/covid-19-amazon-vendor-guidance-manage-risk-avoid-alex-brandstetter/
Leibert, F. (2017, December 14). The Digital Economy: 3 things every company can do to benefit from digital disruption. World Economic Forum. https://www.weforum.org/agenda/2017/12/3-things-every-company-can-do-to-avoid-digital-disruption/
Ukeni, C. S. (2022). Strategy behind the business success of amazon: A case study. Texila International Journal of Management. 10.21522/TIJMG.2015.08.01.Art009
write