DBA Strategy Roadmap (Amazon)
DBA Strategy Roadmap (Amazon)
School of
Economics)
Table of Contents
Part I: Company Report ...................................................................................................................... 3
1.0 Introduction ................................................................................................................................. 3
2.0 Background of Amazon .............................................................................................................. 3
2.1 Current performance .............................................................................................................. 4
2.2 Competitive position ............................................................................................................... 6
2.3 Internal and External Environment Analysis ...................................................................... 7
3.0 Future business solution to Amazon........................................................................................ 10
3.1 Strategy Map Balance Score Card ...................................................................................... 11
3.2 Impact on current business practices .................................................................................. 13
3.3 Organizational learning challenges ..................................................................................... 14
4.0 Wider implications if proposal is not implemented ............................................................... 15
5.0 Conclusions ................................................................................................................................ 15
References ........................................................................................................................................ 16
Part II: Literature Review ................................................................................................................. 18
1.0 Introduction ............................................................................................................................... 18
2.0 Evidence Review........................................................................................................................ 18
2.1 Strategy Map ......................................................................................................................... 18
2.2 Balance Score Card............................................................................................................... 20
3.0 Potential DBA Perspectives ...................................................................................................... 22
References ........................................................................................................................................ 23
Part III: Reflection for employability enhancement ........................................................................ 25
1.0 The critical thinking and core capabilities required to complete consultancy task for
Amazon ............................................................................................................................................ 25
2.0 Evaluation of current leadership experience, potential, and competencies ......................... 25
3.0 Ability Assessment to work on consultancy task.................................................................... 26
4.0 Personal leadership development plan and career accession ................................................ 27
References ........................................................................................................................................ 28
3
The company started its business initially as online book store. However, later it used
diversification strategy and now it sells large number of products that include jewellery, toys,
food, furniture, apparel, electronics, video games, software, audio book streaming/ downloads,
MP3 streaming/ downloads, and video streaming/ downloads. Amazon’s production of
consumer electronics includes Echo, Fire TV, Fire tablets and Kindle e-readers. The company
is also known to be the biggest contributor of cloud infrastructure services. The Amazon Basics
(in-house brand of Amazon) sells low-end products.
As the company is largest retailer, therefore, it uses spate retail websites for different countries
including Mexico, India, China, Japan, Brazil, Australia, Netherlands, Spain, Italy, Germany,
Canada, France, Ireland, United Kingdom and United States. It also operates in different
languages such as Turkish, Polish and Dutch for German Amazon website. Its products are
4
also shipped globally to specific countries. Thus, the company dominates with 11 international
market place and customers in more than 180 countries.
The mission of the company is to leverage expertise and technology of its invaluable
staff to provide its customers with ultimate online shopping experience.
The vision of Amazon is to be one of the most consumer centrilc organization on earth
and to create a place where the individuals can come to find and choose anything that
they would like to buy online.
The values of Amazon revolves around fraguality, high hiring bar, ownership, bias for
action, innovation and customer obsession.
Amazon is also enjoying increasing sales and operating profits with the passage of time which
clearly reflects its effective business strategy and efficient business performance.
6
Figure 4: Amazon Sales and Operating Income from web services (Soper 2017)
Amazon competes with different retailers with respect to different category. For instance, with
respect to online mass retailer it competes with E-bay whereas for books retailing, it competes
with Half Price books and Bames and Nobles. However, for e-books category, Amazon
competes wth Cybook, Bames and Nobles, Apple i-Pad and Kobo e-reader. Likewise, for
online specialized retailing, Amazon competes with Stapes, Dell and Apple. With respect to
social buying sites, Amazon competes with Deal Map and Groupon. Apart from different
categoes, Amazon also leads in public cloud market.
One of the major strength of the company is that it has a strong background and presence in
the global market. Though, the company started its business with books, but now it deals in
large number of product categories than offered by any of its competitors, except Alibaba.
