New Discussion***Many companies use their brand as a competitive advantage. Given your knowledge about the global economy, identify three brands you believe have the strongest likelihood of remaining a source of advantage in the 21st century and explain why. Explain the effects you believe the Internet’s capabilities will have on the brands you identified in the previous discussion and what the owner of the brand should do in light of them.
Previous discussion below.
Previous Discussion Below:
It is challenging and difficult to compete favorably with Amazon in the marketplace because it is close to impossible to beat them. The competitive advantage towards the success and influence of Amazon is low pricing strategy, offering diverse range of products both via physical grocery and digital media and shopping convenience and flexibility through same day delivery (Du, 2019). Amazon has massive infrastructure scale which takes long for a competitor to build and they offer services including shipping in a better deal because they can afford. Amazon and Google are considered internet giants where Google is a strong competitor with Amazon in selling goods and services online. Though, Amazon still heads the competition, Google as a close range in search engine competition with Amazon.
Amazon is a successful business leader globally and being a leading retailer. Amazon gains its strengths from strategic management including cost leadership, differentiation and focus (Management Study Guide, 2019). The kind of strategy contributed immensely on the growth and expansion of Amazon over the year rising in the number of sales benefiting shareholders. The other main competitive advantage is the adoption and application of information technology (IT) on its processes especially the e-commerce which is scalable and flexible making it ahead of competitors. The application of superior logistics and distribution is also a major strength. One of the weaknesses of Amazon is the venture into diverse product sales and experiences zero margin business model even with huge sales volume and revenue but profits are not meaningful. Amazon also is leading a direction of losing its core value and competence of retailing books and venture in other new products that causes a loss on its strategic advantage.
The understanding the external environment of a business plays an important role in helping predict the future of the business in terms of expansion and knowing the potential customers. External environment is responsible in shaping the goal of an entire industry based on the space available and also demographic (Kruk, 2019). Firms fail to focus on understanding the external environment because they focus on (internal environment) current issues and profits and not considering future changes and business vision. Walmart is an example of firm that failed to focus on understanding its external environment leading to violating Clean Water Act attracting a fine of $81 million. Chavez –seized Cargill (Venezuela) failed to comply with land laws leading to money lose as fines.
Du, J. (2019). Rethinking Competitive Advantage in Today’s Strategic Management. Academy of Management Proceedings, 2019(1), 15762. doi: 10.5465/ambpp.2019.15762abstract
Kruk, D. (2019). Productivity or External Environment: Which is More Important for Growth in Emerging Markets. Entrepreneurial Business and Economics Review, 7(2), 119-139. doi: 10.15678/eber.2019.070207
Management Study Guide, (2019). SWOT Analysis of Amazon. Retrieved from: https://www.managementstudyguide.com/swot-analysis-of-amazon.htm