Sample MBA5007 Managing Strategy and Innovation Case Study 2

MBA5007 Managing Strategy and Innovation Case Study 2 Sample

Assessment 2 - Case Study Development – Strategic Plan

Task:

You must write a Case Study Report about a production based company discussing the strategic plan of an organisation. This should draw on learning from Modules C and E (Chapter 5, 6, 9, 10) of this subject. Furthermore, key terms and concepts should be defi ned wherever possible. Be analytical within your report and examine key terms and theoretical relationships in depth.

The Case Study report should be written in appropriate business language so that your analysis and discussion have an objective tone. Your writing should be clear and concise and be in your own words. Use headings to guide the reader and include tables or diagrams that make the case clearer.

Aim:

To present a case study based on the selected organisation’s current business strategy and the recommended strategy. The Case Study report must be in the range of 1,500-2,500 words in length excluding references. The referencing style must follow the APA referencing style.

In a case study report, include following:

› 1. Introduce the case study, including the background.

› 2. Describe the purpose and the background of the study and the specific questions you are addressing.

› 3. Discuss the possible competitive strategy options focusing on the strategic planning activity of the chosen enterprise.

› 4. Understand and be able to research the impact that strategic planning has on organisations and the consequent changes that have occurred to the role of business managers.

› 5. Explain the signifi cance of the study and what can be learnt from it.

› 6. Note that a case study is a study of a situation, so you must not generalise the results to all other situations. That means your report should focus on what can be learnt about that particular situation and the individuals involved.

› 7. Recommendations that provide proposals for future action to solve the problem or improve the situation. Each company typically seeks to enhance its performance and build competitive advantage via its own custom- tailored competitive strategy based on more attractive pricing, greater advertising, a wider selection of models, You must demonstrate what type of competitive strategy options the selected organisation has decided to em- ploy, e.g. low-cost leadership, differentiation, best-cost provider, focused low-cost, and focused differentiation— to pursue competitive advantage and good company performance.

Solution

1. Introduction

Online grocery shopping is beneficial for customers. Online grocery or fresh food services companies have achieved popularity in recent days. For Assignment Help, Several companies can flourish their business growth with the help of online grocery shopping. Therefore, the venture AmazonFresh by Amazon inc. is trying to provide the home delivery of grocery due to recent pandemic situations amidst Covid-19 situations, people need to maintain distance. By this, they can easily bring or collect their essential grocery items online. This will help to save their time and money. Online grocery shopping will help customers to prevent impulsive shopping. They can easily buy their products online which will help customers to track the exact amount which they spend on grocery items. With a couple of clicks, the customer easily grabs all the essential products on their doorsteps. This report will be discussed about the online grocery services of the well-known company Amazon. Amazon has expanded its area of the network in grocery and included perishable items in it (Polacco& Backes, 2018). For this change, Amazon has revised and added significant changes in its distribution and warehousing model.

Background of The Study

Amazon launched its online grocery services in the year 2007. The name of this online grocery service is AmazonFresh. AmazonFresh got success on a national scale in a short period. AmazonFresh has to face numerous challenges to get success. Before AmazonFresh started their business there were countless competitors available in the market. Grocery refers to the largest retail sector with a 2010 revenue of $600 billion (Cdn.fbsbx.com, 2021). Consumers shopped for grocery items online 2.2 times per week. AmazonFresh develops partnerships with local merchants to get fresh items for their customers. They serve several delivery options for their customers. AmazonFresh also created its tagline 'ConvenienceDelivered' to promote convenience over price to draw the attention of the customers in the year 2009 (Cdn.fbsbx.com, 2021). In the process of selling their grocery items to the customers, they face several problems which have to be mitigated to better the business growth of the company. Amazon has expanded its area of the network in grocery and included perishable items in it. For this change, Amazon has revised and added significant changes in its distribution and warehousing model. There are numerous competitors available such as Safeway, Wal-Mart, and Stop & Shop which will be a great threat for AmazonFresh.

2. Purpose and Research question

Purpose of this project to identify the competitive strategies of the company named AmazonFresh. This project will be discussed about the impact of the strategic plan of the company. The other purpose of the research question is to understand the challenges of the company to mitigate all the issues to better the growth of the company. Amazon has expanded its area of the network in grocery and included perishable items in it. For this change, Amazon has revised and added significant changes in its distribution and warehousing model.

Research Question

What are the competitive strategies of the company AmazonFresh?
What is the impact of the strategic plan of the company AmazonFresh?
What is the significance of the case study?
What are the learning outcomes of the company?
What are the recommendations for the company to mitigate all the problems?

