Refer to Case Study 10 and Exhibit 74 on page 210 of the tex

Refer to Case Study 10 and Exhibit 7.4 on page 210 of the textbook for this option. Amazon.com, Inc. (Case Study 10) describes the company’s founding in the mid-1990s. Analyze how Amazon uses the grand strategies of concentration, market development, and product development as a part of its long-term strategy for growth.

In a 3- to 4-page paper, address the following:

Concentration:

Increasing the current customers’ rate of use

Attracting competitors’ customers

Market Development

Opening additional geographic markets                

Attracting other market segments

Product Development

Developing new product features

Solution

(1) Increasing the current customer\'s rate of use - Amazon uses this strategy to increase the average ticket size or the average spend per customer. The company will gain if the current customer increases his average spend amount or if the current user increases his rate of use of Amazon for fulfilling his buying needs. Amazon has incorporated this into their long term strategy by focusing customer experience. Amazon continously evaluates the improvement that can be introduced in its website to improve the customer experience. For this purpose, it has created their internal experimentation platform called Weblab.

The company offers services like free shipping, same day delivery, etc. to increase the fulfillment proposition.

(2) Attracting competitor\'s customers - Amazon not only intends to increase the use rate of current customers, but also attract new customers, customers who are buying from competition. This is done by consistently offering low prices, range of selection, and convenience to customers. This strategy attarcts new customers.

(3) Market development - Amazon has looked to develop markets either by entering new geographic market or by attracting other market segments.

An example would be that Amazon started auctions in 1999, to compete with eBay. Amazon, later moved from auctions to marketplace, thus entering other market segments.

Another example is that this year Amazon entered the online travel market with Amazon Destinations. All this is a part of their long term strategy. In the past the company had entered into the smartphone market, video and music streaming market, and online advertising.

(4) Product development - Amazon is focused on the use of product development as a long term strategy. Product development process at Amazon is centered on the customer. It follows a process that it calls\" working backwards\". They think about the need of the customer at the front end and then work bacward so that the team can build that product.

The company develops new product features so as to engage the customers in a better and more enriching way for the customer. Amazon releases a new code every 11 seconds.