In order to have a competitive position in the Chinese market, the Amazon brand needs to exploit the market conditions in the Asian nation. As per the conducted analysis, the Chinese market has a lot of scope for e-commerce business. The Chinese government even has a positive attitude towards this form of business operations. The knowledge of the host country’s market has been used here to get a better grasp on the business entity’s future development trend and forecast (Jørgensen, 2007).
The strategic model that was adopted by Amazon to enter the host market is the acquisition strategy. It acquired this model to strengthen its marketing position in the new market setting. Here the key influential factors that will have an impact on the company’s future development in the host country market have been identified in this section. The business organization’s overall development that can be expected in the next 5 to 10 years has been highlighted(Kahn, 2010). The main areas that have been covered in this section include the firm’s financial performance, market share, sales, corporate social responsibility, etc. (Zhang et al., 2015).
5.1 Key Influential Factors
Large Chinese population – China is known to be the most populous nation in the entire world. Most of its people belong to the middle-class section of society. This factor has always played a major role to give a boost to Amazon’s performance in the host market setting. In the future also the same factor would help the e-commerce business to strengthen its market performance and market position in the dynamic market setting (Siedlecki, 2014).
Use of technology –The Amazon brand has always relied on technology and the latest innovative models to strengthen its performance in the global market setting. In China, the Chinese government encourages firms to adopt advanced technological models so that the traditional form of business operations can be eliminated in the process (Yoon & Park, 2007). The further use of the latest technology can help the e-commerce brand in the coming years as well. Thus the support from the government can help the brand to invest in its R&D model and thus strengthen its financial position in the global market environment (Purohit & Sharma, 2017).
Corporate Social Responsibility Model of Amazon – The CSR model that is used by business undertakings today has a major influence on the consumer perception of the brand. Amazon has always made a sincere attempt to include all of its stakeholders in the business process. In order to meet the needs and requirements of the stakeholders, the CSR model is carefully designed by the firm. It makes sure that the customers get their products at a reasonable rate and the business earns a decent profit in the unpredictable market setting (Aversa et al., 2015).
These factors would play a significant role in the future for Amazon and help the brand to adopt latest business strategic models to strengthen its market entry mode strategy in the Chinese market. These elements would naturally help the Amazon business concern to design innovative models so that it could create a long-term impression in the minds of the Chinese audience. In the coming 5 to 10 years, the Amazon brand would have to strengthen its technological framework and CSR model so that it could have a better relationship with the Chinese audience in the market setting. Such a strategic model would play a significant role to boost its position against its Chinese competitors namely Tmall, JD.com, etc.
Financials:
The financials of Amazon have been highlighted in the below tabular format. The income statement and balance sheet reveal that the business can have a sustainable existence in China if it designs its business strategy after taking into consideration the most influential factors namely the large Chinese population, technological factors and CSR model (Siedlecki, 2014).
In (USD)
Source: (Siedlecki, 2014)
- Recommendation on Business Strategy of Amazon
The current business strategy model of Amazon must be upgraded on a regular basis so that the e-commerce brand can have a sustainable existence in the global market setting as well as the Chinese market environment(Yoon & Park, 2007). This section fundamentally covers a number of strategies that can help the American e-commerce brand to strengthen its sales, revenue-generation capacity and financial performance in the rapidly evolving market setting. The internal and external factors that play a major role and have an impact on the brand’s market performance have been taken into consideration while designing the business strategic model of Amazon (Ritala, Golnam & Wegmann, 2014).
- Amazon must take strengthen its use of social networking websites to have a personal interaction with its customers. It must use the websites that are popular at the global level like using Facebook, Twitter, Pinterest, YouTube, etc. It must also have a presence on some of the popular national social networking sites. In China, people use sites such as WeChat, RenRen, Weibo, etc. Amazon must make its presence felt on these virtual platforms so that it can have a personalized level of interaction with the potential market audience in China.
- In order to beat the major e-commerce rivals in the dynamic market scenario, the Amazon brand could think of adopting the differentiation strategy. It could use ether the product differentiation model or the cost differentiation model based in its convenience and feasibility in the external market setting. In order to have a cost differentiation advantage in the global market setting, Amazon could think of partnering with other popular global marketing brands. This would not only strengthen its position in the market but it would help it to increase its profitability as well. Similarly, the product differentiation strategic model would help the Amazon brand to form a unique bond with the target audience at the global level.
- While introducing its offerings in the global market setting, the Amazon e-commerce business undertaking must take into consideration the local and national preferences. This approach would make sure that the exact requirements and needs of the target audience are met in the process. In the dynamic and unpredictable business setting such an approach would help the brand to have a competitive position in the market setting against the key players in the industry (Yoon & Park, 2007).
- The brand could strengthen its corporate social responsibility model so that its operations and existence in the market would have a positive influence on its organizational stakeholders such as global audience, environment, local community, governments, agencies, etc. The improved and updated CSR model would play a major role to strengthen the brand performance and operations in the global market setting (Spender, 2014).
These recommendations have been designed keeping in mind the current operations and sales performance of Amazon in the global market setting. Even though the brand is a highly reputed business organization, it faces some or other form of competition in the global market setting (Siedlecki, 2014). The recommendations that have been made here would help the e-commerce brand to cater to the needs of the global audience in the best way possible. Such an approach would not only help the business undertaking to expand its business operations in different parts around the globe but it would also increase its profitability and revenue.
References
Aversa, P., Haefliger, S., Rossi, A. and Baden-Fuller, C., 2015. From business model to business modelling: Modularity and manipulation. In Business models and modelling (pp. 151-185). Emerald Group Publishing Limited.
Jørgensen, M., 2007.Forecasting of software development work effort: Evidence on expert judgement and formal models.International Journal of Forecasting, 23(3), pp.449-462.
Kahn, K.B., 2010. New‐Product Forecasting.John Wiley & Sons, Ltd.
Purohit, S.K. and Sharma, A.K., 2017. Development of Data Mining Driven Software Tool to Forecast the Customer Requirement for Quality Function Deployment. International Journal of Business Analytics (IJBAN), 4(1), pp.56-86.
Ritala, P., Golnam, A. and Wegmann, A., 2014. Coopetition-based business models: The case of Amazon. com. Industrial Marketing Management, 43(2), pp.236-249.
Siedlecki, R., 2014. Forecasting company financial distress using the gradient measurement of development and S-curve.Procedia Economics and Finance, 12, pp.597-606.
Spender, J.C., 2014. Business strategy: Managing uncertainty, opportunity, and enterprise. OUP Oxford.
Yoon, B. and Park, Y., 2007. Development of new technology forecasting algorithm: Hybrid approach for morphology analysis and conjoint analysis of patent information. IEEE Transactions on Engineering Management, 54(3), pp.588-599.
Zhang, W., Liu, S., Li, N., Xie, H. and Li, X., 2015. Development forecast and technology roadmap analysis of renewable energy in buildings in China. Renewable and Sustainable Energy Reviews, 49, pp.395-402.
