Amazon.com online presence and success

Amazon.com is an iconic example of an electronic e-commerce company that manufactures electronic books, online retail, and Web services. The company’s headquarters are in Seattle, Washington. Amazon.com is vast e-commerce or internet-based company that sells electronics, music, books, toys, movies and housewares, and many other products. The products are either sold directly to the clients or as the middleman between the retailers and many other customers in the world. Cloud computing, also known as computing sources, is one of the Web services provided by the company as well as data renting. In the year 2020, 1% of North America’s total internet traffic traveled through the company’s data centers. Thus, it proves that the company’s online presence has been considerable and successful.

The company also makes online e-book readers such as the Amazon Kindle. The promotion of online reading services by the company has led to massive growth in the demand for e-book publications in the market. Thus, the company is well known for the disruption of well-established technological industries through mass scale and technological innovation. By the measure of market capitalization and revenue, Amazon is the world’s largest online marketplace. Also, Amazon is one of the world’s most valuable organizations since it is the second-largest employer in the United States’ private sector. The company started a project known as Fulfillment by Amazon that involved the management of the inventory of small companies and individuals who sold their products online through Amazon’s Internet site. Back in 2012, the company bought a system known as Kiva Systems that automated its inventory management business hence purchasing the food market.

With Amazon’s success in the e-commerce market, many other companies have risen to provide internet-based services. Therefore, market competition has increased where the interment providers strive to expand their markets by outdoing each other both domestically and internationally. As an international marketing manager to Amazon, it is my responsibility to develop and implement the most appropriate marketing strategies for the company. With the rise in market competition for e-commerce companies, this paper provides strategic approaches to be applied by Amazon for market success.

Description of Amazon and its growth strategies in an international perspective

Amazon has, for a long time, been the pioneer in the e-commerce or online retail space. The company started as an online bookseller and store; then, it expanded quickly to start selling any products that can be sold online. The company has expanded its global market and by expanding its operations globally through the combination of global logistics and delivery platforms as well as localized portals. For a company to reach such heights of growth in the competitive market, intensive growth strategies have to be put in place. For instance, market development is one of the primary growth strategies by Amazon. The main goal and objective of market development is to focus on entry into new markets and growth in the markets. Amazon has continued to expand its international markets since it used to provide internet services in the U.S. market but now it has developed e-commerce websites in other countries such as China, the United Kingdom, Canada and India.

Market penetration is another growth strategy by the company whose aim is to generate more income and revenue from the markets where it operates. All e-commerce providers depend on their customers therefore, with the growth in consumerism, the company also grows. Product development is another growth strategy which aims at developing and offering new products in the market to gain higher revenues. Amazons growth is influenced partly with its ability to develop new products for the consumers in the market. For instance, Amazon offers new products such as Amazon Web Services and Amazon Basics. The last intensive growth strategy is diversification where its application is to focus on growth based on new businesses. For instance, Amazon’s growth is contributed by the acquisition of Audible.

Dutch market entrance and the model to be used

A variety of options are open to a company that has made a decision to enter a new market. The options vary with risk, degree of control and the cost. For instance, Amazon did not enter the Dutch market years ago but now is the right time for the organization to enter the market. Amazon is late in terms of market entry into Netherlands. The negative implications associated with late market entry is that there are already well established and strong e-commerce platforms that are already in existence in the country. For instance, Ahold Delhaize’s BOL.com is currently the leading e-commerce platform in Netherlands. Thus, it calls for effective strategies to help Amazon outdo the company and expand its market in Amazon.

