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Case Analysis of Amazon.com in China
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Case Analysis of Amazon.com in China
The case of Amazon.com’s unsuccessful entry into China is a demonstration of why businesses need to localize strategies as they advance into international operational platforms. Amazon.com is a renowned e-commerce business outlet whose success comes from its ability to create and innovate. The organization consistently relies upon its elements like unrivaled logistical expertise, advanced technology, and positive brand reputation to scale different markets (Jiménez-Portaz et al., 2024). However, it still did not perform effectively in one of the largest e-commerce platforms in the world: China. Superficially, Amazon faced a different competitive environment in China with competitors like Alibaba and JD.com proving worthy in their ouster of Amazon. To fully understand Amazon’s case in China, this analysis exploits the cultural and operational challenges as well as the strategic analysis of the move to mark the growth in the Chinese market. The analysis proves that the effective execution of any internationalization strategy must stem from an advanced strategic fit between the organization and its target market before settling on cultural changes to execute the move.
Strategic Analysis
Aligning International Strategy with Corporate Strategy
Advancing a strategic fit is a critical step in determining the moves that an organization intends to deploy as it enters a new market. In developing the fit, the seeking organization must assess its key competencies against the needs of the market that which it intends to operate (Shen et al., 2020). Amazon has a corporate strategy that is anchored on offering a vast selection of options. Differentiating operations, for Amazon, makes it easy for all their target customers to achieve what they need at any particular time of search (Jiménez-Portaz et al., 2024). The other key components that mark Amazon’s operational success include its ability to offer competitive prices as well as deliver superior customer experiences. All the above abilities of Amazon are extensively supported by the organization’s robust technology and logistics infrastructure (Ioan-Iustin et al., 2024). In the e-commerce industry, Amazon remains a pioneer in developing structured technologies to boost its other competencies like logistics and customer relationships. While entering the Chinese market, Amazon considered leveraging the above strengths.
The move to find a fit between its strengths and the needs of the Chinese market proved vital in the trajectory of Amazon’s operations in China. While assessing the key competencies, it is notable that Amazon deployed the unique brand reputation that it enjoys in most of its markets to reach the Chinese market (Ioan-Iustin et al., 2024). Further, the company focused on extensive innovation in Chinese supply chain management as accompanied by cutting-edge technologies. The strategic intent was marked with the acquisition of Joyo.com in 2004. Joyo was a local e-commerce outlet that understood the market. As per the understanding of Amazon, boosting Joyo’s position by introducing it to newer technologies could have revitalized the trajectory of the whole e-commerce market of China. The move toward a fit failed. Partly, the failures stemmed from a range of factors. For instance, Amazon overlooked the characteristics of its target consumers in China. In the Chinese market, customers are accustomed to social and interactive shopping experiences. Additionally, Amazon failed to address the faster delivery initiatives t...
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