Another strength is that Amazon operates as a customer centric organization that focuses on
CRM processes to assess the buying behaviour of customers which enables it to offer them
with related products, items visited and preferences. This has helped to acquire new behaviours
with low cost as nearly 55% of their customers show repeated behaviours. Amazon also
outperforms many of its rivals because of its cost leadership strategy which has proved to be
successful. Several strategic alliances have been formed by Amazon with other organizations
to offer superior customer services. The company enjoy low cost structure as it operates on
economies of scale and reduced inventory replenishment time. Besides this, another major
strength of Amazon is its efficient delivery network which is successful because of its
fulfilment centres and strategic partners who help the company to provide products even in
remote areas and also free delivery in some specific geographic regions. Likewise, another
strength of Amazon is its use of “glocal” strategy, i.e., going global while acting local. This
has benefitted the company to compete also with local e-commerce organizations. Finally, its
acquisitions with successful e-commerce giant organizations, such as woot.com, IMBD.com,
Junglee.com and Zappos.com has proved to be a successful strategic decision to generate larger
revenues.
Though Amazon dominates with its strengths, however, it also has some weaknesses. For
instance, the extensive delivery network in some areas is affecting Amazon’s profit margins.
Likewise, it also avoid taxes in UK and US which has created negative image on its
customers. Similarly, in some regions, mainly developing countries, the business has not
gone highlight profitable which has led Amazon to bear debt burden. Some of its product,
such as fire phone, Kindle fire, etc., did not went successful but affected company’s
profitability.
Amazon could still take benefits from the opportunities arising from the global market. For
instance, it could open physical stores with its successful products to have direct engagement
with customers, increase loyalty and improve repeat purchase behaviour. Likewise, Amazon
could also further acquire other e-commerce organizations to reduce competition while taking
benefit from their specialized capacity. Moreover, Amazon could expand in other developing
countries particularly Asian as these are unsaturated markets with low competition.
Furthermore, Amazon could also improve its own products through backward integration.
9
There are some threats for which Amazon is required to take strategic decisions. For instance,
the low entry barriers in the retailer industry is attracting more e-commerce organizations
thereby increasing competition and price wars within the industry. Moreover, it could also
result in losses and shrinking profit markets. Similarly, change in government regulations for
the e-commerce giants could affect Amazon’s operations globally. Similarly, the increasing
domestic competition in some countries such as India and China could affect long term market
share and profitability of Amazon.
With respect to political factors, the change in international policies could affect the growth
and productivity of Amazon. The political factors could also hinder expansion in other
countries, particularly developing, as they have limited view for e-commerce and acceptance
of global organizations (Sinaga n.d.). Similarly, the legal regulations could also affect e-
commerce purchases. Besides this, the war on terrorism, post BREXIT vote, etc., could have
serious impact on the company.
With respect to economic factors, the change in currency could seriously affect Amazon as it
sells products in global regions besides in US. The devaluation of US currency could therefore
negatively affect the company. Moreover, the economic slump, consumer purchase power, etc.,
are some other factors that could negatively Amazon.
With respect to social factors, the limited use of internet due to religious and ethical values
could hinder Amazon’s growth and performance. However, the changing attitude of consumers
to do e-shopping has positive influence on the company. Moreover, the increasing adoption of
10
technology and the rate of internet usage could help Amazon to increase its presence and
market share (Sinaga n.d.). Similarly, social media sites such as Facebook and Twitter are also
contributing to the growth of Amazon as the deals, bundles and introduction to innovative
products advertised in these sites are also creating market awareness and direct marketing.
With respect to technological factors, the change in technology has large impact on Amazon
as it is an online and e-commerce platform. This requires Amazon to constantly engage in
finding innovative methods that could help the company to lead. Moreover, better products,
improved services, and online shopping trend provides huge opportunity to Amazon to
constantly innovate and adapt latest technology to offer products at competitive prices and
maintain its dominant position in the market.
With respect to environmental factors, Amazon could provide cloud storage to customers to
reduce the negative impact of hardware and storage devices. This would eliminate computer
components thereby reducing production of hardware drives, their wear and tear charges,
expenses and other things that lead to pollution (Sinaga n.d.). However, the additional
packaging of the shipped products could be minimized using green strategies.