3. Competitive strategy

Amazon, which is a well-known or famous retail company worldwide, was launched to sell books. But in the year 2007, the company introduced their new online grocery services named AmazonFresh. There are numerous competitors of AmazonFresh such as Safeway, Wal-Mart, and Stop & Shop which will be a great threat for AmazonFresh. Amazon becomes a common name carrying major significance in the online retail business. However, Amazon has overcome all of its market entry barriers through drawing strategic plans. The first barrier to the business was the freshness of the products. Here the AmazonFresh company uses 'Focus Strategy’ to sustain itself in this competitive and globalised world (Etumnu&Widmar, 2020). The other retail company faces several problems regarding their products and delivering the products in a short period. By this, the AmazonFresh company uses Focus Strategy. Focus strategy will help to match market attributes with the company's competitive advantages. As evaluated by Galea & Walton (2017), quality is important to sustain in the competitive and globalized world. This strategy helps the company to focus on its products, revenue, and profit. By this, the company focuses on giving fresh products to the customers (Phillips-Connolly & Connolly, 2017). Customers prefer good quality products in a short time. By this, the company serves high-quality fresh grocery and perishable items to their customers. AmazonFresh gives its products to their customers on their doorsteps. This helps the company to grab the attention of the customers. Customer service is highly focused by the retail online companies. With a couple of clicks, the customer easily grabs all the essential products on their doorsteps. AmazonFresh provides a unique facility to its customers (Easter & Dave, 2017). The customers can select the timing for delivering their products to them at their doorsteps. This will enhance the competitive strategy of the company. Customers are the most important key to sustain in the competitive and globalised world. The AmazonFresh company took care of the customer satisfaction segment by creating a feedback section. The customers easily share their reviews with the company which will enhance customer satisfaction.

4. Impact of The Strategic Plan

Amazon started its career as a business by selling books. Gradually, it further moved to grocery sales. Today Amazon becomes a common name carrying the major significance of online retail business. However, Amazon has overcome all of its market entry barriers by drawing a strategic plan. As assessed by Robischon (2017), the first barrier to the business was the freshness of the products. Earlier, E-commerce businesses have majorly relied on FedEx and other delivery options to ensure the freshness of grocery and other food items. Webvan, a grocery selling online platform, has collapsed in the US market in the beginning for not having a proper business model (Galea & Walton, 2017). Different experts in this field also have voiced their opinion about the business model because many companies failed just because of not having it. Amazon has expanded its area of the network in grocery and included perishable items in it. For this change, Amazon has revised and added significant changes in its distribution and warehousing model. On the other hand, Amazon before launching “AmazonFresh” had conducted the beta test with the help of Paul Allen, co-founder of Microsoft, to monitor customers' experience in the website. A dedicated website and “bucket” have been proposed as a technical change in the business apart from supply chain management.

The focus of AmazonFresh was to deliver the items as quickly as possible to bypass the competitiveness of the industry. As reviewed by Kang et al. (2016), to promote goodwill, Amazon has distributed free samples along with delivery initially. To provide fresh items, Amazon is also agreeing with local businessmen and merchants. For instance, fresh fish from the neighbouring Pike Place Market is distributed across Seattle within a few hours (Polacco& Backes, 2018). This has also increased the reliability of customers and added more competitive advantages to the company. Delivery options were increased as the customer can order any items at any time without any complication. As assessed by Lamas & Liang (2016), the company has planned its "Tight Sleep” service for the late orders where groceries are getting delivered at midnight. This wide range of delivery options has fetched nearly USD 5.2 billion in profit to Amazon during the peak time of the Covid-19 pandemic (Geekwire.com, 2021). The company modified the warehouse plan as it has seen many businesses in the industry have failed for not maintaining the warehouse properly. Amazon strategically re-built the distribution channels and created ample space for perishable items. The scheduling system has also been modernised and reliance on the third-party provider has been minimised gradually. The strategic plan has helped the company to establish its feet in the industry efficiently.

5. Significance of The Case Study

The case study of AmazonFresh has provided a significant journey from selling books to becoming one of the world's largest E-commerce. The case study has shown different aspects of Amazon from different perspectives. For instance, the company was facing a challenge for extending its sphere in the grocery market. However, later on, the leadership in Amazon has curbed the issue by adopting a strategic plan for the business establishment. The significance of the case study can be analysed from different perspectives. In the supply chain system, Amazon has started selling perishable items since 2007 and it has been widely adopted by the customers as well because the company delivers only fresh and quality items (Lingyu, Lauren &Zhijie, 2019). Initially, the company rented cars and refrigerators from third-party businesses. Later on, it has purchased the essential equipment to avoid delays in supply. The company is one of the earliest companies that introduced one-day delivery.

In the delivery of items, Amazon only delivers fresh items from the local market by not degrading the quality at all. Added to that, Amazon offers several options for delivery of packages including "pick and drop" services. Most interestingly, the company also launched an initiative namely "tight sleep" for those customers who need fresh groceries early in the morning. Thus, it can be said that the company has adopted very unique and different strategies to make itself successful in this e-commerce business. In technology, the company has dedicated a separate website for AmazonFreshand tracked its traffic rate regularly (Etumnu&Widmar, 2020). It was recognised that the new website lacks reviews related to products and thus the leadership of AmazonFresh has decided to include this aspect quickly in the platform. In leadership, the company has performed great because of its leadership only. The company majorly focused on digital technology for growth.

Thus, this case study has almost detailed each aspect of a business in a broad framework. From the case study, the aspects of supply chain management, delivery, leadership, digital technology and other aspects also.

