AMAZON INDIA

• Amazon- net sales amounts to $13.2

billion in the first quarter of 2012, a
34% rise compared to previous year’s
quarterly sales (Shaughnessy, 2012)
• Founded by Jeff Bezos in Washington, in
1994
• Offer gadgets, apps, video games,
clothing, décor, food, toys and jewellery
• In 2018, Bezos revealed that its two-day
delivery service, Amazon Prime, had
reached 100 million customers worldwide
• Amazon distributes Video song, and
audible books through downloading and
streaming in its Amazon Prime Video,
Amazon Music, and Audible subsidiaries
• It includes:
distribution company- Amazon
Distribution,
a movie and TV company- Amazon
Pictures, and a
cloud computing division- Amazon Web
Services
Contd.
VISION & MISSION
• VISION: Our vision is to be earth's most customer-centric
company; to build a place where people can come to find and
discover anything they might want to buy online.

• MISSION: We strive to offer our customers best lowest possible

prices, the best available selection and the utmost experience.
 COMPETITIVE ADVANTAGE OF
AMAZON
• COST LEADERSHIP as its Generic Strategy
• PORTERS MODEL
• Minimization of operational costs is the objective in this generic competitive
strategy.
•  the cost leadership generic competitive strategy pushes Amazon.com Inc. to
minimize its price levels.
• Amazon’s cost leadership generic strategy is to build e-commerce competitive
advantage through continuous improvement of information technology
infrastructure.
• Keep cost down for customers and bases its warehouse in rural areas where
land is much cheaper as compared to urban area.
• This strategic objective impacts Amazon’s marketing mix
AMAZON - INTENSIVE STRATEGIES

• Market Development
• Market Penetration
• Product Development
• Diversification
AMAZON SUPPLY CHAIN STRATEGY
• The supply chain management is based on 4 main points:
1. Warehousing
2. Technology
3. Delivery
4. Manufacturing
SUPPLY CHAIN NETWORK DESIGN
 AMAZON
SUPLY
CHAIN
SIMPLIFIED
• The major pillar of Amazon strategy is its technology – Amazon Web
Services.
1. A cloud computing platform includes mixture of Infrastructure as a
service (IaaS), platform as a service (PaaS) and software as a service
(SaaS)
2. Launched to handle online retail operations of Amazon.
3. First company to introduce a pay as you go cloud computing model.
AMAZON TRANSPORT SYSTEM
• 4 types of delivery exists:
1. Slow free delivery (4 to 5 days)
2. Prime: delivery in less than 48 hours
3. Drop shipping:
4. Prime now: delivery in less than 2 hours
Building its own fleet for delivery through air. The goal is to develpoe its
own air delivery network.
SUPPLY CHAIN DRIVERS
• Supply Chain Design designs with respect to drivers –
• Amazon
• Facilities -
• No of facilities – amazon has large no of warehouses which are close to
customer which reduces response time and increase responsiveness of supply
chain .
• Number of facilities increases , inventory cost increases reduces transportation
cost .
• Amazon has excess of capacity which denotes responsiveness as they have high
level of inventory stock
• Location of facility – Centralization which increases economies of scale
• Aggregation is used which allows amazon to hold few inventory in distribution
centre.
Inventory-

• Amazon uses Cross docking which shows more efficiency is been followed , using DC helps to be more cost efficient.
• Huge level of inventory is maintained at different warehouses consisting of different products.
• Decentralization fulfilment centers are been used
• Information
• High investment is done in technology
• Amazon uses machine learning, IOT, analytics , cloud .
• Amazon uses robots which reduces costs .
• Amazon web Service which includes all merchants to access web and provide information , help customer to order.
• Pricing -
• Differential pricing strategy according to its product and customer segment
• Menu pricing depends on delivery of products which customer prefer.
• Customer Segment are -One day delivery ,Prime customer delivery
• sourcing -
• Outsourcing – Amazon outsource the products which are not ordered frequently as cost of storing them is very high
and they follow efficiency . As outsourcing are very risky .
• Amazon in house products for responsiveness , majority of products are available in their own facilities which are
frequently purchased .
Transportation-

• Amazon uses fastest mode of transportation which increases responsiveness ,

increases transportation cost .
• Focus on Low value , high demand items transported by cheaper mode
• Last mile delivery
• If customer needs are high responsiveness they will pay extra amount for the
delivery depending upon which delivery option they had opted which helps
amazon to achieve economies of scale.
• For economies of scales , lead time will be long and transportation cost will be
reduced .
• Amazon uses its own delivery vehicle for same day delivery within few hours ,
increases responsiveness , increases transportation cost .
Strategic Fit of the organization
Yes, I think that the Amazon’s Competitive strategy and supply chain strategy are aligned with each other in
providing the strategic fit to the organisation.
• The combination of multi-tier inventory management, superlative transportation, and highly efficient use of IT
(Information Technology), and its wide network of warehouses, differential pricing strategy, Sourcing strategies
are all geared towards aligning its supply chain strategies with its competitive strategy.
• Amazon outsources the storage and distribution of products that are not frequently purchased nor ordered for
immediate delivery as well as products where the costs of storing them exceed the marginal returns on their
sales.
• On the other hand, Amazon stocks the frequently purchased and ordered items in its own warehouses so that it
can be responsive to the customer needs as well as not compromise on the delivery times and the lead times
• Amazon divides its customer segments and follows a price differentiation strategy. The various forms of
delivery are one day delivery, free super saver delivery, first class delivery, and prime customers delivery.
• For all these segments, Amazon offers the customers an option of paying more for faster delivery or retains the
traditional lead-time.
• A key aspect of Amazon’s Supply chain Management is that it has evolved over the years in response to its
growth in the market.
• Amazon follows a push-pull strategy wherein the inventory is held in a push strategy and the shipment of
the orders is done in a pull strategy .
• Amazon’s one of the important factor in achieving the strategic fit is multi-tier inventory system
Recommendations
• Amazon relies to a great extent on courier companies such as FedEx and UPS, the part of the SCM where the
customer interacts has been found to be deficient. Therefore, Amazon can setup its own transportation and
actualize superior last mile delivery by creating its own fleet of delivery vehicles and personnel.
• The next recommendation has to do with the aspect of “bullwhip”. This means that Amazon can integrate its SCM
better and move from a cooperation model with its suppliers to a coordination mode.
• The final recommendation has to do with unifying its supply chain less than one gigantic IT system so that there is
greater visibility on each component of the supply chain as well as more accountability and transparency in the
process.