With respect to legal factors, the internal laws to ship overseas and remote regions could affect
operations of Amazon. Moreover, there are also separate laws for most chemicals and alcohols
which Amazon is required to adhere to. Similarly, multimedia content and internet content
require certain rights which Amazon has. The copied and duplicated content of several
products, such as movies, music, etc., should be strictly avoided by Amazon to outperform
competitors.
The following is the proposed strategies discussed in context of balance score card and
suggested to Amazon Inc. The discussion is made for each area, such as financial perspectives,
customer perspectives, business perspectives and third party relationship perspectives.
Monitor shared
services
The following strategies are proposed for third party relationship and training and
development opportunity perspectives:
will improve the initiatives required to be taken by Amazon to execute proposed balance score
card while aligning the projects. This will improve delivery of strategic objectives. Fourthly, it
will help to make information management better. Research has shown that organizations
adapting balance score card for strategy map has better decision making and higher quality
information management (Bernard's Bulletin n.d.). Fifthly, it will also improve performance
reporting as strategic issues and execution of strategic plans could be handled better. Sixthly,
strategy map/ balance score card will also realign the organizational structure and process of
Amazon with its strategic objectives.
5.0 Conclusions
In a nutshell, it could be concluded that Amazon is operating successfully as a technology giant
and has captured its target market adequately. However, the strong competition from Ali Baba
Group (dominant leader) and other emerging technology e-commerce organizations, both at
local and international level could pose serious threat to the organization. Therefore, to
overcome these threats and improve its strategic processes, the proposed strategy map (using
balance score card) is proposed which will help Amazon to achieve its vision and long term
strategic objectives.
16
References
Bernard's Bulletin n.d. The 7 Key Benefits Of Using A Balanced Scorecard. Available from
https://www.bernardmarr.com/default.asp?contentID=972 [8 April 2018]
Digital Commerce 360. Global 1000 spotlight: The top 10 e-retail players dominate. Available
from https://www.top500guide.com/global-1000-spotlight-top-10-e-retail-players-
dominate/ [8 April 2018]
French, S 2018. All the companies in Jeff Bezos’s empire, in one (large) chart. Available from
https://www.marketwatch.com/story/its-not-just-amazon-and-whole-foods-heres-jeff-
bezos-enormous-empire-in-one-chart-2017-06-21 [5 April 2018]
Garcia, T 2017. 20 years after IPO: How Amazon came to dominate books, electronics and the
cloud. Available from https://www.marketwatch.com/story/how-amazon-came-to-
dominate-books-electronics-and-the-cloud-2017-05-12 [8 April 2018]
Jopson, B 2012. Amazon urges California referendum on online tax. Available from
https://www.ft.com/content/61828252-ac1d-11e0-b85c-
00144feabdc0#axzz1RxkefD8m [5 April 2018]
Kaplan, RS and Norton, DP 2008, The Execution Premium: Linking Strategy to Operations for
Competitive Advantage, Harvard Business Press
Latest Quality n.d. Advantages and Disadvantages of PESTLE Analysis. Available from
http://www.latestquality.com/advantages-disadvantages-pestle-analysis/ [5 April
2018]
LIS Career Strategy 2016. Use a SWOT analysis to plot your career strategy. Available from
http://infonista.com/2016/03/29/use-a-swot-analysis-to-plot-your-career-strategy/ [5
April 2018]
Person, R 2010, Balanced Scorecards and Operational Dashboards with Microsoft Excel, John
Wiley & Sons
Sinaga, R n.d, Amazon Marketplace: Getting Started in the Amazon Marketplace, Private Label
Rights
Soper, T 2017. Amazon Web Services posts $3.5B in sales, up 47% from last year, reaches
$14B annual run rate. Available from https://www.geekwire.com/2017/amazon-web-
services-posts-3-5b-revenue-47-last-year/ [8 April 2018]
Wood, M 2017. New to Selling on Amazon? Don’t Worry. Here’s How to Do It. Available from
https://www.fundera.com/blog/selling-on-amazon [8 April 2018]
18
While developing a strategy map, it is important to first define the strategy, followed by the
identification of different measures that helps to implement them and manage them effectively.