6. Learning Outcomes

The online grocery selling market of the United States is quite big and AmazonFresh has successfully occupied its place in it through its elaborated strategic plan. The growth rate of AmazonFresh in the United Kingdom stood nearly 76.2 per cent in the year 2020 (Theguardian.com, 2021). The company has fetched positive growth amid the Covid-19 pandemic. The company has started from scratch where it has seen the major failure of Webvan, an online retailer, and learned a different perspective from this lesson. The company majorly focuses on competitive strategies and introduced an extensive digital platform as per the customers' convenience. Amazon has taken a focus strategy to improve the quality of its products and introduced new benefits for the customers through this strategy. The company has increased its minimum size of order and offered "prime membership" on the other to waive the additional charges (Bongard, 2017). This has proved a success factor to the company because it flows regular profit to the company.

Comparison between AmazonFresh and Their Rivals

1. How does the mean wholesale cost of AmazonFresh for retailers contrast with the estimated spending per industry for wholesalers?

- The mean wholesale cost of AmazonFresh for retailers can be determined as the success of Amazon Fresh could rest in the counting of its operations. Brick and mortar food businesses consist mostly of fixed expenses, however, AmazonFresh is trying to provide promotional offers in order to gain the market share. The aim is to achieve a little increase in the narrow gross sales margins to profitability, considerably more than operating expenses (rentals, utilities, shop workers). The cost is largely changeable in comparison with online foodstuffs. Therefore more purchases, the more pickup, packaging, transportation and shipping the firm must pay. Hence, profitability has few possibilities (Lingyu, Lauren &Zhijie, 2019).

2. How does every quality of the product contrast broad effectiveness/excellence to the sector?

- On the other hand, though, there are more — preferably more — items to load the shipment. Hence, Amazon Fresh begins to seem smart here. The firm has a distinct supply chain set up than its competitors such as Big Basket and Grofers. Additional participants often transfer orders to shops that choose either in conjunction with and even as business segments of supermarket local companies delivering from the supermarket shelves directly on customers doors. Amazon Fresh employs rehabilitation centres outside city centres. This offers Amazon offering approximately 500,000 non-consumable products for shipping with AmazonFresh to enhance the standard offer assortment (Etumnu&Widmar, 2020).

3. How does AmazonFresh's weekly sales effort count towards the local average amount of weekly incentives for each province?

- Calling for sales is not what they have been formerly for AmazonFresh before the Pandemic situation. Firstly, because of the accessibility of online and in-person platforms, sales employees deal with clients who are equipped with masses of previous studies. Contemporary salespeople meet more individuals and are supposed to market new sorts of complicated digital items. They must influence consumer groups. The typical purchasing cycle is therefore lengthier, such that consumer demand is tougher to foresee and used for objectives (The Guardian, 2021).

4. How can we assess the extent of each AmazonFresh's retail reductions to the average residual discounted throughout advertising campaigns?

- Many organisations have undertaken key modifications, such as the development of a new online platform, Similar steps were taken by the venture of AmazonFresh. Hence, the inclusion of specialist jobs and the implementation of team sales to develop in this changed and competitive market climate. However, it is nevertheless important to disregard this shift. Taking the current difficulties fully into account requires developing new, deliberate models of remuneration that clearly motivate a sales staff to keep selling efficiently. Salesmen need not be taught what to perform; they ought to be convinced of conducts that complement the marketing approach of a corporation (Robischon, 2017).

5. How do the annual spending of individual companies relate to the area average spending on marketing?

- The combination of incentives, quotas, wages and business unit incentives may be a driving factor for growth. Intelligent modifications of pay models showed a 50% larger sales effectiveness than adjustments in advertising spending. The perception of the company through various engagements and several conversations with the marketing professionals demonstrate that the functional requirements are necessary to redesign sales pay models and to assist sales organisations in responding effectively to some of the most important concerns presently (The Guardian, 2021).

7. Recommendation

The company AmazonFresh faces several problems as they launched their online services in a competitive market. By this, the company has to know the exact knowledge about market growth. Without knowing about the market growth the company cannot improve its quality of work. The company should know about their competitors' market policies and market growth to better sustain in this competitive and globalised world. The company has to make a good relationship with other companies to know their strategic plan.

On other hand, it is discussed that the Amazon company was not good at all in their technology. They create another website for AmazonFresh which creates a problematic and complicated situation for the customers. The company has dedicated a separate website for AmazonFresh and tracked its traffic rate regularly. It was recognised that the new website lacks reviews related to products and thus the leadership of AmazonFresh has decided to include this aspect quickly in the platform. The company has performed great because of its leadership only. The company majorly focused on digital technology for growth. By this, the company has to take good care of their technological error. They also have to create a single website for them. By this, the customer easily shops their essential items through the main website.

8. Conclusion

The case study report highlights the business of AmazonFresh and discusses it elaborately. In the report, the sections are allotted to explain the key insight about the company and its business extensively. Amazon has successfully operated in the field of e-commerce from the beginning because of its wide competitive strategies. Thus, the element of competitive strategy that the company has gained through its journey is elaborated in this report. The learning outcome of this case study is also attached in the bottom section of the report. Finally, the report ends with some suitable recommendations that the company may follow for its future ventures.

References