Sample MBA5007 Managing Strategy and Innovation Report

MBA5007 Managing Strategy and Innovation Report Sample

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Further details on each assessment for MBA 5007 can be found on the following pages.

Assessment Guide

For the assessment of MBA unit 5007, there are five assessment tasks you have to complete in order to satisfy the unit requirements. Details are given in the unit descriptor and on “Studyboard@VIT”.

Solution

1. Introduction

1.1 Context and background to the report

The unprecedented challenges unveiled by the global pandemic of Covid-19 has disrupted the existing operational and functional dynamics across all the different industries of the organisation leading to many challenges like restriction in people’s visits to the physical stores except the essentials amongst others. For Assignment Help, However, the online shopping, delivery, and e-commerce channels have gained huge prominence and momentum in the present time owing to their plethora of convenience.

1.2 Purpose and Scope of the report

The report herein tries to deal with Amazon’s online grocery venture named Amazon Fresh which the brand introduced in 2007 and delivers grocery items upon getting the orders being placed online as well as facilitates takeaways and physical stores. However, to enhance its present dimension of grocery services, Amazon could modify and develop the existing service criteria through the incorporation of the innovative facets of operations. This’s what underpins the report as the report endeavours to develop an innovative plan for Amazon Fresh after ascertaining the influences of macro-environmental and micro-environmental factors on the business as well as determining the internal strategic resources and capabilities of the firm. This would be done by recognising the opportunity and exploiting the same for the betterment and welfare of the brands and integral stakeholders.

Figure 1: Amazon Fresh
(Source: Butler, 2021)

2. Determining the goal and context of the Amazon Fresh initiative

2.1 Charting company’s direction

2.1.1 Vision

Amazon.Inc holds the vision of achieving the position as one of the most customer-centric organisations’ across the globe where customers can find anything of their need in their online platform (Alassaf et al., 2020).

2.1.2 Mission

The mission of the Amazon Company is guided by four key principles that are an obsession with the customer rather than focusing on the competitors, passion towards invention, commitment towards operational excellence, and long-term planning. These four principles of the company act as the mission of the company. They remarked in their mission statement that they strive to offer budget-friendly and best-selected products to their customers (Rivet, 2017). Its mission is to offer attractive services of e-commerce for satisfying the needs of the customers.

2.1.3 Objectives

The objectives of Amazon are:

• To assure safety to their customers by providing grocery delivery services by maintaining all the safety protocols keeping the Covid-19 situation in mind.
• To innovate new technology so that the customers find it easy to buy groceries.
• To help the customers find any item in the store with the help of technology and internet services (Wadhwa et al., 2020)
• To learn about the habits of shopping of the customers after the Covid-19 pandemic.
• To bring significant changes in its warehousing and distribution model.

2.1.4 Strategy

The marketing strategies that were adopted by Amazon during the Covid-19 pandemic are:

Figure 2: Covid-19 increased the E-commerce sales of Amazon by 70%
(Source: Teresa Hernandez, 2020)

The sales of e-commerce have bolt up during the pandemic, Covid-19. Online shopping became the primary source of shopping for a major demographic that is maintaining the social distancing norms so Amazon has planned to shift their product catalogue (Majed et al., 2017).

With the increase in the number of online shoppers, shopper behaviour is becoming deliberate. For competing with the foreign manufacturers' Amazon has decided on making their customer services stronger so that they can uphold a trusted presence in the market.

Volatility in the market has increased due to the pandemic so a lot of delay in service takes place and the customers have several queries so it Amazon has adopted this business strategy after the Covid-19 pandemic to deal with their customer with more patience and flexibility (Robischon, 2017).

2.2 Exploring the competitive environment of Amazon Fresh through the framework of Porter’s Five Forces

The external analysis of Amazon‘s e-commerce business will be done using Porter's Five forces that will mainly focus on the online retail market of Amazon. These external factors will help in understanding the condition of the e-commerce industry. Therefore, the five forces that affect the success of the company are:

Figure 3: Porter’s 5 Forces
(Source: cgma, 2021)

Competition with Amazon (Strong Force)

Amazon strives against strong competitors in the market. Some of the external factors that increase the intensity of competition in the retail industry are: Extreme aggressiveness of the other firms (strong force), the high accessibility of the substitutes, and the low cost of switching (Robischon, 2017). After the Covid-19 pandemic Amazon is facing high competition in the e-commerce market and competing with huge giants like Walmart, the organisation is also having to compete with other foreign manufacturers who are serving the customers directly after the pandemic.

Bargaining power of the customers of Amazon (Strong force)

The customers have accessibility to high-quality information regarding the online retailer service. This macro factor affects the organisation in terms of the customer's ability for finding alternatives to the online retail service of the company. The low switching costs act as a factor that makes customers switch their services from Amazon to Walmart (Majed et al., 2020).

Bargaining Power of the Suppliers of Amazon (Moderate Force)

The product availability or supply is controlled by the suppliers. The suppliers impose their strong force on Amazon due to the small population. However, moderate forward integration acts as a limitation to the suppliers.

The threat of Substitutes (Strong force)

Amazon faces huge competition in the online retail market and they also face the fear of substitutes from their competitors like Walmart. For example, Walmart may try to deliver grocery products of their own brand at a cheaper price. Especially during the Covid-19 pandemic so there are higher chances that the preferences of the customers may change (D'Agostino, 2018).

The threat of new entrants (Mild Force):

As Amazon has successfully won the loyalty of the customers and the high cost for the development of the brand has weakened the new entrants so they do not have fear much regarding that.