In other words, strategy map is regarded as a control tool that helps to prevent development of
incomplete strategies and its concepts. In this regard, Qu and Free (2011) states that graphical
presentation helps to gear the implementation and adaptation of balance score card, particularly
due to strategic management process operationalization, flexibility and signalling of assured
decision-making powers. Besides this, the concept and introduction of strategy map helps to
make implementation of balance score card better. The use of strategy map with balance score
card has been proved to be successful by several researchers such as Young and O'Byrne
(2001), Copeland et al. (1996), Eccles, (1991), Mair (2002), Veth (2006), and Urrutia and
Eriksen (2005).
19
According to Grassl, Agarwal, and Pahl (2012), strategy map is an important part of strategic
planning tool, i.e., meta-SWOT which is based on the capabilities and resources, and business
environmental factors that combines into the end result of the analysis. This is presented in a
slightly changed map. González et al., (2012) states that strategy map has proved to have
positive impact on improve an organization’s competitive position while serving as a tool for
benchmark required for the planning stage of the strategic implementation. Furthermore,
strategy map also helps to improve managerial skills of management to filter the valuable
information while restricting the insignificant information from the strategic basis. In other
words, it could be said that it minimizes the information load on management which helps to
assess only key information that could be used to provide strategic direction. However, Day
and Schoemaker (2005) states that if that strategic signals are assessed incorrectly, they may
affect the competitive position of an organization or reduce stakeholder value. Consequently,
the strategy map could also involve other external factors that supports and identify the
competitive position of an organization. DeSarbo, Day and Oliva (1987) argues that the key
concept behind strategy map is to create visual communication of multifaceted interactions
between different factors or variables linked the competition strategy as it provides the
forecasted outcomes into account. Thus, the strategy map performs role of a supportive
function that helps to formulate strategy and assure its implementation.
According to Iyer and Sankaran (2011), one of the factor that has increased the importance of
strategy map to be used as a tool is that helps to self-control functions while enabling improved
understanding of organization’s management in attaining objectives. This is because it provides
adequate separation of duties and responsibilities, and transfer the power of decision making
to different levels within the hierarchy or structure of the organization. Likewise, Dror and
Barad (2008) argues that development of strategy map should be started form the infrastructure
(root causes) and then include goals of the organization. It also identifies that strategy map
could be used within limited time period and therefore it must be regularly/ periodically
modified and updated.
Platts and Tan (2004) argues that there is no uniform or standard structure for strategy map.
Several diagrams show diverse relational priorities that is developed for similar measures and
objectives. In contrast, Carmona et al. (2011) has identified that there are two kinds of
diagrams, i.e., Pyramid (that includes indivisible layers or matrix integrated) Silo (that
emphasizes on functional relationships). Their research also identified that pyramid type of
map has proved to be effective in project implementation with short term financial outcomes.
20
This regards that any particular character of provided industry or organization and as well as
type of concept of development is also important. This is also supported by Scholey and
Armitage (2003) who provides that use of strategy map differs on the basis of industries and
sizes and also on the basis of corporate context.
According Sheehan (2012), if an organization is unable to create strategy map and implement
it correctly, it will face negative outcomes. This is because adequate level of skills and
sufficient awareness is required to use this tool. Moreover, strategy map is the initial stage that
defines components of strategy, mission, vision and their mutual interactions which all
contributes to provide guidance to operationalise the strategy. However, Kaplan and Norton
(2000) states that strategy map serves as a communication function that is simple and carries
information for employees and stakeholders for the implementation of strategy. Likewise,
Scholey (2005) states that the development process of strategy map introduces transparency
and clarity to the procedure of formulating strategy. This also helps to create early warning
system that indicates level of achievement of goals and emerging issues. Similarly, Markiewicz
(2013) states that strategy map helps to draw attention to align to and adjust to adequate
structure that must be implemented to assure successful operations and improvement. Thus, it
could be said that strategy map serves as an important function, guide or element to help an
organization to identify and implement strategies recognized in different areas.