Transaction Cost Analysis (TCA) theory is one of the best theories that a company such as Amazon can utilize obtain a successful entrance into a new market like Netherlands, (Whitelock, 2002). TCA will help in the development of the most appropriate pricing strategy. When it comes to pricing, Amazon should ensure that the prices of their products in Netherlands is 10% lower than BOL’s prices to ensure that they attract more customers. Amazon should also ensure that they provide a wider range of products than BOL does. For instance, BOL recently added fashion into their online store. Therefore, Amazon should utilize this opportunity seduce BOL fashion merchants to list on Amazon. Fast delivery and fulfillment is also necessary for amazon to thrive the Dutch market. If the customers are satisfied with the services offered by Amazon such wide range of products at affordable prices with a faster delivery and fulfillment, they will switch to Amazon. Partnership and collaboration with the e-commerce companies in Netherlands is another efficient strategy to put in place to ensure that Amazon gets as many customers as possible.

The main competitors for Amazon in The Netherlands

Bol.com is one of the biggest online retailers in Netherlands (Van, 2016). Bol.com started as a Bertelsmann project but it turned to a real Dutch e-commerce company after the failure of German retail group. The company sells toys, books and electronics. Research indicates that Bol.com is the stranger’s retail brand in Netherlands that has the highest growth rate. Ahold Delhaize is the owner of the company and the director is Huub Vermeulen. Much of Bol.com daily busses are conducted by the docdata of the Dutch company. A German born Dutch consultant known as Daniel Ropers collaborated with some private equity investors and turned Bol.com into an online store that sells various products.

Coolblue is another online store that competes with Amazon in Netherlands. The company started in 2000 with just one online store but it later expanded to focus on a single product category such as Sheeraapparaatshop.nl and PDAshop.nl. The first physical store to be opened by the company was opened in 2005 and it focused on the Coolblue brand and emphasizing less on different names of the store. Today, the company sells mostly fitness equipment, white goods and consumer electronics. The company focuses on consumer satisfaction though humor complements. For example, their packaging aims at making the customers happy.

Wehkamp is one of the oldest e-commerce companies in the Netherlands that started in 1952 as a mail-order company. In 1985, it introduced an order system which allowed customers to place their orders through the telephone using a voice-response system. After a decade, the company launched its online website and sold more than ten thousand articles online through their e-commerce platform. Up to date, the company is regarded as a true internet pioneer though its growth and development is slower than for other companies such as Bol.com and Coolblue.

Competitive reactions to be expected and the competitive strategy

On the realization of Amazon’s entry into the Netherland’s market, the online retail stores will put in place new marketing strategies to react to such competitions. The marketing strategies will help the companies to cope with the competition despite the challenges that are in the market. For the example, the companies would prefer to reduce the prices of their products and services to ensure that they retain the customers and attract new ones. The companies can also introduce new products to provide a wide range of products to their customers. Another reaction by the companies can be to increase their marketing budgets to strongly support marketing strategies such as advertisements and promotions to attract more customers.

Amazon being a large and successful company in other countries, it needs to constantly improve its competitive position especially in a new market such as Netherlands. Monitoring market signals and having the right rival knowledge as well as competitive reaction is necessary for Amazon in such a new market. One of the best strategies to be implemented by Amazon to increase its competitive position is to put in place new pricing strategies such as lowering the prices of their products and services to lower amount than their competitors. The prices of services such as delivery should also be reduced to earn a competitive advantage.

Diversification is another strategy that can be implemented by Amazon in Netherlands to ensure that they provide a wider range of products than their competitors. Partnerships and collaborations with other individual and retail companies will also help the company to diversify further its products and obtain a larger market. Importantly, the company should put more focus on customer satisfaction rather than just market competition.

The entry strategy for the Netherlands

According to Broocks and Biesebroeck (2017), exporting is one of the best market entry strategy for a foreign country since it involves the marketing of goods produced in a different country. With little or no direct manufacturing needed in an overseas country like Netherlands, huge investments in the marketing sector is required for Amazon. One of the advantages of exporting is that home based manufacturing is associated with less risks as compared to overseas based manufacturing. It also gives the company an opportunity to understand the overseas market accurately before making an investment in brick and mortar. With the high risks of operating overs eases, exports reduces the potential risks.

