Strategy Implementation, Evaluation and Control 6
Strategy Implementation, Evaluation and Control
Without any one of these three strategies in place your end goal will always fail, your company will lack the success that it needs to grow and will eventually go out of business. These three concepts are a crucial part of how Amazon achieves their strategic goals. If Amazon wants to stay above the competition and maintain their competitive advantage over them they need to make sure their strategies are solid, and they follow them exactly as planned, doing so will give them a strong foothold over the competition.
There are three important strategies that are needed to operate an international business, which are the multi-domestic strategy, global strategy, and the arbitrage strategy. The multi-domestic strategy focuses on what the local consumers response will be to the product standardization. Each country has different needs and preferences that the consumers prefer so Amazon must understand what those are and tailor their products around that countries preferences, you don’t want to sell car parts for a Ford in Germany when Volkswagen is made there because the market doesn’t need those types of parts. The global strategy entails selling a standardized product and having it use the same process to buy globally. Amazon will need to use the same type of marketing in certain locations to help them achieve their economies of scale. Arbitrage strategy is the opposite of the other two strategies, this is known as the simpler of the three strategies to use when you are buying or selling in a different market because it capitalizes on the difference in prices in each market. This type of strategy can involve some ethical dilemmas if your company purely focuses on making a profit and doesn’t take into account what they need to be paying their workers.
Strategic implementation is just that, where leadership will take their strategy and set it in motion. For this strategy to be successful it must be written in a language that your actual workers can understand. There needs to be a clear set of goals that your employees can follow, there is a four-step process that most businesses utilize. This process starts with a clear set of goals for everyone to follow, develop a way to measure performance, every employee must be accountable for performance whether stellar or poor, and those employees who outperform should be rewarded for their exceptional work.
Influence of Governance and Ethics
The influence of governance is put onto every company when they set a goal they are attempting to achieve. Having a great understanding of how governance and ethics affects a business will help to keep scandals away and shying away from those pesky bad reputations, this is a major reason that ethics plays such a major role in the way you govern your business. Ethical values are those that are defined for a single person, a group, or the entire company that helps to determine what it right or wrong. Managers must train employees on the value of ethics to make sure they maintain a positive work environment, there’s nothing worse than working in a hostile work environment for 40+ hours a week. Some companies even take it a step further and reward their employees that represent great ethics, this goes a long way in helping to maintain a positive work environment.
Company Social Value
Amazon now employs a massive 542,000 people around the world and is one of only two companies who employ over 500,000 second only to Walmart who employs a whopping 2.3 million people (Bort, 2017). Some people feel that Amazon has a grudge against them because they won’t hire them, but Amazon has very high standards about who they hire, and they only hire the best. This is what it takes to set your business apart from everyone else, when you hire the best you can make your quality standards the best and accept nothing less which is what they do and a big factor in why they are so successful.
Innovation and Diversification
Amazon has been at the forefront of innovation, they started as just a place where you can buy books and have evolved to be the biggest online retailer in the world. For them to be at the top they need to innovate constantly, and they have with always adding new products for sale, adopting a streaming platform for television shows and movies, and then adding a streaming platform for music. Diversification creates value because it adds a competitive advantage over others, these companies that expand outside of their countries boundaries tend to be more successful than those that stay within their boundaries (Dyer, Godfrey, & Bryce, 2016). Amazon has quite a diverse workforce as they operate all around the world and employ over a half million people.
With being such a huge company there will always be legal issues whether it be within the company or someone filing a suit against you. Companies who feel they have been treated wrong will file suites against them which is why Amazon must maintain a fleet of lawyers to maintain the constant flow of legal actions against them, not to mention they also need to defend themselves against other companies that feel they need to steal their ideas and re-work them into their own.
Strategic Metrics and Financial Ratios
Amazon has done a fantastic job of marketing their products that draws customers right in to buy that product. Amazon has stuck to their goals because they were so good they didn’t need to create any other ones, they are so successful that the market trends predict they will surpass Apple computers in a few years. Their financial ratios are very important just as they are in any other business. These ratios will provide investors with financial records that show all their assets and liabilities and their ability to pay those liabilities off if something were to happen. Amazon’s financial ratio for 2017 was at a 1.06 which is a great indicator of financial strength.
Without involving any of these strategies a company will not be able to stand on their own two feet and will eventually fail. Amazon is in a great position and continues to grow every year, this success can be attributed to their strategy implementation and being at the forefront of innovation. Amazon has stuck with their strategies and as you can tell is has made them a smashing success story and seems that those strategies will continue to propel them even further as the years come and go.
Bort, J. (2017). Amazon now employs a whopping 542,000 people and plans to hire thousands more. Retrieved from http://www.businessinsider.com/amazon-now-employs-a-whopping-542000-people-and-counting-2017-10
Dyer, Jeffrey H., Godfrey, Paul, Bryce, David (2016). Strategic Management: Concepts and
Cases (1st ed.). Hoboken, NJ: John Wiley & Sons
Robischon, N. (2017). Why Amazon is the worlds most innovative company of 2017. Retrieved from https://www.fastcompany.com/3067455/why-amazon-is-the-worlds-most-innovative-company-of-2017