Kaplan and Norton (1996) emphasizes that balance score card plays important role in an
organization that encourages everyone from top management to lower level workers to work
21
towards a shared vision. However, the top management regularly reviews balance score card
and guide and control others. Some of the important usage of balance score card include
obtaining feedback to improve strategy and learn; perform systematic and periodic strategic
reviews; align and identify strategic initiatives; link strategic objectives to annual budgets and
long term targets; align personal and departmental goals to organizational strategy;
communicate strategy across organization; and gain consensus and clarify strategy to all.
Bhagwat and Sharma (2007) identifies that balance score card serves as an important strategic
management tool as it translates vision and objectives of organization into critical drivers and
operational measures. Moreover, it also integrates both non-financial and financial
performance measurements of four perspectives making them a “balanced” method to monitor
performance of organization. In contrast, Yang and Wang (2010) states that one of the
important characteristics of balance score card is that it provides a snapshot of overall
performance of an organization with the combination of lagging and leading indicators. This
combination also provides a comprehensive view of an organization as it provides a holistic
and clear picture of organization’s progress towards accomplishment of strategies. Moreover,
balance score card also provides improved strategic planning as it enables managers to consider
cause-and-effect relationships. Moreover, it also enables managers to view interrelated
objectives in a better way that improves performance. Likewise, it also assist an organization
to align their initiatives to particular projects that aim to meet different strategic objectives.
Besides this, balance score card also helps to improve management information as it helps
managers to define performance indicators that are helpful in achieving different strategic
objectives. It also helps to report performance to the management.
Kaplan and Norton (1996) provides that there are different factors that reflect successful
implementation of balance score card. Amongst all, it must be successful in bringing required
transformation in an organization to achieve strategic outcomes. However, the other
characteristics include awareness, achievement, alignment and assessment. With respect to
awareness, it means that employees are aware of balance score card concept and has its
understanding its importance to execute organizational strategies. Employees could easily
appreciate the causal relationships among all the strategic objectives identified in scorecard.
With respect to alignment, it means that incentives, rewards, competency development
initiatives, external partners, budgets and support functions are well aligned with balance score
card. With respect to assessment, it means that actual performance is periodically reviewed and
evaluated on the basis of initiatives and targets identified in balance score card. Lastly, with
respect to achievement, it means that all the objectives of balance score card are successfully
22
implemented. The clear visibility of these characteristics shows that organization is successful
in implementing balance score card. However, engagement of employees, both emotionally
and mentally, is also required to achieve vision of organization. Thus, overall performance of
individuals and organization is enhanced.
References
Bhagwat, R, and Sharma, MK 2007, ‘Performance measurement of supply chain
management: A balanced scorecard approach’, Comput Ind Eng, Volume 53, Issue 1,
pp 43-62
Bower, M 2004, Five Questions About….Strategy Maps with Robert S. Kaplan, Harvard
Business School Publishing
Braam, G and Nijssen, E 2004, ‘Performance effects of using the Balanced Scorecard: a note
on the Dutch experience’, Long Range Planning, Volume 37, pp 335-349.
Carmona et al. 2011, ‘The impact of strategy communications, incentives and national culture
on balanced scorecard implementation’, Advances in Accounting, incorporating
Advances in International Accounting, Number 27
Copeland et al. 1996, Valuation: Measuring and Managing the Value of Companies, John
Wiley & Sons
Day, G and Schoemaker, P 2005, ‘Scanning the peripheral’, Harvard Business Review,
Number 83, pp. 135-148
DeSarbo, W, Day, D and Oliva, T 1987, ‘Strategy Maps: A Spatial Representation of Intra-
Industry Competitive Strategy’, Management Science, Volume 33, Number 12, pp.
1534-1535
Fernandes, KJ, Raja, V and Whalley, A 2006, ‘Lessons from implementing the balanced
scorecard in a small and medium size manufacturing organization’, Technovation,
Volume 26, Issue 5, pp 623-634.
González et al., 2012, ‘The alignment of manager’s mental models with the balanced
scorecard strategy map’, Total Quality Management, Volume 23, Number 5, pp. 624-
625.
24
Mair, S 2002, ‘A balanced scorecard for a small software group’, IEEE Software, Volume 19,
Number 6, pp. 21-27
Platts, K and Tan, K 2004, ‘Strategy visualization: knowing, understanding, and formulating,
Management Decision’, Volume 42, Issue 5/6, pp. 667-676.