A difference should be created between aggressive exporting and passive exporting. Aggressive exporting involves the development of marketing strategies that provide a clear and broad picture of what the organization intends to achieve in the foreign market. Passive exportation on the other hand involves awaiting the orders or coming across them by chance. Aggressive methods of exportation is the best since an aggressive company has clearly defined plans as well as strategies. The plans and strategies include price, distribution, product, promotion and research elements. However, the motivation to export determines the passiveness and aggressiveness of a company.

Piggybacking is another market entry strategy that can be applied by Amazon where the company can use the services of other companies that have more exporting skills. It involves the consolidation of orders by many companies to earn the competitive advantage associated with bulk buying. Piggybacking is good for a company such as Amazon since it has an opportunity to partner with other experienced manufacturing companies in the U.S. to export different products to Netherlands.

Cultural and management differences

Different countries have different business cultures and business strategies. For instance, Netherlands has a Dutch business culture that is relatedly flexible and not very rigorous when it comes to business hierarchy (Selvarajah, et al., 2018). The people of Netherlands would ignore the authority easily if they deem it necessary. Many Dutch companies have a horizontal business structure where the managers and the employees are considered as co-workers. The form of communication by the Dutch people is direct and informal although a few strict formalities are maintained.

The Dutch business strategies and planning are distinct from those of other countries since the Dutch companies apply a pragmatic and cautious business strategy. A step-by-step planning business culture is also applied by the Dutch companies. A company’s strategic direction in Dutch is communicated to a moderately low level in the company. Top level management is not considered as omniscient in the Dutch business culture. Decision making for all organizations, in politics and social life in Netherlands is made on the grounds of consensus. The opinion of all workers in an organization count when it comes to decision making as suggested by the Dutch egalitarianism. Subsequently, the process of decision making takes a lot of time by once the decision has been made, the implementation becomes fast, efficient and effective.

When it comes to negotiations, the Dutch they get down to business and the process proceed at a rapid pace. The negotiations are known to be forceful, tough and stubborn but the negotiators uphold honesty and reliability. The business cultures of the Dutch people has made them more successful in the market. That is to say, companies such as Bol.com that uphold the Dutch business culture are also successful in the market hence calling for more flexibility and hard work for foreign organizations such as Amazon.

Operational (marketing) plan to be successful

For a company such as Amazon to be successfful in a new market such as Netherlands, effective and efficient operational or marketing plans have to be put in place. One of the operational strategies to help Amazon beat its competitors is to set up offices and stations (brick and mortar) in different location in Netherlands and provide enough workers who respond to the needs of the customers quickly (Wollenburg, et al., 2018). The employees should also be provided with enough training to ensure that they serve the needs of the custormers as expected.

Distribution, delivery and logistics should be efficient to ensure that the customers get whatever products they order quickly. That is to say, many pick up stations should be established with enough trasnsport facilities to serve a wide geographic location in Netherlands. Marketing and advertisements through social media platforms should also be enhanced so as to obtain as many customers as possible. Importantly, the company should consider employing more Dutch employers who are qualified since they have a better understanding of the Dutch business culture.

Conclusion

In conclusion, modern technology has facilitated the establishment of online retail shops in all the parts of the world. Therefore, it is an opportunity for e-commerce companies such as Amazon to exploit all the potential markets in the world such as Netherlands to expand their markets. However, a lot of investments and marketing strategies are required for a company to obtain a successful entrance into a new market. Despite the high market competition in the e-commerce sector, the companies should ensure that customer satisfaction is upheld at all times since satisfied customers will not switch to other companies but instead they will attract other potential customers.

Flexibility is an important factor for all international organizations since different countries have different business and management cultures is seen in the case of Netherlands. Lastly, social media platforms should also be utilized during marketing and advertisement due to the growth in the number of people using social media platforms such as Facebook, twitter and instagram.

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