1. Amazons strategy was growth and in this, they were customer-centric.

CEO Jeff Bezos was focused on offering customers the widest selection dominating with price leadership and pleasing customers through continual shopping convenience. Amazons strategy was the utopia for the 3 horizons of strategy in that: Horizon 1 which comprised of their core business (physical media) had to be extended Horizon 2 comprised of acquisitions and alliances totally more than 6 during the 2007 to 2010 era alone Horizon 3 to have a greater and diversified product offering to support the core of the vision Earths most customer-centric company As depicted in Jeff Bezos original strategy in 2005, Growth was the centrifugal force driving the strategy for the years to come and was evident through the numerous acquisitions and innovations of Amazon.com, Source: Amazon.com. (online). 2010. Available http://www.wikinvest.com/stock/Amazon.co m (Accessed 15 March 2012) Amazons strategic position (context) was clearcut in the environment in which they traded. They knew the opposition and simultaneously, they knew their own strengths and weaknesses. They drove their basic purpose which was to be customer-centric. Further, Amazons strategic choices (content) included many acquisitions that allowed them to keep in line with their drive for innovation. International expansion supported their strategic choice. Evaluation forms were especially from 2007

sent out with all orders and this enabled Amazon.com to continually better themselves in order to see their strategy in action(process). Innovation was a big driver for Amazons strategy and the status quo was always challenged. The environment was continuously scanned for Amazon to be ahead of innovation. Strategically aligned acquisitions and alliances enabled Amazon.com to pursue technological development. 2. What do you consider to be Amazons strategic capabilities? Amazon displayed dominance in all 3 areas of strategic capability. 1. In the physical sector of resources, Amazons data bases and computer systems allowed them to have competitive advantage in the industry. This competency was visible in the way in which Amazon invested heavily in software development and the rewards of which were evident in the growth of the consumer base. 2. The financial sector of Amazons strategic capability was through its extended payment terms with suppliers and short credit terms with customers wherein Amazon enjoyed approximately 26 days of value difference, with one operating cycle indicated below, depicting a 19 day value difference. Further, continuous shareholder investment allowed Amazon to invest in its key innovation requirements. Source: Amazon.com. (online). 2010. Available http://www.wikinvest.com/stock/Amazon.co m (Accessed 15 March 2012) 3. The people element of Amazons strategic capability was having the right people for the job. Richard Dalzell, a former Walmart Vice-President was appointed as Chief Information Officer and he brought with him, tons of knowledge on supply chain systems and logistics. Further recruitments had

been done from AlliedSignal, Apple, Black and Decker, Delta Airlines and Microsoft (Johnson, Whittington and Scholes:2011) As evident from above, Amazon tactically balanced their strategic capabilities which was crucial for them to deliver success in the competitive market. Even the acquisitions and alliances were strategically conducted to ensure the aligned growth strategy.

3. Amazons environmental scan indicated many opportunities (by increasing the product range, acquisitions and alliances, leading the online shopping market through innovation) and clearly showed the threats (existing and newcomers to online shopping). BarnesandNoble.com was a new online store after being one of the largest physical bookshops. They were direct competition to Amazons original core business of physical media. In order for Amazon to retain strong growth, it had to offer its customers more than just one category of merchandise. Amazon also employed its own internal strengths through its capabilities and quickly identified its weaknesses through its customer evaluation forms. By doing this, they furthered their deployment of leading innovation by investing heavily, in excess of US$1bn 2008 alone. Innovation was to be the forefront of their diversification. It was going to be all about data driven automation which, while feeding Amazon the relevant Customer feedback, was satisfying the Customer through more optimized experiences. Another 17 merchandise categories were added to Amazons core business of physical media. This range offering enticed more customers globally and contributed to Amazons long term growth strategy and this is depicted in the comparison graph below.

Source: Chaffey, D. 2012. Amazon.com case study (online). Available http://www.smartinsights.com /digital-marketingstrategy/online-businessrevenue-models/amazoncase-study/ (Accessed 15 March 2012)

Partnerships e.g. with Toy R Us, allowed Amazon to gain insight into their customer market which was key to gain more dominance in the market, especially the U.S which was starting to become saturated. More information about customers meant more offering to customers resulting in greater sales which meant higher growth levels. Amazons international expansion enabled their diversification strategy to materialize exponentially. At a point during 2007-2010, international sales had overtaken North America sales in Amazons core category of physical media, as indicated below:

Source: Amazon.com. (online). 2010. Available http://www.wikinvest.com/stock/Amazon.co m (Accessed 15 March 2012)

A basic conclusion on Amazons diversification strategy cannot negate the fact that Amazon.com wants to lead in its market, through technology and innovation,

by offering the widest selection of products at the right price and through unrivaled convenience. All this is to support its mission to become Earths most customer-centric company. The key to success for Amazon was the fact that it cleverly linked all its operational and business level strategies to its corporatelevel strategy thus aligning its multi-directional focus to one strategy. References Johnson, G., Whittington, R. and Scholes, K. 2011. Exploring Strategy Text and Cases 9th edition. England. Pearson Education Limited. p576 Amazon.com. (online). 2010. Available http://www.wikinvest.com/stock/Amazon.com (Accessed 15 March 2012) Chaffey, D. 2012. Amazon.com case study (online). Available http://www.smartinsights.com/digital-marketing-strategy/online-businessrevenue-models/amazon-case-study/ (Accessed 15 March 2012)