Qu, SQ and Free, C 2011, ‘The use of graphics in promoting management ideas: an analysis
of the balanced scorecard’, Journal of Accounting and Organizational Change,
Volume 7, Number 2, pp. 158-89
Scholey, C and Armitage, H 2003, ‘Mapping mavens’, CMA Management, Volume 77,
Number 3, pp. 15-18
Sheehan, N 2012, Ready for risk. Strategy map to survive and thrive, CMA Magazine
Urrutiam I and Eriksen, S 2005, ‘Application of balanced scorecard in Spanish private health-
management’, Measuring Business Excellence, Volume 9, Issue 4, pp. 16-26.
Veth, G 2006, ‘Mapping the path to the future’, DM Review, Volume 16, Number 5, pp. 32-
33.
Yang, L and Wang, Y 2010, ‘An innovation in the Performance Measurement System: The
reviews on studies of the Balanced Scorecard’, Paper presented at the IEEE
International Conference
Young, S and O'Byrne, S 2001, EVA and Value-Based Management, McGraw-Hill Publishers
25
Strengths that I possess include good research skills, collaboration skills, competent, complete
my work on time, punctual, encourage teamwork, admire other’s efforts, good interpersonal
skills, enthusiastic, self-motivated, initiative taker, professionally qualified as I am undertaking
DBA studies, knowledge seeker, information gainer, industry experience, leadership qualities,
good vision, rational and logical thinker, good communicator, negotiator, constructive
argument builder, and possess analytical skills.
Weaknesses that I have include limited professional certificates, introvert and lose confidence
when speaking in public, limited knowledge in some areas, lack charismatic leadership
qualities.
Opportunities from which I could take benefit include obtain other professional certificate
courses, work under leader with transformative and charismatic qualities, attend seminars and
other diplomas, increase exposure to consultancy market, gain experience in consultancy, meet
and personally talk to key leaders in consultancy sector to gain wider knowledge and benefits.
Threats that could affect my position and interest as a consultant include lack of time required
to work and deliver high quality consultancy report, too many consultants in the industry, over-
burdening with market/ information knowledge by client, extensive areas expertise by
competitor consultants, and limited opportunity to work at leadership/ managerial position in
consultancy sector.
In the Fascade Area, the different competencies, experience, potential and skills that I have
include caring personality, honest for other people, have sympathy and concern for others,
open-minded, loving, persuasive and friendly people. These qualities are only known to me
and other people are unaware of these skills and competencies.
In the Unknown Area, the different competencies, experience, potential and skills that I have
include critical thinking ability, intelligent, good interpersonal relationships, negotiator, ability
to do several things at a time, good supporter, leadership qualities, vision enabler, and
information seeker/ curious. These qualities of mine are known to other people but I am
unaware of them.
In the Arena Area, the different competencies, experience, potential and skills that I have
include problem solver, integrity, negotiator and guidance provider, communicator, motivated,
energetic, and trustworthy. These qualities are known by other people as well as other people.
In the Blind Spot, the different competencies, experience, potential and skills that I have
include liberal, team oriented, mature, work oriented, technical skills, punctual, high patient,
tolerance level, and ability to work under pressure. These qualities are known by everyone.
Firstly, I will read books on great leaders of the past and present. Moreover, I will also
read books that guide to develop leadership skills. The top rated and bestselling books
will be studied.
Secondly, I will take different sessions of public speaking which will improve this area.
Moreover, I will also attend online courses on improving skills to speak publicly.
Thirdly, I will learn to improve communication skills through different courses. These
will help me to learn and develop effective ways of communicating with people.
Fourthly, I will attend different seminars, conferences, workshops and courses on
programs of communication and leadership.
Fifthly, I will increase my market knowledge, which is very important for a consultant,
by working directly under senior consultants in large consultancy firms.
Thus, these will help me to become a successful consultant at leadership position in future.
28
References
Davies, S 2014, Johari's Window, SilverWood Books
Rath, T and Conchie, B 2008, Strengths Based Leadership: Great Leaders, Teams, and Why
People Follow, Simon and Schuster