2.3 Evaluating the influences of the macro-environmental forces on Amazon Fresh through the framework of PEST

Pest analysis of Amazon

For Amazon, the external factors that affect the development of the industry of e-commerce are the stability of politics in the developed nations like the U.S.A, the support of the government, and the escalating efforts of the government on cybersecurity. All these three factors will act as an opportunity for the company. Political stability helps the organisation affects the company positively and helps the company to bring innovative measures (Al-Marzooqi & Nobanee, 2020).

Economic Analysis

The Covid-19 pandemic has badly hit the economy and has led to economic recession but it has also acted as an opportunity for the company to make a profit from its online services. Since the entire population was homebound their shopping of grocery products was dependent on online platforms. Therefore, taking this as an opportunity Amazon started the service of Amazon fresh for online grocery shopping and saw a hike in their profits during the pandemic. According to the reports of the U.S.A Today, Amazon saw a profit of US$203 billion after the pandemic which is almost double what they earned before the pandemic (Takefman and Takefman, 2021).

Social Factors

After the onset of the pandemic, the preferences of the customers have changed and there has been an increased demand of the customers for online grocery services and the customer preferences towards contactless services have escalated (Preuss, 2019).

Technological Factor

Since the preferences of the customers towards contactless services have increased so Amazon has thought of innovating robotic services for enhancing contactless services. The U.S.A government has plans for transforming a few services with robotic automatic so Amazon can use this opportunity to invent this new technology (Jain & Sharma, 2017).

3. Recognising The Opportunity

3.1 Demonstrating The Sources of Opportunity

Apart from the existing provisions of delivering fresh grocery products through the attended delivery, doorstep delivery and pickup options, one new service innovation could be introduced in Amazon Fresh that is robotic services at the various outlets of the US’ Amazon Fresh outlets. These robots would be helping out the customers in selecting the grocery products that eliminates the needs of the salespeople or assistance. Since the contemporary social and technological factors revealed that people have been inclining towards the "contactless" and online grocery shopping in the wake of pandemic coupled with the advanced technological developments in the areas of artificial intelligence, automation, and robotics respectively, the innovation plan of installing robots at the amazon fresh is put forth. This would not only enable the brand in upgrading the grocery services superseding its rivals but also cater to the present demands of social distancing due to Covid-19 pandemic and online shopping. This because from ordering to billing everything would carried over online and handover to stationed robots and vice-versa.

3.2 How to make use of the individual and organisational entities for driving innovation

Though the cooperation of the customers is of utmost importance in these new innovative services, trained and skilled employees must also be employed in the outlets so as to effectively monitor the functioning of the robots and make sure that the robots are competent in delivering convenient and viable services to the customers. In addition to this, the organisation has to very specific about the usage of proper technology that would do justice to the planned innovation. These contactless grocery services would be available to anyone signed up to the Amazon app and the customers before ordering their required groceries to the robots must scan a code with the robots to access entry and leaving. Even the customers could wait at the store and the robots would help them with all the needful with the need for human interactions and contact.

4. Determining The Critical Resources and Capabilities of Amazon Fresh

In order to make the innovative idea successful, it is integral and very essential for the organisation to recognise its resources and capabilities so as to channelise them into the execution of the plan effectively and exploit the organisational resources and capabilities in the best interests of the organisation and its crucial stakeholders. In the words of Kellermanns et al. (2016), resources could be defined as the organisation’s skills, assets, and knowledge and exist in the form of tangible and intangible resources while capabilities stand for the company’s efficacies and potentiality to effectively use the organisational resources to accomplish the desired outcome. Therefore, the integration of the capabilities and resources in an organisation according to the theory of Resource-based View acts as an antecedent for driving strategic opportunities and advantages for the firm by strengthening its core competencies. These core competencies empower the organisation in procuring competitive precedence in its operating market by offering unique and differentiated service offerings.

In this respect to determine the internal strengths including the resources and capabilities of Amazon Fresh the theoretical framework of VRIO has been contextualised that would be helpful in ascertaining whether the organisational assets are valuable, rare, and non-imitable and supported by organisational efficacies. The framework would also help to understand what type of competitive advantage does Amazon employs.

Figure 4: VRIO framework
(Source: lumenlearning, 2021)

Table 1: VRIO analysis
(Source: aboutamazon, 2021)

All these resources identified helps in ascertaining that most of the resources empowered Amazon Fresh to perceive a sustainable competitive advantage on the part of the organisation in the market. Moreover, since Amazon Fresh strives to cater to the well-being of the customers by aligning to the contemporary safety and health demands as well as enhancing the brand’s service dynamics by exploiting the internal capabilities and resources, it is inevitable that Amazon Fresh would be generating value for the customers. This is because it could be evidentially stated that innovative resources would assist in the installation of the robots while the leadership and employees efficacies would help to sustain the innovation effectively. Furthermore, the sustained corporate reputation and market positioning would help in attracting customers to the new robotic grocery services at Amazon Fresh.

5. Conclusion

The Covid-19 pandemic has changed the needs and preferences of the people and they have started depending more on online services. Amazon.Inc has utilised this situation as an opportunity and they have planned to undertake some innovative measures to bring about some changes in their services. Since the customers prefer contactless delivery services so Amazon has planned to invent robotic automation services so that they can deliver fresh grocery products to the people using robots. In this study, the various micro and macro-environmental factors have been discussed that has helped in recognizing the opportunities which would allow the company to make new innovations with that opportunity.

6. Recommendations

As Amazon has decided to bring about an innovation in technology like the use of robotic automation services, so for continuing that operation without any kind of hindrance they must plan for proper training and development for unwavering services and hire a skilled mechanic or technologically skilled personnel so that if the robotics start malfunctioning then they can mitigate that problem.

7. References